James Pethokoukis

Politics and policy from inside Washington

12 reasons the job market is worse than you think

December 9, 2009

The November jobs report may not be the only piece of good statistical news on the way. Wait until all those census workers start making their way into the data. But a drill down reveals deep, deep problems in the US labor market where unemployment averaged just 5.5 percent from 1989 through 2008:

1. Add in long-term discouraged workers and the unemployment rate is 22 percent. (via Shadow Government Statistics)

2. The ISM non-manufacturing employment index in November pointed to a 192,000 drop in service sector jobs vs. the increase of 58,000 the Labor Department reported. (via David Rosenberg of Gluskin Sheff)

3. On a rolling 12 month basis, individual taxes withheld have dropped by nearly percent, from $1.42 trillion to $1.31 trillion. (via  Zero hedge)

4. If not for discouraged workers leaving the workforce, the unemployment rate would have only ticked down to 10.1 percent. And that is after a surge to 10.2 percent in October from 9.8 percent in September. Sounds like a bit of reversion to the mean.

5. Single month dips are common. The unemployment rate bottomed at 3.8 percent in April 2000 and peaked at 6.3% in June 2003. During that time, the jobless rate fell five times. In the early 1990s unemployment cycle, the unemployment rate actually fell no fewer than six times. Just last July, the rate dipped by a tenth of a percent. (via David Rosenberg of Gluskin Sheff.)

6. The JOLTS survey showed that job openings fell back by 80,000 in October and new hires plunged 95,000. (via David Rosenberg of Gluskin Sheff.)

7. Both the median and average duration of unemployment hit record highs.

8. The annual survey from the ISM found that just 32% of manufacturers intend to boost their staff requirements in 2010 and a mere 15% of non-manufacturers intend to do so (vai David Rosenberg of Gluskin Sheff)

9. The Business Roundtable survey showed just 19 percent of companies intend to boost employment.

10. Payroll processor ADP, America’s largest processor of payroll information, publishes an independent survey of employment based on its own data reported a loss of 169,000 jobs. Asblogger and bond guru David Goldman notes, the correlation between the ADP and BLS is 95 percent, so the discrepency “lies at the extreme range of error for the two series.”

11. According to the Conference Board’s monthly survey of consumer confidence. those “claiming jobs are ‘hard to get’ increased to 49.8% from 49.4%, while those claiming jobs are ‘plentiful’ decreased to 3.2% from 3.5%.”

12. It is tough to top Goldman’s analysis:

The level of un- and underemployment is so huge by historical standards as to make the usual sort of measurement questionable. With nearly 20% of the population unable to find proper work, there is a different sort of workforce. The vast majority of job creation in the US during the past two generations came from small businesses, which display only vaguely on the radar of government agencies as well as the bigger private surveys. The financial crisis killed small entrepreneurs as surely as Joseph Stalin killed the kulaks, and the roots of the economy are dead and dry.

Comments

If this is true, then Obamacare, Cap n’ Trade, and Card Check will bury those dead entrepreneurs forever.
Our only possible future is just as Socialist as the USSR under Joe Stalin.

“The financial crisis killed small entrepreneurs as surely as Joseph Stalin killed the kulaks, and the roots of the economy are dead and dry.”

Posted by Andrew P | Report as abusive
 

It’s not going to get any better until we can kick Democrats out of at least one house of Congress so we can stop some of this madness.

Posted by Sheri | Report as abusive
 

It’s all going according to Obama’s plan to completely kill the American economy. Allow the Bush tax cuts to end, hijack the health care sector, pass Stim II and cap-n-trade and a few other pork-bills, a few more multi-TRILLION dollar budgets, and presto! we are a banana republic. Don’t expect Obama to step down in 2012.

Posted by Jerry45 | Report as abusive
 

How’s all that hopey changey thing workin out for ya?

Posted by saleboter | Report as abusive
 

Oh yeah, like Bush and the Republicans created SUCH a great economy. Tax cuts and watch the magic (er, bubbles and foreclosures). Can’t wait to go back to that!

