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Don't believe the hype on US jobless numbers

We were softened up with 'double-dip' recession stories so that the latest jobs report would seem less dire than it really is.



The September jobs report showed that the US economy created just 103,000 jobs in the month,
45,000 of which were the jobs of Verizon workers who were returning
from a strike in August. The economy has created 99,000 jobs a month
over the last three months, about 9,000 more than it needs to keep pace
with the growth of labor force. At this pace, it will be around 80 years
until the economy gets back to normal levels of unemployment.Nonetheless, the news accounts told the public that the jobs numbers were better than expected. After all, at least the number of jobs is growing; the economy has not sunk back into recession.

Of
course, slow growth is better than a recession. But this is like saying
that we are better off with one major hurricane hitting the east coast
rather than two. This is true, but why would we expect that two major
hurricanes would hit the east coast in the same year?This is the
same logic with the double-dip recession story. In the last several
months, many economic analysts have been running around with scary
stories about a double-dip recession. While the stories were scary, they
never made much sense. Every recession that the United States
has had since the Great Depression has been triggered by a plunge in
housing and car sales. It is very difficult to imagine sharp falls in
either of these sectors at this point – primarily because current sales
levels are already very low. At worst, we could see a modest downturn in
one or both sectors, which would have a limited impact on the economy.By
contrast, other sectors of the economy are growing, albeit very
modestly. Consumption, which is 70% of GDP looks to be on a 2-3% growth
path over the second half of 2011. Investment in equipment and software
is likely to grow at close to a 10% annual rate. Government is
shrinking, but only at a 1-2% annual rate; this slows growth, but since
this sector is only 20% of GDP, the shrinkage in government is not
nearly large enough to turn GDP negative. With one exception,
there really is not a plausible story whereby the US economy goes into a
second recession. The exception, of course, is the meltdown of the
eurozone from a disorderly default of one or more of the heavily
indebted countries. But this outcome will be determined by the greed and
ineptitude of the IMF, the European Central Bank and the European
commission, the troika managing negotiations with the debt-troubled
governments. The current strength of the US economy has little direct
bearing on the willingness and ability of the troika to bring about an
orderly resolution of the crisis.The spread of the double-dip
nonsense matters because it provides a backdrop against which
politicians and the media can tell us that we somehow should be happy
about really bad economic news. By lowering expectations enough, even
the pathetic September jobs numbers can be made to look good.This
is not the first time the media have played this game. At the start of
the downturn, we had any number of political figures and "experts"
telling us that we were at risk of a second Great Depression. This line
was so constantly repeated that most of the public probably thinks it is
true. In fact, Ben Bernanke, who is, after Alan Greenspan, the person
most responsible for the economy's collapse, was actually named Time Magazine's Person of the Year in 2009, precisely because he prevented a second Great Depression. Of course, he also prevented a return of the Black Death.In
reality, we never had any reason to fear a second Great Depression. The
first Great Depression was caused not just by mistakes in responding to
the financial crises at its onset, but also by the failure to provide a
sufficient boost to demand to get the economy back on its feet again.
The massive stimulus provided by the second world war that finally
restored the economy to full employment could have just as easily
occurred in 1931 as 1941, if there had been the political will.There
is nothing magical about war spending that generates jobs. Spending of
the same scale on public works, public education and public health would
have had the same effect. We know this now, which is why there was
never any reason to think that a bad turn of events in the 2008
financial crisis would have condemned us to a decade of double-digit
unemployment.Political figures routinely use the media to create
absurdly bad counterfactuals so that their actual performance will look
good by comparison. Economics reporters should know how to evaluate
arguments so that they don't pass along these nonsense counterfactuals
to the public. They should also not make a point of relying almost
exclusively on economic experts who end up being wrong on almost
everything.Unfortunately, we are far from that point today. As a
result, people will have to do their own homework to recognise that the
September jobs numbers really were awful – and that they should be very
angry at politicians who refuse to do anything to boost the economy.


