Posted on 01/09/2005 11:10:02 AM PST by 1rudeboy
Today the Department of Labor released its December jobs report highlighting the creation of 157,000 jobs in the payroll survey and a 5.4 percent unemployment rate. Overall, 2004 was the strongest year for job creation since 1999, with over 2.2 million new jobs created.[1] It is hard to recall that as recently as the fall of 2003, many feared that the country was mired in a "jobless recovery." How different things look today now that the economy has created new jobs in each of the last sixteen months. Since President Bush enacted his 2003 tax cuts, the country's base of payroll jobs has increased by 2.5 million and the unemployment rate has dropped from 6.3 percent in June of 2003 to 5.4 percent last month. The lesson to learn is easy: Lower taxes on capital and labor spur gains in employment. The establishment survey came in strong again. Payrolls were up 157,000 jobs in December--close to Wall Street's expectation. To give that some context, December was the fifth straight month in which payroll growth exceeded 100,000. But that's not all: Today's report revises upwards the number of new jobs created in October and November by 9,000 and 25,000, respectively. Adding it all up for the year, job growth in 2004 exceeded 2.2 million new jobs. In other words, 2004 was the strongest year for job growth since 1999, when 3 million jobs were created at the very apex of the dot-com boom. The unemployment rate in December remained at 5.4 percent, essentially unchanged since June. But that's still down from 5.9 percent in December 2003, a decline of 9 percent. The average unemployment rate for 2004 was approximately 5.5 percent, down from about 6 percent in 2003. Today's 5.4 percent unemployment rate is very low historically speaking. Indeed, it is lower than the average unemployment rate in the 1970s, 1980s, and 1990s. What this means is that a larger proportion of Americans who wanted to find work were able to in 2004 than in any recent decade. Doomsday Predictions Proven Wrong In 2003, many believed that the United States was stuck in a jobless recovery and that the jobs that disappeared in the 2001 recession would never return, unlike after previous recessions. These pessimists offered a number of negative theories to explain slow growth in jobs. They said that too many companies were outsourcing jobs, that the President's tax cuts somehow cost jobs, and that things were only going to get worse. Many economists, however, disagreed and explained that job growth consistently lags economic recovery following a slowdown. In hindsight, the economists were right. In fact, after President Bush's tax cuts sparked the economy, job growth sped up, riding the wave of business expansion. Since the 2003 tax cut went into effect, 2.5 million new jobs have been created. There's no sign that this expansion will stop any time soon. The year of 2005 already looks to be a strong one for economic growth, and job growth is sure to follow along. Though it has been severely underreported, the past year has been much better for Americans suffering bouts of unemployment. While it is never good to be involuntarily unemployed, in 2004 it was easier than before to get back to work. The median duration of unemployment dropped by a week in 2004, from 10.4 weeks in December 2003 to 9.5 weeks in December 2004. And the number of the long-term unemployed--those seeking work who have been unemployed for over fifteen weeks--declined by over 250,000 workers. The long-term unemployed also declined as a proportion of the unemployed from 40.2 percent to 36.6 percent. These shifts mean that the unemployed are able to find jobs more quickly in 2004 than they were in 2003. The past year was a solid one for the U.S. economy and the U.S. worker and the best year for job growth since 1999. Today's job growth numbers--both for December and for the whole year--are a reflection of the great success of the President's tax cuts. By reducing taxes on capital and labor, the President's cuts encouraged business investment and expansion. This, in turn, sparked job growth and helped many Americans return to work. The gains from the President's tax cuts are still coming in. As the President and Congress consider proposals to overhaul the current tax code, they should favor tax reforms that encourage economic growth. Reducing taxes on labor and capital and lessening tax-code distortions will cause the U.S. economy to grow faster and produce more new jobs, as the President's rounds of cuts have so aptly demonstrated. In 2005, Congress should make permanent the President's 2001 and 2003 tax cuts. Permanence would be a strong first step in tax reform and would help ensure robust economic growth for the duration of the President's second term and beyond. Alison Fraser is Director of the Thomas A. Roe Institute for Economic Policy Studies, and Rea S. Hederman, Jr., is Senior Policy Analyst in the Center for Data Analysis, at The Heritage Foundation.
[1] Next month the BLS will release its revisions of the payroll survey. Most analysts believe that the number of new jobs created in the payroll survey will be significantly revised upward. In all likelihood, the number of jobs created in 2004 will be increase when the revisions are announced.December Highlights
Getting Back to Work
Conclusion
Manufacturing activity expands for the 19th consecutive month.
