Posted on 12/07/2005 11:46:30 AM PST by Sonny M
The November payrolls job report was announced Friday with the usual misleading hype. Spinmeisters made the most out of the 215,000 jobs. Looking beyond the glitter at the real facts, this is what we see. Twenty-one thousand of those jobs were government positions supported by taxpayers. There were only 194,000 new jobs in the private sector. Of those, 37,000 are in construction and only 11,000 are in manufacturing. The bulk of the new jobs – 144,000 – are in domestic services.
Wholesale and retail trade account for 20,000. Food services and drinking places (waitresses and bartenders) account for 38,000. Health care and social assistance account for 27,000. Professional and business services account for 29,000. Financial activities gained 13,000 jobs. Transportation and warehousing gained 8,000 jobs.
Very few of these jobs result in tradable services that can be exported or help to close the growing gap in the U.S. balance of trade.
The 11,000 new factory jobs and the 15,000 of the previous month are a relief from the usual loss. However, these gains are more than offset by the job cuts recently announced by General Motors and Ford.
Despite the gains, total hours worked declined, as the average workweek fell to 33.7 hours. The decline in the labor force participation rate, a consequence of the shrinkage in well-paying jobs, masks a higher rate of unemployment than the reported 5 percent. The ratio of employment to population fell again in November.
Average hourly earnings (up 3.2 percent over the last year) are not keeping up with the consumer price index (up 4.3 percent). Consequently, real incomes are falling.
This is not the picture of a healthy economy in which growth in high productivity, high value-added jobs fuels the growth in consumer demand and provides savings to finance Washington's red ink. What we are looking at is an economy that is coming unglued from the loss of jobs that provide ladders of upward mobility, and from massive trade and budget deficits that are resulting in unsustainable growth in indebtedness to foreigners.
The consumer price index measures inflation at 4.3 percent over the past year. Many people, experiencing household budgets severely impacted by fuel prices and grocery bills, find this figure unrealistically low. PNC Financial Services has a Christmas price index consisting of the gifts in the song, "The 12 Days of Christmas." The index reports that the cost of the collection of gifts has risen 6 percent since last Christmas. Some of the gifts have risen substantially in price. Gold rings are up 27.5 percent, and pear trees are up 15.4 percent. The cost of labor (drummers drumming, maids-a-milking) has remained the same.
Populations are hard-pressed when the prices of goods rise relative to the price of labor, because this makes it impossible for the population to maintain its standard of living.
The U.S. economy has been kept alive by low interest rates, which fueled a real estate boom. Consumers have kept growth alive by refinancing their home mortgages and spending the equity in their houses. Their indebtedness has risen.
Debt-fueled growth is qualitatively different from economic growth that results from an increase in high value-added jobs. Economists who look at the 3-plus percent economic growth rate and conclude that things are fine are fooling themselves and the public. When the real estate boom ends, what will be the source of new spending power?
"Very few of these jobs result in tradable services that can be exported or help to close the growing gap in the U.S. balance of trade"
Maybe they just want to feed their families.
This unfortunately doesn't even begin to keep up with the cuts, from GM (30,000) and Ford (30,000) and Northrup-Grumman (2,300)...
Yes. They do. Ford is a manufacturing company and yet the majority of the employees are white collar. It's typical for most industries. The numbers of small company manufacturers here is staggering. Even in the Seattle area. I work with several small sheet metal shops, crane manufacturers, electrical specialty shops....and that's just the stuff dedicated to a small segment of our economy. Small companies also tend to be light on overhead and heavy on production.
Clearly a typograpical error.
However, the following flatulent, quasi-intellectual statement has no punctuation whatsover.
Caught in repeated political errors and repeated misstatements on economic realities just lie lie lie then lie some more rather then admit the complete intellectual bankruptcy of their failed neo-isolationist dogma
And, of course it ignores the fact: The bulk of the new jobs – 144,000 – are in domestic services. Which I am sure just brightens the day of an open-border, cheap-labor proponent who can't wait to expand the servile class.
You mean he paid the $500 bucks when he got the letter in the mail congratulating him for being named to the list?
Enter the BLS payroll v. household surveys hubbub -- and (IMO) ILLEGAL immigrants.
I believe that the household shows a loss of 52,000 jobs. Friday, December 2, 2005 BLS Employment Situation.
I recall that only "Bush bashers" would prefer the payroll over the household. What gives?
So how come household shows a loss? And where are its proponents? (Just kidding) Were all those lost jobs farm jobs? If so then they have to be farm jobs when household exceeds payroll, right? :)
Is it possible that it has to do with "recent immigrants" versus citizens and established immigrants?
As reports by, for example, Northeastern University labor studies have pointed out, citizens and established immigrants often lose out to "cheap" labor recent immigrants and I suppose recent immigrants are not likely to be included in the household survey. They do show up on a company's payroll however while citizens and established immigrants are sitting home without jobs.
