Saturday, March 05, 2011

EconomyUSA: UPDATE Unemployment: NYT more optimistic about interpretation of new data

Update to yesterday's post with my editorializing on the marginal rise in job increases USA, based on WaPo materials (Mar4,2k11) and the new labor statistics.  

Today, I turn to an article in New York Times also published yesterday (Mar4,2k11); please note that when you click up NYT you must log in, or register for the first time.  They'll want a username and password.  As it turns out.  the two articles are journaletically competitive, and as I read them offer evidence of the different slant of the two writers, their desk editors and headline writers.  I note for philosophic readers who may wish to over-read "slants," that one can't thus say the two different editorial slants reveal a different set of religious presuppositions as such.  Rather, in these cases the journaletic results reveal a more optimistic interpretation of Unemployment and New Jobs data (NYT) in comparison to what seems to me to be a more neutral and fact-based approach to the same data by WaPo.  In any case, some realities about the statistics themselves must be mentioned.

First,  in my news-surfing today, I was struck by how the NYT headlined "Private Jobs" in its coverage by reporter Catherine Rampel's article "Big Jump in Private Jobs Bolsters Recovery Hopes."  That is an important fact upon which the headliner focuses -- the USA Labor Department's statistics just released is about "private jobs" (not private only, becawz the aggregating itself reveals the social/societal dimension of American employment; but nevertheless "private" in the sense that the jobs aggregated and surveyed in the present statistics are jobs created in the free-enterprise system, govt regulation and all, that typifies the American economy).  These jobs which have "jumped" in numbers are not "public jobs" (this term too is a misnomer, since what we are talking about in the opposed category are jobs created by govt -- which are being questioned in many states right now as the expenses of the state in regard to "public jobs" are at taxpayers expense, and are a significant factor in unbalancing the American economy.  I do appreciate how the Rampel article is headlined by an important recognition of what kind of jobs are aggregated in the Labour Department's report.  I also think that these jobs can be further designated as non-farm private jobs; farm jobs are a separate category in the system and the Labor Department's reporting usually (and I hope to blog on them later).  All that said, I want to focus further on the term "jump" -- looking at the statisical facts does not lead me to take confidence in the conceptual construal of some great change.  Yes, one can justly talk about a marginal change that is a jump of some sort (a small jump?), but only relative to the downward spiral of USA employment since the 2k08 Meltdown, an unemployment spiral downward, and drastic increase of joblessness.  Relative to that, we can talk about a meek jump perhaps.  But that terminology is misleading on a number of counts.   Also marshalled to fortify the Labor Department's underthread to its report is the item that cites the severe snow storms in January, a rhetorical slite of hand, it seems to me, that conflates temporary work stoppage that does not erase a laid-off person's job-position (and wasn't long enuff in duration, also, to qualify snow-stopped workers from collecting benefits from the govt for those days missed). 

Also, to continue with the rhetorical motif, one notices that snow was on the mind of someone composing the Lab Dept's text, or the reporter's, or both.  The snowball argument  -- “Economic recoveries can be like a snowball rolling down a hill, in that it takes time to get some momentum,” said John Ryding, chief economist at RDQ Economics. “People hesitate until they feel that the recovery’s durable enough, and then they have a tendency to jump in. Maybe we’re finally getting to that jumping-in moment.” -- seems overrawt to me.  The truth in it is the verb  phrase "can be" but, on the other hand, economic recoveries can also be not like a snowball rolling down hill, but instead can be much like a cross-country skier trying to climb a mountain, a painfully slow recovery at best.
We see here the level of unjustified hope, wishful thinking that characterizes NYT's approach to the interpretation of the LabDept's stats.  Taking cue from the LabDept's rhetoric, the journo expands the snow job by citing an expert using a metaphor about what coud be, hopefully, wishfully.

Third, there are indeed blockages to a continued longterm upward climb, let alone leapfrogging statistics and optimism about the strategies of employers regarding the pace of new job creation.  NYT's unwarranted optimism becomes rather clear at this point in its argument with all its rhetorical posing.  

