Opinion

Felix Salmon

Counterparties: The slow March of the recovery

April 5, 2013

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The US economy added just 88,000 jobs in March, which was the lowest monthly job growth since June of last year.

We know, of course, that the jobs report is highly subject to revision. But, as Dashiell Bennett points out, that didn’t stop the interpretation. Henry Blodget jokingly blamed the sequester, which still hasn’t fully gone into effect. Others blamed March’s numbers on the payroll tax — or on their political rivals.

March’s jobs data sparked a new round of second-guessing the Fed. Neil Irwin calls the report “terrible, horrible, no-good, very bad” and says it may lead the Fed to reconsider its flirtation with ending QE. Jon Hilsenrath agrees about the Fed, noting that “hourly earnings were up just 1.8% from a year earlier, meaning little upward momentum in household purchasing power or inflation”. The markets agreed, with the 10-year Treasury yield falling to 1.6855%, the lowest level of the year.

Not everyone saw doom in the BLS figures. Joe Weisenthal calls the data “GREAT” news, based on job growth in key sectors like construction (18,000 jobs) and professional services (54,000 jobs). The Bonddad Blog points to other positives: the broader U6 unemployment rate, which includes people who’ve stopped looking for work, fell, and Americans are working longer hours. There are “simply too many good internals in this report for me to proclaim that we are DOOMED!”, he writes. The Center on Budget and Policy Priorities notes that, after cutting 718,000 jobs since 2008, states and cities actually added jobs in March.

UBS’ Drew Matus worries about a growing shortage of American workers; nearly half a million Americans left the labor force in March, which sent the unemployment rate down slightly to 7.6%. But Binyamin Appelbaum sees a much less clear picture of our labor force: we simply don’t know how many people would return to work, even if they could find jobs.

The unemployment rate treats all of these people as invisible. The employment rate treats them all as potential workers. The truth surely lies in between: It has become a little easier, but not much, to find work if you want it.

– Ryan McCarthy

And on that vague note, on to today’s links:

Charts
The US tax system, not as progressive as you think – Dylan Matthews

Entitlements
The US paid $80 million in unemployment benefits to households making more than $1 million – Bloomberg

EU Mess
A dead-on annotated guide to interpreting an ECB press conference – Pawel Morski
Europe and America are now thoroughly decoupled – Ryan Avent

Alpha
How Wall Street is incentivized to cheat – Jim Chanos
Dear “Great Rotation” fans: Money isn’t really fleeing the bond market – Jennifer Ablan

Oxpeckers
The latest on Business Insider’s financials – Zack Seward
Jeff Bezos invests in Business Insider. The boring internal memo – Joe Weisenthal
What will Blodget do with Jeff Bezos’s millions? – Felix
Against headlines – BuzzFeed

Strange Bloomberg Headlines
“Harvard Women Freed From Urinal 50 Years After First Female MBA” – Bloomberg

Data Points
The “Bloomberg Waistline Index” exists, and it’s growing – Bloomberg

LIEBOR
The blame for Barclays’s misbehavior lies with regulatory failures, not poor values — John Cassidy

Regulations
Trying to silence the subway – Narrative.ly

Wonks
We’re suffering from a “global risk tolerance shortage” – Brad DeLong

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