Economy continues to show signs of improvement

mcrain

macrumors 68000
Original poster
Feb 8, 2002
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The unemployment rate may have risen in April, but Friday's monthly job report was strong, offering an encouraging sign that the U.S. economic recovery possesses real momentum.

On Friday the U.S. Labor Department said nonfarm payrolls added 290,000 jobs in April, well ahead of Wall Street's 180,000 forecast. The unemployment rate on the other hand rose to 9.9%; it was expected to hold steady at 9.7%. The government also revised the amount of jobs added in March to 230,000, from 162,000.
The big story is the jump in payrolls." Speiss points out the manufacturing sector added the most workers since August 1998, while employment in the services sector saw its best gain since November 2006.
Overall, the economy expanded by 3.2% in the first quarter, the Commerce Department said last week, the third straight period of growth.
http://www.forbes.com/2010/05/07/unemployment-labor-jobs-markets-economy-consumer.html?boxes=marketschannelbrieflink2

It looks like the economy is continuing to slowly improve. I'm not an expert, but it looks like a lot of people must be entering the job market again. Otherwise, I'm not sure why the unemploymen rate would go up.

It's nice to have a little good news every once in a while.
 

Zombie Acorn

macrumors 65816
Feb 2, 2009
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Debbie Downer: 66,000 of those jobs are temporary census workers, half of that 3.2% GDP growth was for inventory adjustments, if our unemployment numbers are on the rise because people are suddenly trying to find a job then there is something terribly wrong with our unemployment statistics (namely that we don't count disgruntled job hunters).
 

mcrain

macrumors 68000
Original poster
Feb 8, 2002
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Illinois
Debbie Downer: 66,000 of those jobs are temporary census workers, half of that 3.2% GDP growth was for inventory adjustments, if our unemployment numbers are on the rise because people are suddenly trying to find a job then there is something terribly wrong with our unemployment statistics (namely that we don't count disgruntled job hunters).
Cite. You're using last month's arguments.
 

mactastic

macrumors 68040
Apr 24, 2003
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How long before Rush declares that these gains are the result of the policies of George W. Bush?

That makes what, three months in a row of job growth? Good to see finally. But considering we've lost 8+ million jobs, and that we need somewhere in the neighborhood of 110,000 new jobs created each month just to keep pace with the increase in size of the labor force, we're still in for a looooong jobs recovery.

As a reminder...
 

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Zombie Acorn

macrumors 65816
Feb 2, 2009
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Cite. You're using last month's arguments.

http://finance.yahoo.com/news/Jobs-up-290000-jobless-rate-apf-560235210.html?x=0&.v=6

May 7

More confident employers stepped up job creation in April, expanding payrolls by 290,000, the most in four years. The jobless rate rose to 9.9 percent as people streamed back into the market looking for work.

The hiring of 66,000 temporary government workers to conduct the census helped overall payroll growth last month.


GDP growth:

http://www.thestreet.com/story/10737975/1/gdp-report-an-anti-middle-class-recovery.html

April 29

"Adjustments to inventories accounted for 1.6 percentage points of growth. Demand for U.S.-made goods and services -- the key to sustainable growth -- added only 1.6 percentage points to growth."
 

mcrain

macrumors 68000
Original poster
Feb 8, 2002
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The rise in the unemployment rate is actually a sign of improving perception of labor market conditions. The increase was due to an uptick in job seekers who had previously been discouraged and dropped out of the job market. There was a jump of 805,000 workers returning to the labor force in April alone.

"When you think about the force it takes to get 800,000 beaten-down people off the couch and back on the street looking for work, that's pretty significant," said Lakshman Achuthan, managing director of Economic Cycle Research Institute.
Hey Debbie Downer:
The job picture got a lift from the addition of 66,000 jobs by the U.S. Census Bureau, which is in the process of completing the once-in-a-decade headcount of the U.S. population.

