Posted on 03/04/2011 9:52:04 AM PST by FromLori
Pretty much precisely what noted earlier today: "A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour."
PAYROLL REVIEW – NICE JOB, SHAME ABOUT THE PAYCHEQUE, from Gluskin Sheff
The widespread reaction to the jobs report today is uniformly positive. I think a dose of reality is really needed here. It may as well come from this pen. The headline print of +192k was in line with published estimates but following the slate of ISMs and the ADP report, the “whispered” number was closer to +250k. Of course, there were the upward revisions to the back-data that showed net gains of +58k so one could easily respond that adjusted for these, the topline did indeed meet these “whispered” estimates. The employment diffusion index jumped to a 13-year high of 68.2% from 60.1% in January, but beware of peaks and troughs in this index (i.e. it would have been a mistake to extrapolate the 17% low in this job dispersion measure at the March 2009 market trough).
Here is what I think is important: because of the winter storms, we really have to average out the past two months. So the January-February average for payrolls is +128k. Allowing for a similar reading in March that we received in February would generate an average increase for the first quarter of around 150k. That is little changed from what employment gains averaged on a monthly basis in the fourth quarter. So while we are seeing positive job growth, it is not accelerating even though we are coming off the most intense impact of the fiscal and monetary easing that was unveiled late last year. In other words, we are disappointed with what is still a lacklustre trend in net job creation, particularly in view of the peak stimulus we are currently experiencing.
What if Q1 is the peak for job growth? If you remember, we ended up with sub-3% GDP growth in the fourth quarter, which is about half of what we should be seeing at this stage of the cycle. And if we are generating jobs at a similar rate in the current quarter, barring a re-acceleration in productivity, growth again will be below 3% at a time when the consensus is closer to 3.5%. But more to the point — what if this represents the peak for the year? Because if there is one thing we do know, it is that this quarter contains all the incremental policy easing impact on the macro data.
What was particularly discouraging was the fact that both the wage number and the workweek were flat. Nominal wages, in fact, have been stagnant in three of the past four months. Weekly average earnings have also been flat or negative in three of the past four months. How on earth can these statistics possibly be viewed as bullish for the economy? The year-over-year-trend in average weekly earnings in the past three months has softened from 2.6% to 2.5% to 2.3% today. At the same time, it is probably reasonable to assume that surging food and fuel costs will bring headline inflation to, and possibly through, 3% in coming months. In other words, the growing risk of falling personal income in real terms, even with the positive growth in payrolls, is a glaring yellow light as far as the consumer spending outlook is concerned.
Aggregate hours worked only managed to tick up 0.2% in February after a flat January. That is total labour input — bodies and hours. So assuming a trend-like productivity performance, we are talking yet again about sub-3% GDP growth, which by itself is okay but considering the peak impact of all the fiscal and monetary steroids being administered this quarter, it is actually disappointing.
Yes, the unemployment rate dipped again to a 22-month low of 8.9% from 9.0% in January and the nearby high of 9.8% in November. This reflected a 250k risein Household employment — the third increase in a row — and a flat participation rate. A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour.
All that matters in these employment reports is what the jobs environment means for income, because workers generally spend in the real economy. With credit harder to come by, and with fiscal policy soon to become more focussed on austerity, it is the income that the labour delivers that will prove to be the critical determinant of the economic outlook. So while the “spin” may be over near-200k headline payroll gains, another dip in the headline unemployment rate, the organic income backdrop can really only be described as tentative, at best, especially in real terms as gasoline prices make their way to $4 a gallon by the time Memorial Day rolls around.
Stalkers are not welcome"
Yes! Great post!!
Regarding banks................hmmmmm. Nope can't help ya there.
I wasn't rude to you, I think, was I? I understand that it can be frustrating when the opponent seems not to understand what you think is obvious. Don't you think I also have reasons to claim that some people on this thread are on crack?
What do you see on this thread except mass hysteria --- and hysteria in response to merely asking people to back up what they themselves claim. If anyone looks to be on crack it is those that scream at the top of their lungs, without a bit of information but plenty of name-calling.
Unlike most others, you have the integrity to admit that you cannot provide any evidence but believe that there is a ton of it:
I don’t have a staff to clip and file every piece of information so I can regurgitate it at your command .. The fact is that you could fill several warehouses with data backing up everything
Of course you don't have time to clip everything. Nobody is asking you or expect that you clip every piece. Just find one piece of evidence that Goldman Sacks ever asked for the TARP money. I can't. Check for evidence also that Goldman:
(i) Was begging the government to take back that money.