Threats to a more robust recovery remain, of course, including a surge in energy and food prices, with the possibility of disruptions in oil production in the Middle East continuing to weigh on the financial markets. State and local governments are also shedding jobs, which depressed the total for February, as they grapple with budget woes.  ¶  But for now, the improvement is notable.  ... 
The surge in prices covers far more more than fuel (principally oil and related commodities regarding which both price-at-the-pumps and investment speculation are ramapant) and food, as the Consumer Price Index points out (Feb17,2k11 LabDept report for January2k11).  The rising-price threat has momentum, prices are rising almost across the board, not just food and fuel.
The Consumer Price Index for All Urban Consumers (CPI-U) increased

0.4 percent in January on a seasonally adjusted basis, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months,
the all items index increased 1.6 percent before seasonal adjustment.
Increases in indexes for energy commodities and for food accounted
for over two thirds of the all items increase. The indexes for
gasoline and fuel oil both increased in January [and into February 
and March with a vengence -- EconoMix], continuing their
recent strong upward trend. The index for food at home posted its
largest increase in over two years with all six major grocery store
food group indexes rising.
The index for all items less food and energy also rose in January.
The indexes for apparel, shelter, airline fares, and recreation all
posted increases. In contrast, the indexes for new vehicles and for
used cars and trucks declined in January.
Over the last 12 months, the food index has risen 1.8 percent [not
with yet counting Feb and Mar -- EM] the food-at-home index [index 
for food you buy and eat at home, but not at restaurants or fastfood 
outlets] up 2.1 percent; both 12-month changes are the highest since 
2009. The energy index has increased 7.3 percent overm the last 12 
months [not yet counting Feb and Mar - EM], with the gasoline index 
up 13.4 percent. The index for all items less food and energy has 
risen 1.0 percent [not yet counting Feb and Mar -- EM].
Thus, prices have increased for food, energy apparel shelter, airline fares, and recreaction.  This is no threat alone, this is the trajectory of a trend that is a fact-based actuality across America. We shoudn't hide from the truthfulness of what these stats indicate and what Americans are experiencing whenever they go to the grocery store or the pump.

                Seasonally adjusted changes from preceding month 
                              July    Aug.   Sep.   Oct.    Nov.   Dec.   Jan.   ended 
                              2010  2010  2010  2010  2010  2010  2011   Jan.  
 All items..................    .3    .2    .2    .2    .1    .4    .4      1.6
  Food......................    .0    .1    .3    .1    .2    .1    .5      1.8
   Food at home.............    .0    .0    .4    .1    .2    .2    .7      2.1
   Food away from home (1)..    .0    .3    .3    .1    .1    .1    .2      1.5
  Energy....................   3.3   1.6   1.1   2.5    .1   4.0   2.1      7.3
   Energy commodities.......   5.6   2.6   2.2   4.4    .7   6.4   4.0     13.4
    Gasoline (all types)....   6.2   2.9   2.2   4.5    .7   6.7   3.5     13.4
    Fuel oil (1)............  -1.6    .9    .8   4.7   4.2   4.9   6.8     17.3
   Energy services..........    .5    .4   -.4    .0   -.8    .6   -.6      -.7
    Electricity.............    .4    .1   -.1    .2    .6    .3   -.5      1.2
    Utility (piped) gas                                                        
       service..............    .8   1.4  -1.4   -.6  -5.3   1.7  -1.2     -6.4
  All items less food and                                                      
     energy.................    .1    .1    .0    .0    .1    .1    .2      1.0
   Commodities less food and                                                   
      energy commodities....    .1    .1   -.2   -.2    .0   -.1    .2      -.2
    New vehicles............    .1    .2    .1   -.1   -.2   -.1   -.1       .1
    Used cars and trucks....    .5    .9   -.4   -.6    .1   -.1   -.3      2.4
    Apparel.................    .1    .0   -.5   -.2    .1    .1   1.0       .0
    Medical care commodities                                                   
       (1)..................   -.2    .2    .3    .1    .2    .1    .5      2.7
   Services less energy                                                        
      services..............    .1    .0    .1    .1    .2    .1    .1      1.4
    Shelter.................    .1    .0    .0    .1    .1    .1    .1       .6
    Transportation services     .0    .0    .3    .3    .4    .2    .6      3.4
    Medical care services...    .0    .2    .7    .2    .2    .3   -.1      3.0