But the gains went far beyond that one-time Census boost, as private sector employers added 231,000 jobs. And the gains were broad based, as nearly two-thirds of industries across the private sector added jobs rather than cutting staff.

Manufacturing did exceptionally well, adding 44,000 jobs, the biggest one-month gain in the sector since August 1998. Construction added 14,000 jobs, the second straight month of gains after nearly three years of uninterrupted job losses in that battered sector.
Temporary help services added 26,200 jobs, which economists see as an important sign of future hiring, since employers often take on temporary workers before they add permanent staff. Temp workers have now increased by 330,000 over the last seven months after roughly three straight years of job losses there.
http://money.cnn.com/2010/05/07/news/economy/jobs_april/index.htm?source=cnn_bin&hpt=Sbin
 

patrick0brien

macrumors 68040
Oct 24, 2002
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The West Loop
This is an encouraging sign. The only surprise is the sheer number of private-sector jobs creation being as high as it was. The census workers contributed, but was a blip - thank goodness.

As for the unemployment ticking up, the U3 number is the "Official" unemployment number, and that includes those coming back into the job market. So when a bunch of folks are sitting in the U4 number (unemployed and not looking, a.k.a. "Discouraged"), hear that hiring is looking good, they jump back in, therefore "leaping" from the U4 to the U3, and kicking it up. This is a good sign and quite normal for the ending of a recession, and the beginnings of the next boom.

Sources:
U1: Percentage of labor force unemployed 15 weeks or longer.
U2: Percentage of labor force who lost jobs or completed temporary work.
U3: Official unemployment rate per ILO definition.
U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons (underemployment).

from Linkypoo 'cause I know you guys like it ;)
 

Zombie Acorn

macrumors 65816
Feb 2, 2009
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I just wanted an accurate picture being painted. I am glad the economy is gaining jobs if they are permanent full time work. I would rather people be realistic rather than overly optimistic.
 

rdowns

macrumors Penryn
Jul 11, 2003
27,345
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Thank god for George W. Bush and Dick Cheney, real American heroes andpatriots, herein.
 

patrick0brien

macrumors 68040
Oct 24, 2002
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The West Loop
I just wanted an accurate picture being painted. I am glad the economy is gaining jobs if they are permanent full time work. I would rather people be realistic rather than overly optimistic.
Ergo the U3 number - it's permanent positions, not U6. Yes, good thing.

rdowns said:
Ihank god for George W. Bush and Dick Cheney, real American heroes andpatriots, herein.
Aw, c'mon, that's too easy! Ya got anything better to stir the pot?
 

mactastic

macrumors 68040
Apr 24, 2003
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...if our unemployment numbers are on the rise because people are suddenly trying to find a job then there is something terribly wrong with our unemployment statistics (namely that we don't count disgruntled job hunters).
I assume you know about U3 and U6, right? The U6 count is what you should be looking at if you're interested in counting the number of people who have given up looking for work along with all the other ways of being un- and under-employed, and thus don't show up in the U3 count.
 

flopticalcube

macrumors G4
Much of the jobs figure is an estimate taken from the birth/death model. How accurate that estimate is is anyone's guess. The other factor here is what quality are the new jobs? Are people taking pay cuts to get work? I would assume they are. What if there is a double dip recession? Since the consumer has stopped spending and continues to de-leverage the US economy must turn to exports to expand but how can it when the dollar is rising so fast making the products uncompetitive?
 

patrick0brien

macrumors 68040
Oct 24, 2002
3,238
0
The West Loop
You're damn fast. I realized my mistake just as I hit "submit reply" button, and in the intervening 30 seconds or so, you had already quoted me. I think I'll refer to you as "Lightning" from now on. :p
I do have a shocking personality-THANKS!!! I'll be here all week!

I'm so fired...
 