(ii) When finally allowed to return that money, whether it was even trying to bargain with the government or paid the government's asking price that yielded the taxpayer over 20% annualized return.
(iii) Reminded the congressional committee that it had never wanted the money, with Blankfein saying, to wit: "We raised money in the private markets just days before the bailout; we would've raised more if we needed more" (to help you: this testimony was on C-Span).
Seems like GS never wanted the money in the first place, tried to return it at the first opportunity, and was willing to get rid of it under any conditions, paying whopping 20-25% interest --- the asking price of the government --- without any bargaining.
So, please do find one piece of evidence that GS asked for the TARP money. You don't have to tell me the results of your search. You don't have to do that today or tomorrow. But please do try to find something at some point. See what happens.
Have a good day.
"Seems like GS never wanted the money in the first place, tried to return it at the first opportunity, and was willing to get rid of it under any conditions,.."
Seems like, well, where is your evidence? Where is your proof? A newspaper account? Why should I believe them?
"...please do find one piece of evidence that GS asked for the TARP money."
Please find one piece of evidence that ANYONE ASKED for TARP!!!
The claim was that everybody had to take it, so that the BAD banks wouldn't be found out.
Your asking for proof when GS balance sheet is not public knowledge is a futile attempt to obfuscate.
Some of us were convinced that there was a danger of "complete collapse of the economy" in September 2008.
Some of us were not, and those of us who were not aren't all tinfoil hatters who see a Bilderberger under every bed. John Allison, former CEO of BB&T, is a great example.
What we heard over and over again during the arguments over the original TARP was that we had a "liquidity crisis". I do not agree. What we had, and still have, is a solvency not a liquidity problem, and until the balance sheets are purged and properly valued we will continue to have that problem.
Thank you for clarifying. However, some points in this reply, I observe, are in contrast to your previous posts.
What I understand from your previous posts is that you (a)consider that the unemployment figure reported is correct or not grossly misrepresented (b) hold the opinion that the top management of the banks are blameless and has nothing to do with the failure of these banks e.g. GS, F&F, AIG (c) hold the opinion that the govenment is responsible for the failure of the banks (This is not an attempt to put words into your mouth, do correct me if I am wrong)
TopQuark wrote “It shows specifically how a collusiuon may occur. But I never argued that it cannot occur”
First through numerous posts you attempted to convince the members that there is no collusion on part of the BLS top level (in this case) or the top management in case of F&F, AIG, GS etc then you said you are open to the idea that, in the general environment, collusion can occur (may I add that this general environment includes BLS, F&F, AIG, etc)
I explained to you how collusion takes place in order to suggest that the BLS is not immune to any sort of collusion taking place (I will be glad to debate this)
Sticking to the unemployment bit, you say “ Indeed, all people, all those thousands do not have common knowledge of how aggregation was done. However, at each level where aggregation is performed, there are some people that perform that aggregation. Moreover, people providing input into a given level of aggregation do have a feel for the aggregate (there are series that historically covary, etc.)”
As far as unemploment, inflation (and even census!) figures are concerned the thousands providing input, I am sorry to say, do not have a feel for the whole. Why so? you may ask, because, they are as I said earlier, fragmented. Calculations are done on a regional basis. Those calculating unemployment for the state of California have no clue (officially) of the rate of unemployment in Alabama or the US as a whole entity. The link is broken here itself and hence no question arises of them having a feel of the aggregate.
You further wrote “In sum, (i) a collusion would still be necessary at any given level where stepwise aggregation takes place, and (ii) it is quite detectable by those that provide inputs”
Only if it was so simple. It is as good as saying that the accounts head (statistician reporting for California) at a branch of a conglomerate (California) has the idea of the profit at the group level (United States). Rates of every state are reported by the statistical head of that state to a central location and this central location is where distortions are permeated. Nobody is daft enough to do it in a way that invites attention. There are ‘politically correct’ tricks. For example, a higher level of confidence (confidence interval), statistical significance, t-values ... almost anything can be manipulated to get the results that the BLS wants the public to believe.
This cannot be reported to the Fed can it? What would the poor officer say...
Officer to Fed: The rate of unemploment is 14% not 8%. I am here to report Mr. X who has deliberately taken a higher confidence level.
Fed to Officer: Get lost!
As you say, in practice the statistical experts have to ‘put up or shut up’
My only request to you is to refrain from attempting to convince people that the figure of unemployment at 8.9% is correct. In doing so, I have also provided reasonable explanation why I do not believe it is the correct figure.
P.S: I trust you are also aware of the numerous political motivations behind distorting critical figures like unemployment rate.