   1 Not seasonally adjusted.
The past, present, and future consequences of this trend hits small businesses first and results in lay-offs 
of workers in restaurants, corner stores, and myriads of other kinds businesses where the owners (who 
often also are workers) must purchase on daily or other short-term basis and cannot buy in sufficient bulkto keep supplies coming in with which to supply customers and clients.

The rising costs of healthcare under the Obamacare regime also affect small businesses and individuals (under the Individual Mandate) with the result of layoffs of workers, closure of businesses, and bankrupticies.

Taxes and failure of various levels of govt to make spending cuts also results in layoff of workers, closure of businesses, and bankruptcies when considered from the standpoint more or less jobs for workers an woudbe workers.

Fourth, we must confront the terminology that the LabDept uses, the terminology being the set of statistical categories employed and the set with which journos like Rampell are forced to adopt to report on the LabDept releases of the aggregated results of statistics gathered for a certain period, a month or a year or larger time-periuod sampling.  Rarely can a journo responding within an hour or even 24 hours pause to dialogue with the categories in which their reportage is taken captive.

4A.) Let's start with the binomial construct of "Employed" vs "Unemployed",' which basic set we may conveniently tack on the additional designations of Under-employed and even Over-qualified (hereafter I'll generally drop the quote-marks and depend simply on capitalization of each term I analyze and discuss, because they are statistical categories in how the govt counts and the LabDept, thru its Bureau of Labor Statistics, categorizes its questions to employers and claimants for unemployment benefits in the various states.  To be Unemployed is not necessarily to lack a job.  Many people have jobs which are remunerated with cash (never recorded with a paycheck), room and board (a combo of room board and unrecorded cash payments are the usual remuneration for undocumented domestic workers and nannies -- and this applies also to American citizens born in the country who have to accept these conditions, each for her own, or his own, reasons of a difficult life).  This is only one kind of job-holding with no or diminished pay, another example being children of shopkeepers and farm families, where the societal distinction between the sphere of family and that of business is hybrided (Herman Dooyeweerd). The govt can only count documented jobs and documented Employees (even here the figures are difficult to correlate with payscales in many cases, becawz of all sorts of benefits that may accrue to some such Employees that do not match those of other such Employees who do not receive the same benefits but must pay out of pocket for the benefits they want.  In other words, the same payscale can be a deceptive technique that obscures the inequality; but I'm not arguing here for absolute equality of benefits, rather I'm just noting that the LabDept's statistics can't tell us what's going on with Employment (the Internal Revenue Service, on the other hand may have much to tell us, especially with upper tax-bracket Employees where compensatory benefits can be huge and appear somewhere on the employing company's books, leaving IRS accountants and auditors with a task of ferreting out the truth of compensation levels at the top of the jobs-hierarchy.

Having just noticed how being Employed does not mean you actually have an above-ground job, but rather that you are not Unemployed; now let's examine how being Unemployed does not mean you are counted in that category by the Bureau, in this case, becawz Unemployed means you are either receiving unemployment benefits or otherwise regarded as actively looking for employment.  However, if stop looking for a job in the accounted free-enterprise system or with above-ground govt employment which includes many educational institutions, or programs financed by govt grants, you are no longer Unemployed nor Employed.  You are rather a Discouraged Worker, and as such you cost neither an Employer or a govt Unemployment agency anything.  If you go onto the dole, you are inscribed as a Welfare recipient and you are paid a miserable sum by the govt Welfare system -- that is, by the taxpayers.  But not all Discouraged Workers are recipients of Welfare benefits, and in most jurisdictions Welfare benefits do run out in time -- unless you are classified as permanently Disabled bodily, or a Doctor-certified mental-health case.