Added: Oct-10-2011 Occurred On: Oct-10-2011
By: allyssa
In:
World News
Tags: US, Jobless, Depression
Views: 2297 | Comments: 26 | Votes: 0 | Favorites: 0 | Shared: 0 | Updates: 0 | Times used in channels: 2
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  • Don't care what anyone has to say about it, I am jobless and continue to look for jobs harder than most I bet... Most employers simply say they have no need for employees, and many privately owned or mom and pop shops only have 1 or 2 employees if any besides the owner/s...
    I know full-well how bad it is.

    Posted Oct-10-2011 By 

    (7) | Report

    • Comment of user 'StopTheCancer' has been deleted by author (after account deletion)!
    • @biots I bet there are jobs out there just that they are ones that you dont want.

      Posted Oct-10-2011 By 

      (-2) | Report

    • @biots same

      Posted Oct-10-2011 By 

      (-1) | Report

    • @StopTheCancer

      According to the neocons all of our problems can be solved by fighting Israel's wars in the Middle East.

      Posted Oct-10-2011 By 

      (0) | Report

    • @biots As long as it pays the bills do whatever works for you. The architecture field is definitely hard to find work in especially now where buildings and homes have become the prime victim of this economy. I've even seen stories of engineers do welding, completely changing careers but the job is stable. Pride is no longer an option soon if this keeps up. Luckily Im in an area where the economy is not affected as bad as other places but still it doesnt seem to look good. I dont even think More..

      Posted Oct-10-2011 By 

      (0) | Report

  • Unemployment is bad here in Florida.
    Companies just won't hire educated experienced workers.
    They lay them off and hire retards for less then lose customers and go under, then everyone is unemployed.
    Some business roads are full of empty buildings.
    Scary in some areas.

    Posted Oct-10-2011 By 

    (5) | Report

  • Hope&Change(TM) fail.

    Posted Oct-10-2011 By 

    (2) | Report

  • Yeah, cut regulations and phase back government spending.

    Posted Oct-10-2011 By 

    (1) | Report

  • We were sold the B/S about free trade in the 90s. Alot of people bought into it. Alot of people didnt. Yet today we see the results and who was right and who was wrong(or corrupt, maybe stupid?). Clinton and Gore promised a booming service economy. Then major industries shipped all their jobs over seas to use slave labor forces. Nearly all manufacturing, heavy industry and then later on those "service" jobs as well. Im sure everyone knows about indian customer service.


    At the same t More..

    Posted Oct-10-2011 By 

    (1) | Report

  • Ignorance is bliss, I guess.

    Posted Oct-10-2011 By 

    (0) | Report

  • Comment of user 'StopTheCancer' has been deleted by author (after account deletion)!
  • when the dems sold the unemployment recession "sizzle" during the bushco years is looking like those were the good ole days
    but
    they can"t admit the %

    Posted Oct-10-2011 By 

    (0) | Report

  • The U.S. Bureau of Labor calculates several levels of unemployment. The best measure is called U-6, and is defined as "Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."

    The U-6 is 16.2% for September. And this does not account for all discouraged non-workers that have given up. The total now approaches 20%. Add More..

    Posted Oct-10-2011 By 

    (0) | Report

  • your are not taking into account all the people to be killed by the cemtrails and inoculations

    Posted Oct-10-2011 By 

    (0) | Report

  • You forgot to mention that the market went up today. That is even more BS.

    Posted Oct-10-2011 By 

    (-1) | Report

  • In the land of opportunity and the greatest most powerful country on the earth and you cant find a job, I call you lazy.

    Posted Oct-10-2011 By 

    (-2) | Report

    • @theycallmenica13

      Yeah, its the land of opportunity for illegals and minorities who take advantage of affirmative action along with other racially biased handouts.

      Posted Oct-10-2011 By 

      (4) | Report

    • Comment of user 'hgratacos_1' has been deleted by author (after account deletion)!