TopQuark “Indeed, all people, all those thousands do not have common knowledge of how aggregation was done. However, at each level where aggregation is performed, there are some people that perform that aggregation. Moreover, people providing input into a given level of aggregation do have a feel for the aggregate”
I am sorry to say, they do not have a feel for the aggregate figure as far as enemployment rate is concerned. Statistical analysts in California are (officially) not aware of the figure of unemployment in Alabama. They can therefore not know the figure for the country as a whole.
You further wrote “In sum, (i) a collusion would still be necessary at any given level where stepwise aggregation takes place, and (ii) it is quite detectable by those that provide inputs”
This can be true of pure sciences and not for statistical inferences which require human estimation e.g. confidence interval, t-values, statistical significance. I trust you are acquainted what purpose they serve in statistical calculations. Manipulating these figures to supress the level of unemployment is easy and cannot be reported even by those honest statisticians you refer to. They merely put up and shut up.
I made an attempt to convince you how collusion takes place in order to display that the figure of unemployment is distorted.
It is naïve to believe that the BLS figure is untainted and exact and there is no collusion within the top level of BLS to manipulate the figure especially for a crucial figure like level of unemployment
Ouch! I have no intention to bombard you with two posts no 166 and 167. They essentially say the same thing. Since 166 did not appear in the comments part for a long time, I replied with 167. And now there are two. Sorry.
So, please do find one piece of evidence that GS asked for the TARP money.
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GS is getting bailed out RIGHT NOW by the FED and their ultra-low rates ,, they got bailed out bigtime when they pressured the gov’t to bail out AIG at 100% ... they are in effect being bailed out continually by the SEC allowing them to illegally frontrun everyone that uses their infrastructure to place trades. Stop being so smug... Lord Blankfein should be in jail right now ,, America would be better off for it.
Unlike most others, you have the integrity to admit that you cannot provide any evidence but believe that there is a ton of it:
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I said no such thing ,, you simply are not worthy of the effort, providing the “evidence” you request is akin to asking me to supply evidence that water is wet.
Wonderful. After so many posts, not a shred of facts or reasoning. You don't speak because of me? So much effort you've already expended on the unworthy me --- wouldn't it be simpler to say something of substance?
Thank you for removing any remaining doubt about your impotence, both intellectual and moral.
Please, please no apologies necessary: this happened to me many times, too, and for the same reason. I'll go now to read your post.
Thank you.
I never said that. We all know it is inexact.
and there is no collusion within the top level of BLS to manipulate the figure especially for a crucial figure like level of unemployment
Perhaps it is naive on my part. Most arguments for the collusion boil down to (i) it is possible and even easy (as you also mentioned in your post), and (ii) some people may have a motivation to do so (the regular agency problem in survey research), True, these conditions are necessary, but they are not sufficient. No, I don't think that in this country it is possible to fudge data for decades and get away with that.
Thank you for explaining your position in detail. I am sorry to say, I still disagree with your conclusion, however respectfully. Perhaps we could agree to disagree on this one?
Regards,
TQ.
you (a)consider that the unemployment figure reported is correct or not grossly misrepresented
No, please reread my numerous posts on this thread to confirm that I never said such thing. Firstly, an estimate may lack accuracy but be unbiased (I too trust that you know what an estimator and its bias are). Secondly, when an estimate is indeed biased it may be such for reasons other than deliberate misrepresentation. If the language I use does not suffice, ask an attorney why it is so much harder to prove fraud than negligence, and why a judge would throw out an allegation of fraud if intent is not demonstrated by the accuser.
(b) hold the opinion that the top management of the banks are blameless and has nothing to do with the failure of these banks e.g. GS, F&F, AIG
This begins to be really disturbing: where have I said that or anything remotely close? What I said was that it has become a hunting game wherein people (i) pin on the banks all, even nonexistent or someone else's sins, and (ii) do not bother to support their allegations with evidence.
Please reflect on the difference between this and your supposition.
(c) hold the opinion that the government is responsible for the failure of the banks (This is not an attempt to put words into your mouth, do correct me if I am wrong).
We had not one crisis but two related crises: a credit crisis and a housing bubble. No, the government has nothing to do with the failure of Lehman, which then startled lenders so much (reversal of too-big-to-fail) that they froze lending.
At the same time, yes, the entire housing bubble was created by the Community Reinvestment Act of 1998 and its implementation by Barney Frank and Maxine Waters.
you attempted to convince the members that there is no collusion on part of the BLS top level (in this case) or the top management in case of F&F,
No, (i) I explained why I personally do not believe in such collusion, and (ii) requested accusers of such collusion to provide evidence of it.
Why so? you may ask, because, they are as I said earlier, fragmented. Calculations are done on a regional basis.