Consider this Bush bashing, whatever, if you want -- but here's something else that puzzles me. Conservative talk show hosts of course brag about the job figures as well they should. But in the past they and their guests carefully explained how the household survey beats the payroll survey.
These same talkshow hosts also rightly point out at other times that there is a big problem with ILLEGAL immigration -- though some favor flipping over to calling them "guest workers" to solve the problem. Why not consider the two together?
The mainline of both Parties ignore the connection it seems to me.
>> ...and only 11,000 are in manufacturing.
This unfortunately doesn't even begin to keep up with the cuts, from GM (30,000) and Ford (30,000) and Northrup-Grumman (2,300)... <<
Roberts displays his ignorance. Don't join him.
Please correct me if necessary, but the ACTUAL job gains in manufacturing occurred in November, right? Those already took place.
In contrast, the GM, Ford, Northrup situations are ANNOUNCED cuts that have yet to happen and MIGHT occur over a period of months of even years. right?
It doesn't matter how lengthy is the economics background of Roberts. He has an anti-America agenda and has been a Chicken Little about the U.S. economy for at least four or five years.
Roberts has been predicting a collapse of the U.S. economy since 2001 and has been wrong at every turn. Roberts is a Bush-hating, Bush-bashing John LeBoutillier of economics -- and wrong just as often, which is almost all the time.
Even worse, he committed a classic error, accidentally or on purpose: Roberts mixed apples and oranges. He tried to compare job gains that have already happened to job losses that are announced and will not occur all in one month.
Plus, the job cuts announced by the three companies, while they are manufacturing companies, will probably not 100 percent consist of manufacturing jobs. There will probably be a number of office jobs involved as well. So there is another flaw in attempting to compare the two events.
Roberts is misguided. He doesn't need lemmings to plunge off the cliff with him.
-George
What comment did I make that irritated you so much? I really hope you'll point it out to me. (I'm the first response on the thread)
I couldn't care less what Roberts' background is, but he commits Paul Krugman-like distortions. Don't join that quagmire.
Roberts' primary fallacy is he compares the ACTUAL job gains in manufacturing that have already occurred (in November 2005, in this case) to ANNOUNCED job cuts that HAVE YET TO OCCUR). It is flawed reasoning to equate those two.
Plus, not all of the job cuts planned by these manufacturers will occur in manufacturing.
His basic complaint about the manufacturing numbers has no foundation.
Now, let's look at the government jobs. Roberts and others here whine about the 21k or whatever the number was of government jobs. That number is only meaningful when compared to other numbers.
So over the 12 months that ended in November 2005, here are some FACTS about the job market, rather than the Bush-bashing, Buchanan Kool Aid that Roberts and others love to indulge in.
Again, over the most recent 12 month period:
-- Non-farm payroll numbers (the number that equates to the 215,000 new jobs headline number from the recent report)
+2 million jobs
+1.5 percent
--Number of employed residents (The household survey)
+2.3 million jobs
+1.6 %
--Private sector employment (from payroll survey)
+1.8 million jobs
+ 1.7 %
--Government jobs (payroll survey)
+166,000 jobs
+0.8 percent.
As you can see, over time, the household survey continues to out-perform the payroll survey.
That refutes the complainers who say we have given up on looking at the household survey just because it had one bad month.
The data also refutes whiners who say we are hiring too many government employees.
To be sure, philosophically speaking we still might be hiring too many govt. workers. But we are hiring them at less than half the pace we are adding private sector jobs.
Bottom line: Roberts, as usual, is full of it. Don't board that RMS Titanic.
-George
If Paul Craig Roberts is such a renowned economist, then he ought to tell us how he'd like to see these 194,000 new private-sector jobs broken down among these different sectors -- and then tell us all when the U.S. ever had an employment profile like that in its history.
Unemployment among people who have completed almost every level of formal education from high school on up is markedly lower than the national average -- and in some cases is very substantially lower (college graduates, for example). The only group with an unemployment rate above the national average is high school drop-outs -- which means the numbers are heavily distorted by this group.
Based on what I've seen in the job market and in my industry in particular, I would make the case that any American who speaks proper English and is reasonably presentable to a prospective employer has to try very hard to be unemployed these days.
Definite bias..... New actual jobs being offset by future job cuts. (Many of the job cuts are cuts by attrition. Not actual cuts.)
During 1981-82 he served as Assistant Secretary of the Treasury for Economic Policy. President Reagan and Treasury Secretary Regan credited him with a major role in the Economic Recovery Tax Act of 1981, ...I don't personally know Roberts, and don't care to meet him. I have read his articles occasionally, as I have those of Sowell, Williams, et. al., for over 25 years. While I may not agree 100% with any of them, that doesn't prevent me from considering the information they present.
This guy Paul Craig Roberts never has anything good to say about anything.
He is really depressing, and has been for quite some time now.
PCR returns!
Laz is dead.
Long live the Laz!
"consumers have been buying the cars of other manufacturers."
Many of which are made here. The GM Ford stuff would be much more dire if the vehicles that they made were being brought in from China or India or Japan.
Many though, are made here in the US.
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