Rodimus Prime

macrumors G4
Oct 9, 2006
10,132
4
I assume you know about U3 and U6, right? The U6 count is what you should be looking at if you're interested in counting the number of people who have given up looking for work along with all the other ways of being un- and under-employed, and thus don't show up in the U3 count.
In this economic depression U3 is useless for telling the real story. Average unemployment is over 6 months. I have read from multiple sources that at that point people start giving up. I also know from personal experience that the longer you are unemployed the worse the motivation gets to look to whats the point this are so bad no one wants me.

I have all but given up looking because I can not take the emotional wear and tear of the no calls, no interviews and so on. Getting the hopes up takes more out of me. Now I am completely retooling and getting a degree in another field and one that is much more recession proof than my last one as is one that can work in multiple industries.

Either way U3 is not worth anything any more on how bad things are. Right now the only number that matters us U6 because it shows a much truer picture.
 

Rodimus Prime

macrumors G4
Oct 9, 2006
10,132
4
I agree, unfortunate we aren't the ones writing economic policy.
Now I agree when things get better we can switch back to U3 but first we need to get the 14+ million people who lost their jobs plus the next few million added work force before we could consider switching back U3. I would alsomst say from right now we would almost need to add 20+ million people to be employed compared to days number before we can go back to u3.

Reason I am saying 20+ millino is to account for market growth over the time it takes to people being added to the work force. At the rate of lets say a million people being add per year from when the market started dropping to fully recover that is a lot to deal with. We already have added over 3 million and we will be added a few million more before things are better. Also it has to be sustained.
 

Desertrat

macrumors newbie
Jul 4, 2003
2
706
Terlingua, Texas
Folks at places like Everbank.com seem rather scornful of the birth/death model, and they're not alone in that attitude.

It's my understanding that the way joblessness was measured in the 1930s equates to today's U6, for comparison, FWIW.

http://finance.yahoo.com/career-work/article/109471/meet-the-unemployable-man?mod=career-work

""A good guess…is that when the economy recovers five years from now, one in six men who are 25 to 54 will not be working," Lawrence Summers, the president's economic adviser, said the other day."

Given the ongoing housing mess, the commercial real estate problems, energy and the incredible amount of both public and private debt, five years seems rather optimistic. And too much potential for a further decline kicking in later this year.

Damfino...
 

Desertrat

macrumors newbie
Jul 4, 2003
2
706
Terlingua, Texas
bobertoq, the spin is that it means more people are showing up to look for work, thus getting on record as "unemployed, looking".

The problem in really knowing about what's going on is that it's only from home telephone surveys that any clue is held as to how many are out of work, no longer receiving benefits (and thus off the records), and have given up on looking for work.

The happy noises about hiring slides past the fact that all these census workers--three times as many as in any past census effort--will again be unemployed before too much longer.

Another factor is that the rate of hiring in government is much higher than the rate of hiring in the private sector. Any income helps any employee, of course, but government paychecks are as always a drain on the overall economy.
 

mcrain

macrumors 68000
Original poster
Feb 8, 2002
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Illinois
bobertoq, the spin is that it means more people are showing up to look for work, thus getting on record as "unemployed, looking".

Any income helps any employee, of course, but government paychecks are as always a drain on the overall economy.
Two things. First, it is not spin. If people who were not counted in the official unemployment figures (due to their choice to stop looking for work), decide that the economic picture is getting better and start looking, it actually is a signal that the "mood" or "perception" of economic growth is getting higher. That perception leads to people spending, and additional economic growth. It is not spin, and it is not only being pushed by one side for political gain. It's something market and economic experts look to when measuring trends.

Second, govenment paychecks are not always a drain on the overall economy. You are maligning the service of people who have dedicated their lives and careers to a field where jerks malign them, they are many times underpaid, and don't forget what they are doing is necessary and for your benefit.

Reagan was the first in a long line of ***holes who have tried to insist that the best government is less government. He did everything he could to reduce government and reduce its effectiveness to benefit businesses who were regulated by an effective government. LOOK where that has gotten us.

I've worked private and public sector, and I can tell you both types of jobs benefited the economy as a whole.