Posted by Murray | Report as abusive
 

Everybody stand back and take a deep breath, PLEASE! According to this thread and Goldman Sachs’ analysis, the American economy, created in 1776 and which has survived the War of 1812 and Andrew Jackson and the Civil War and the robber barons and John D. Rockefeller’ trusts and J.P. Morgan and the panic of 1907 and the First World War and the Great Depression and the Second World War and the Cold War has, for some reason, died in the past two years because credit was tightened. HUH? Goldman Sachs’ analysis, in my humble opinion, is just a little over-the-top. Weren’t these guys a vampire squid sucking the life out of everything? According to posters on this site? And now they are the undisputed experts on the American economy, whose every word must be listened to? What rubbish. What’s wrong with America these days? Give your heads a shake and move on from this gloom-dooming. The rest of the free world is waiting for you!

Posted by gotthardbahn | Report as abusive
 

Mea culpa. It’s not Goldman Sachs who provided that absurdly bearish analysis of the American economy, but ‘bond guru’ David Goldman. My error, but my point still stands. Besides, it isn’t generally recognized that bond traders want EVERYBODY out of a job, as bad economic news and hard economic times are great for bond prices; the worse the economy, the bigger the rally in bond prices. This guy is just talking his position, like any salesman. Treat it accordingly.

Posted by gotthardbahn | Report as abusive
 

The bullet points of your analysis sketch a too negative an economic narrative for the Obama WH to swallow or spin. This would explain the rush to claim and wax this “reversion to the mean” as a successful tale of stimulus victory.

Posted by Vincent | Report as abusive
 

This is ridiculous…Rosenberg said the S&P 500 would be at 600 by October 2008,,,,Goldman has been very wrong,,,
Shadow Stats has some serious flaws to its methodology…
I can point to three things thta say better job growth,,,
temporary jobs,growth in cyclical service sectoe employment and the 12 month moving average of the ratio of non farms to jobless claims has turned up….methinks

Mr, Pethokoukis has an agenda over analysis….

Posted by bill | Report as abusive
 

Andrew P. and I don’t like Obama one bit either, but you are both morons. You know damned well card check isn’t going to pass and Obamacare is a dead giveaway to insurance companies.

Why don’t you anti-intellectual, pseudo-conservative frauds try and think critically instead of just yelling “socialism” at the drop of a hat?

Posted by J. | Report as abusive
 

You know it’s funny J you rip on Cons yet every time anyone points out what a failure your messiah is, you people knee-jerk exactly the same way, hypocritical much?

So come on with one of the usual oh so intelligent “it’s all Bush’s fault” rants that the left usually provides us.

Posted by Billy | Report as abusive
 

“Oh yeah, like Bush and the Republicans created SUCH a great economy… Can’t wait to go back to that!”

Oh, I don’t know, I’d trade 2004 for what’s in store for us in 2010. The Dems have the budget deficit up to $200 billion a MONTH. Obama’s Treasury dept. is printing as much as $15 billion a DAY. We won’t be able to do that forever. Get ready for the $40,000 cup of coffee.

Posted by John S | Report as abusive
 

Liberal fascists hate, hate, hate small businesses, because SBs compete with their corporatist benefactors, and they are harder for totalitarian government to control. The Stalinist reference is very apt, because that is exactly what Obama is doing.

 

When a country is fast losing its foundational moral values the way the US has been in the last couple years it is easy to blame Obama, Bush and whoever else is in the Whitehouse at any one time. The truth of the matter is that the US is for the first time facing an unprecedented challenge in its global economic supremacy and has not yet come up with a strategy to navigate. The ominous future facing the dollar as a global reserve currency is only one example of what is happening. US citizens have today become conspicuous consumers too much attached to materialism and an impatient culture that does not respect hard work and patience, like our grandpas did. Might be another “1939 lesson” all over again, its truly astounding. Lets look deeper into our own “selves” before blaming the leadership. After all, a country’s leadership is basically a reflection of its society or ain’t it?

Posted by James Kimani | Report as abusive
 

Lost Soul,HELP I have been on my job for 5yrs.On 1/08/10 I went to work as always with my smileing face,Ready to jump in and work my depts.The company is know as Freds in the big town of Quincy Fl.The sweat blood an tears i put into my job was meant for nothing.the big shots that went home to there prime rib had come an went.left the word i had been let go.IT goes deep about my app.that i filled out 11/10/2005 wow!They always love me when iwas going an doing by the way iam now 54yrs old WOW.With no job ,Taken care of my 80yr old MoM. they dont even know how hard an long i have come in my life.from long long ago of recovery due they care.please can anyone HELP! My custermers my life of 5yrs my poor mother my confussed mind.my# is 850/875-1685

 

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