Thread: No New Jobs Is The New Normal

No New Jobs Is The New Normal

02/10/2011
Comments 9
3 charts that will not transfer and many links on this post

Our statistical recovery is truly a wonder to behold. Gross Domestic Product (GDP) has now reached its pre-recession (2007:Q4) level, but has done so without restoring about 7.5 million of the jobs lost since then. Job gains are supposed to come later we are told. This is the famous "lagging indicator" you've heard about. This hopeful expectation, along with $1.49 (+ tax), will get you a cup of coffee at Starbucks.

In Why the January Jobs Report Is Alarming, David Stockman looks at our job creation prospects based on the historical data. His view basically says that there may not be many new jobs created in the next decade—this is the "new normal" for jobs.

The January nonfarm payroll number was 130.27 million — a figure first reached in October 1999. That’s right! The fabled American job machine has come to resemble nothing so much as Cisco's stock price. For the last 12 years, the nonfarm job count has been revisiting the same point over and over again, and each time it crosses from below Wall Street economists put on their best [Cisco CEO] John T. Chambers imitation and whoop it up for job growth...

... no amount of weather-spinning can obfuscate the dismal facts about the medium-term jobs trend — to say nothing of any net job gains since the last century! Specifically, during the December 2007-June 2009 official recession period, we lost 7.3 million nonfarm payroll jobs, bringing the nonfarm payroll count to 130.64 million at the point the National Bureau of Economic Research (NBER) said recovery officially commenced. But after 19 months of green shoots, we now actually have 400,000 fewer jobs.

And, yes, employment is purportedly a lagging indicator, but it is simply off the historical charts to have the job count down 5.5% at a point that is currently 37 months after the cyclical peak.

Regardless of what the precise numbers are, no amount of spin can hide the fact that 19 months after the NBER said the recession was over, job creation has stopped, as in halted, ceased, not moving forward, standing still. Stockman's reading of the BLS data is consistent with the Gallup polling results.

Still, Gallup's measures paint a real-time picture of the current job realities on the ground: nearly 1 in 10 Americans in the U.S. workforce are unemployed, nearly one out of five are underemployed, and the nation's overall hiring situation has not improved over the past four to six months.

Stockman includes three historical graphs describing the current jobs situation. I am going to duplicate those graphs along with his comments in the hope that this depressing data will garner wider attention.

"... the Breadwinner Jobs graph tells the real story. It goes back to January 2000 and covers the long “Greenspan Boomâ€

02/05/2011

Propaganda Techniques — The Official Story

In two consecutive months, the Bureau of Labor Statistics had lowered the "official" (U-3) unemployment rate from 9.8% in November to 9.0% in January. These hardworking economists/statisticians also revised upward the number of jobs created in November and December. All of this deserves close scrutiny. I'll do that next week.

Today I want to focus on the propaganda these revisions have engendered. First, watch this short (0:39) video.

Video: Unemployment Falls to 9.0%, Only 36K New Jobs
http://www.youtube.com/watch?v=bTLQ1cuD ... r_embedded

I have transcribed the text. Italics provide emphasis following the speaker's inflection.

The most widely followed gauge of the job market, the nation's unemployment rate, dropped to 9 percent from 9.4 percent. That's the word from the Labor Department. It's a big surprise since economists had been expecting the jobless rate to rise slightly. That's in keeping with other recent reports showing consumers spending more, and manufacturers hiking their output.

At the same time, the government survey of businesses found lower than expected job creation. That's seen reflecting harsh winter weather last month. Even so, the report says manufacturing added 49 thousand jobs last month, and that's the most for that sector in over a decade.

Mark Hamrick, the Associated Press, Washington.

Let's go through it, line by line, highlighting the propaganda techniques employed.

Lines 1,2 — "the most widely followed gauge" gives us the good news. This is the word from the Labor Department. In other words, this is the story everybody follows, and it is the official story. There is no other story, or if there are other stories, they are suspect.

Line 3 — "it's a big surprise ... economists had been expecting the jobless rate to rise slightly." This is a set-up line. Big surprise? Maybe those economists were right to expect a rise. Is the official story suspect?

Lines 4,5 — "that's in keeping with... consumers spending more, and manufacturers hiking their output." Not to worry, it's still a good surprise—these economists are such pessimists. If they had looked at the "consumer" spending data and the manufacturing data, they could have easily seen this coming. We can see that it makes total sense that the official jobless rate is now 9.0%.

Line 6 — "... lower than expected job creation" Oh-oh! What's this? Some bad news? Like line 3, this is a set-up line.

Line 7 — "that's seen reflecting harsh winter weather." What a relief! It was the harsh snow and cold that prevented new job creation. Thus there is no reason to question the dramatic lowering of the jobless rate. And notice this: "that's seen..." Seen by whom? The seers are left unspecified, and need not be specified. As we established earlier, this is the official story. There are no other credible stories.

Lines 7,8,9 — "even so, ... added 49 thousand manufacturing jobs ... most in that sector in over a decade." This is a back-up line, in case you didn't believe the snow job in line 7. But it is also designed to reinforce the official story. Even if all other sectors added together must have lost 13 thousand jobs, since only 36 thousand jobs were created in total, the boost in the manufacturing sector, which has been in radical decline for over 30 years now, should reassure you that all is well. Note that the AP reporter does not mention the 36,000 number in the text, preferring to include the higher 49,000 number, which is "the most in that sector" in over a decade. And this miracle occurred despite the impenetrable snow and cold.

Let me add that this AP reporter Mark Hamrick is very, very good at what he does. He didn't set out to write a propaganda blurb per se. He is bona fide member of the mainstream media, and has internalized the official story, whatever it happens to be. I'm sure he believes what he's saying. It's his job to get you to believe it too.

If you're so inclined, watch the video again, this time with fresh eyes.

http://www.declineoftheempire.com/2011/ ... story.html