You are absolutely correct. As I mentioned earlier, there are statistical methods to detect bias during aggregation (sorry I do not recall specific sources now to refer you to them). I expressed doubt that they would not be used in this case.
This cannot be reported to the Feds can it? What would the poor officer say... Officer to Feds: The rate of unemployment is 14% not 8%. I am here to report Mr. X who has deliberately taken a higher confidence level. Fed to Officer: Get lost
This is an exaggeration, but not too far from the truth. . One can indeed say and back up with documents: "At such an such meeting, A proposed to me that number X would not reflect well on administration's efforts and it would be better if we changed it to 0.95X."
That's how things are uncovered and proved in the court of law in the case of pharmaceutical, tobaco, asbestos companies --- dozens of times. Yes, people talk in the courtroom in terms of confidence levels, Student distributions, etc. Similar degree of technicality and sieving through e-mails to demonstrate intent was done in the case of Enron. You have seen how e-mails recently blew up into the faces of global-warming "scientists:" their owm, leaked e-mails condemned them. It's difficult to conspire for too long without being detected.
My only request to you is to refrain from attempting to convince people that the figure of unemployment at 8.9% is correct.
It is an absolutely justifiable request, and I am only happy to comply. I think I complied with it in the past. I personally would laugh if someone suggested that any figure is correct: it is nothing but an approximation, and most people (at least professionals in the economics, finance and policy fields) understand it as such.
To give an example: is 3.14 a correct figure for Pi? Of course not. Is 3.1415 a correct one? Of course not: it is a better approximation but not a correct value. As you know, I am sure, no decimal expression of finite length would be correct in this case. When someone says Pi = 3.14, most people understand what that means, and nobody is misled.
I trust you are also aware of the numerous political motivations behind distorting critical figures like unemployment rate.
Yes, of course. The question is whether they can and do get away with it, not whether they are motivated to do so.
I am actually among those people, too. The dynamics of the crisis itself (as opposed to its main causes) is not yet entirely clear for me. I am far from convinced that Paulson and Bush were justified in taking measures they did. I cannot say this more strongly, but the very idea of government bailouts of private companies is abhorrent to me, even when those companies are banks, which makes the situation more subtle and difficult. Unsurprisingly, therefore, I remain unconvinced that the bailout had to be done,
My point on this thread and elsewhere was a much, much smaller one: that bailout, however questionable and unjustified, was not asked for by the banks (as opposed to Detroit CEOs that were blackmailing Congress into giving them money). While the record on others is less known, Goldman specifically tried to refuse it and is on record to have said so.
What I am asking people to do is to know who their enemies are. If you abhor bailouts (as I do), be angry with the administration that perpetrated it., If you are angry at the deficits that will end up in either huge inflation or recession (or both), then be angry at the Congress and the President that passed those budgets and "stimulus" packages, not the Fed that has nothing to do with that. But for many, that does ruin a nice conspiracy theory.
So that pretty much what happens: I point out to someone that he is confusing monetary and fiscal measures, that is, attributing to the Fed the sins of Congress ---- they turn around and accuse me of "kissing the ass" of Goldman and the Fed and being a fascist.
This is just like the hysteria we've seen on the Left a few years ago. It is very sad to observe it among conservatives, because the inability to reason and getting angry at the wrong parties only weakens our conservative cause.
Thank you for the exchange, Notary Sojac.
P.S. Your point regarding "What we had, and still have, is a solvency not a liquidity problem, and until the balance sheets are purged and properly valued we will continue to have that problem" is also well taken.
CommieLiar, How is debt slavery to the FED capitalism?
Because it is NOT, lying Commie.
Kiss those commie butts of the TBTF.
You are a stalker, and boy, not a man, goes around stalking women on Free Republic, @ss. How is it in you mom’s basement, liar?
Bernanke is a Fiscal Moron
http://globaleconomicanalysis.blogspot.com/2011/03/ben-bernanke-is-fiscal-moron.html
Only complete idiots who have no life stalk women, CommieLiar.
BTW, there has been a trend toward erroneously blaming a few celebrities for our country’s economic demise, although most of those named do share some of the blame. The ones most responsible for the current debt regime were lesser known favored constituents long ago: those who pushed both political parties for allowing more American manufacturing plants to be built overseas and allowing unnecessary imports without adequate tariffs. Since, others have participated in stifling attempts to start new, domestic, small, manufacturing businesses (mostly local). Manufacturing is a necessary source of sustainable revenues.
Despite the causes of the problems, globalism is being corrected naturally by way of balancing currencies and rising demand for commodities. Eventually, the various peoples will return to their nations.
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