Growth in service sector continues to rise.
In the latest employment numbers, the Bureau of Labor Statistics (BLS) also released wage data. For 2004, the average hourly wage increased from $15.48 to $15.89, or 2.64%. During the same time, the following commodities increased at a higher rate:
Motor Fuel increased 31%
Gasoline increased 30%
transportation increased 7.4%,
medical care increased 4.4%,
Education increased 6.8%,
water, sewer and trash collection increased 5.7%,
housing increased 3.1%
Although things aren't bad, they could be better.
So gas, medical care, education, rent, and government services are more expensive. Got it.
The first 3 are inter-related and with the growing world economy being the cause beyond the scope of administration policies for the most part. Heath care and Education cost = see the Dims cause they're responsible. Now ,we can talk about sewer water and housing
I would say 1, 2, 3, and 7 are related, if you broaden the category to "energy (cost)."
We're all DOOMED! Film at 11 Click Image to Watch Film!"water, sewer and trash collection increased 5.7%"
The tax and spend lefties who control most city councils will increase water, sewer and garbage rates to raise money to spend on their voters until they told to stop it.
When some of the increase the fees council members are voted out, often there will be a change in their fee increase behavior.
I was looking at these the other day http://www.classiclittlehomes.com/Classiclittlehomes.htm
but might be jumping ahead to quick, just got made a grampa dave myself for about the 5th time but I fill like its the 1st time again!!!!! 4:22am new years morning
Yes, the economy started behaving like a classic recovery months ago. Yes, jobs are being created by the millions. Some say wages are dropping in the bottom four quintiles vis-s-vis the aggregate distribution of total income. Well, that's life. It will turn around. That's the market.
To me the argument is: "cheap" and ILLEGAL labor is preferred, screw our heritage as a Nation of Laws. (Then of course there are the jobs and our technology going offshore to "emerging nations." Screw our heritage as a Nation.)
I have posted (in replies) info on two studies showing large gains in employment made by recent immigrants while established immigrants and citizens remained unemployed. One was a Pew Hispanic Center study and one was a labor studies report from Northeastern University.
The former covered one year (2003 to 2004) and the latter covered four years (2000 - 2004). Pew showed that in one year almost 30 percent of the jobs created went to recent immigrants. The four-year Northeastern study showed that about 1.3 million established immigrants and citizens remained unemployed while just over two million recent immigrants got jobs.
Given estimates that ILLEGAL immigration coming across the border with Mexicorruption numbers between one million and three millions annually Is it unreasonable to assume that many of those folks are getting payroll jobs? If you say that they are not getting payroll jobs, please explain. I sincerely would like to know how they are getting by. Not all are underground or day laborers.
Over one-half of ILLEGAL immigrants are Hispanic or Latino mostly from Mexico's policy of Mexican Diaspora, a "nation beyond borders."
BLS - Table A-3. Employment status of the Hispanic or Latino population by sex and age (Labor force status: Employed)
11,005,000 December, 1994
11,267,000 December, 1995
12,216,000 December, 1996
12,998,000 December, 1997
13,398,000 December, 1998
14,112,000 December, 1999
16,085,000 December, 2000
16,294,000 December, 2001
16,713,000 December, 2002
17,785,000 December, 2003
18,236,000 December, 2004
BTW, the jump of almost five million between 1998 and 2004 matches the explosion in the amount of earnings in SSA's Earnings Suspense File (ESF) of bogus and stolen SSN's. The ESF contains interesting tidbits of info such as the ID of the EMPLOYERS!
This is for those who wave flags for Americans and established immigransts going off to war but wave jobs applications from ILLEGAL aliens at those same Americans and established immigransts coming home from war tellling them to go elsewhere for a jobs, I invite comments.
Even math majors? WGIDS.
imagine kerry was elected how high would our expenses be then thank god for bush
1-20 america wins again
That's a whole lot of math majors finding jobs a whole lot quicker at Wal-Mart. [chuckle]
I'm always long in the market or I'm in cash so this guy is not who I'd invest with...not to mention that I'm not worth a million either; but this guy discusses foreign exchange and trade quite a bit.
No, I haven't . . . but I'll check him out. My favorite is Bill Fleckenstein, but I lost track of him. He might still write a column for TheStreet.com. Total contrarian (always good to have one in the stable), and he returns e-mails.
Actually, my comment was directed at the problem with the types of jobs being created. We can do better.
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