James Pethokoukis

Does the jobs report mean a V-shaped recovery?

June 5, 2009

I will give the last word (for today) on the jobs number to Wesbury & Stein:

The jobs report strongly supports our call that the economy bottomed in May and is now in the early stages of a V-shaped recovery. Businesses are shedding jobs at a much slower pace than earlier this year and we would not be surprised to see payrolls start to increase by the end of the summer. The speed of the turnaround cannot be ignored. …  After the collapse of Lehman Brothers last September, monetary velocity plummeted, with both businesses and consumers pulling back from any activity they deemed unnecessary. Now, restaurants and bars are adding payrolls again, a sign that consumer behavior is returning to normal. While some analysts may focus on the rise in the unemployment rate to 9.4%, much of the increase was due to an increase in the labor force, which has risen by more than 1 million workers in the past two months. Without this increase the jobless rate would be a much lower 8.7%.

An improving job market

June 5, 2009

I wanted to elaborate a bit on the job market, with my first embedded graph of the blog! It shows the diminishing rate of job losses, though the unemployment rate will continue to rise, especially as more people try and return to the workforce.

The Democrats’ 2010 unemployment trap

June 4, 2009

In the WSJ today, Karl Rove notices that the unemployment rate may still be really, really high on Election Day 2010: “The difficulty for Mr. Obama will be when the public sees where his decisions lead — higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.”

Do we need a second Obama stimulus pacakge?

May 29, 2009

Back in January when Team Obama was pushing its stimulus plan, the White House put out a self-analysis of the potential economic impact of the plan, authored by Jared Bernstein and Christina Romer.  If Congress passed the president’s plan, the report said, the U.S. unemployment rate would rise to just under 8 percent by later this year and fall to 7 percent by Q4 2010. If the plan was not passed, the reported predicted, the U.S. unemployment rate would climb to 9 percent next year.

Unemployment and the 9-handle

May 21, 2009

The government’s nastier stress test scenario looked for U.S. unemployment to rise to 10.3 percent. Today’s weekly jobless claims report (631,000) is another indication that we are well on our way to that level. As the econ team at JPMorgan sees things: