James Pethokoukis

Where are the jobs? The bear case on the November jobs report

December 4, 2009

From David Rosenberg of Gluskin Sheff, of course:

While it is abundantly clear that companies are near the end of the job downsizing phase, there is scant evidence of any renewal in the pace of new hiring. In fact, it is quite the contrary. This assertion is underscored by the fact that both the median (20.1 weeks) and the average (28.5 weeks) duration of unemployment hit new record highs last month. The share of the unemployed that has been looking for work without success for six months or longer also reached an unprecedented 59% last month. We are fairly certain that these folks will have a slightly different take on today’s employment number than the mainstream economics community. In addition, also keep in mind that the employment diffusion index, while improving in November, was still unacceptably low at 40.6. In other words, roughly 6 out of 10 businesses are still rationalizing their staff loads, even if at a less dramatic rate than in previous months.

The November jobs report and the 2010 midterms

December 4, 2009

A few thoughts, sports fans:

1)  The drop in the U3 rate is welcome news for the WH, congressional Dems (and US workers, of course). But it is really just a smoothing out of last month’s weird pop from 9.8 percent to 10.2 percent. As Action Economics notes:

Goldman Sachs 2011 forecast would be an absolute disaster for Dems

December 3, 2009

This would be New Normal with extreme prejudice. Bad for Democratic incumbents in the 2010 congressional midterms, but it should make the White House political team nervous as well for 2012. If Goldman Sachs is right, of course. Here is the firm’s 2011 forecast:

Obama’s reverse stimulus on its way

November 27, 2009

Jed Graham of IBD highlights the coming fiscal drag in a pretty picture:

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Me: What would that mean for GDP growth? A pre-financial crisis analysis by Goldman Sachs predicts, for instance, found that getting rid of all the Bush tax cuts at the end of 2010 would cause a 3 percentage point drop in the economy in 1Q 2011.  In any event, anti-growth fiscal policy is one more reason to believe in the dreary New Normal

Does Washington really get the jobs crisis?

November 27, 2009

David Rosenberg of Gluskin Sheff doesn’t think so:

These attempts to stimulate consumption at a time when household spending relative to GDP is already at an all-time high are not going to carry much of a multiplier impact. There is a youth unemployment crisis, a skills crisis, a crisis among the ability of small businesses, who have been responsible for 65% of the new hiring in the U.S.A. over the past 15 years — to secure financing for working capital purposes, there is a crisis in terms of a declining manufacturing capital stock, and the programs we get are these old and tired Keynesian attempts at temporary boosts to consumer demand. It truly boggles the mind, and as we show below, American taxpayers are still a long, long way from paying for all these transitory fiscal policies out of Washington.

Why panicky Dems are bailing on Tim Geithner

November 23, 2009

One residual from Timothy Geithner’s rough confirmation back in January — “Turbo Tax Tim” and all that — is that his political position is probably a bit more precarious than that of the typical newbie treasury secretary.

Goldman Sachs forecasts nightmare 2010 economic scenario for Dems

November 21, 2009

Trust me, these are not the kind of numbers that the White House and congressional Democrats want to see. Goldman Sachs is now forecasting unemployment to rise all next year, peaking at 10.5 percent. The firm expects the economy to grow at just 2.1 percent. Also, the budget deficit will be a few billion bigger at $1.6 trillion. If correct, these stats absolutely confirm the collective freakout happening right now among Ds on Capitol Hill, such as calling for Geithner to resign. Economist Jan Hatzius:

Here comes Sarah Palin and the anti-Wall Street GOP

November 20, 2009

Don’t interpret passage of the watered-down Kanjorski amendment as the peak of the “break up the banks” movement. It may be about to get some new allies on the right, folks tired of Big Government, Big Money and crony capitalism.

How the economy is killing the Obama agenda

November 20, 2009

The less popular Obama gets, the less political capital he has to push forward his agenda. I think this chart from Nate Silver nicely encapsulates things:

Healthcare reform update: It’s all about 60 votes

November 18, 2009

My sources tell me that reconciliation — pushing through HC in the Senate with 51 votes with a special parliamentary procedure — isn’t going to happen. So the big votes will need 60, including just opening debate. And rest assured that if Reid thinks he has 60 to pass, the debate will immediately come to an end.