4B.)  Speaking in terms of a complete systems analysis of American Unemployment, we have to note, more than in passing, that Unemployment in our society has specific public-legal meanings, now including Obamacare, that indicates a person does not have a job but had one from which she or he was fired or laidoff.  If laidoff, the person becomes part of the aggregate statistic for Unemployment benefits for a certain period of time in the course of which he/she is supposed to look for work or move onto Welfare or be medically-certified for Disablity or get into a welfare-like govt-designated and taxpayer funded program of education or apprenticeship or retraining, etc.  Short of fitting into any of these categories and income-providers, the Unemployed person is Disappeared.  The system benefits from all the Disappearance, except where a Disappeared person enters a life of crime, pertty or otherwise.  Such a person may reappear as a Prisoner in a jail or actual prison.

This blog entry is still in development.  Time for bed. -- EconomMix

4C.)  Rampell's NYT article alludes in passing to the noncategory of Discouraged Workers who are counted only when they disappear from the Unemployment stats.  

4D.) Workers displaced by the incoming generation of new workers.  The role of training in permanently displacing workers 

4E.) Technological changes account for both the slowness of job creation in the free-enterprise system, and marginal increases ('jump') that coud possibly presage the rapid increases for which NYT devoutly hopes.

-- more to come, EconoMix

Big Jump in Private Jobs

Bolsters Recovery Hopes

Chris Hondros/Getty Images
Visitors checked job listings at a state employment services office in New York on Thursday.

The economic waiting game may soon be over, as businesses signal that they are finally willing to resume widespread hiring.
Change in the number of jobs
Source: Bureau of Labor Statistics

The New York Times

Readers' Comments

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In all, the nation added 192,000 jobs in February, a big jump from the 63,000 added the previous month, the Labor Department reported on Friday.
The job growth was the most in nearly a year, and the 12th consecutive month of gains by companies, which added 222,000 workers last month. It followed an unusually weak report in January, when major snowstorms across the country prompted offices and factories to close.
Taken together, the first two months of the year produced growth at about the same pace as last fall.
Economists say they are hopeful the pace will soon pick up further.
“Economic recoveries can be like a snowball rolling down a hill, in that it takes time to get some momentum,” said John Ryding, chief economist at RDQ Economics. “People hesitate until they feel that the recovery’s durable enough, and then they have a tendency to jump in. Maybe we’re finally getting to that jumping-in moment.”
Threats to a more robust recovery remain, of course, including a surge in energy and food prices, with the possibility of disruptions in oil production in the Middle East continuing to weigh on the financial markets. State and local governments are also shedding jobs, which depressed the total for February, as they grapple with budget woes.
But for now, the improvement is notable. The unemployment rate ticked down to 8.9 percent last month, falling below 9 percent for the first time in nearly two years. This rate, which comes from a survey separate from the payroll numbers and is based on the total number of Americans who want to work, has remained stubbornly high the last year. Altogether, 13.7 million people are still out of work and actively looking.
Economists say the unemployment rate could rise temporarily in the next few months, as stronger job growth lures some discouraged workers to look for jobs again. Right now, just 64.2 percent of adults are actively involved in the work force, meaning they are either in a job or actively looking for one. That is the lowest participation rate in 25 years, an indication that many Americans are either staying home, going back to school, raising children or otherwise waiting for better conditions before applying for work.
“It’s a puzzle, a genuine puzzle why that number has been stuck,” a senior economist atCredit Suisse, Jay Feldman, said. “I expect it to recover somewhat in the coming months as the labor market improves and more people become encouraged about their job prospects.”
Other recent economic reports — like those on unemployment claims and manufacturing — have pointed to stronger demand for workers. The Federal Reserve, in a survey of its 12 districts, noted on Wednesday that the labor market had improved modestly, but the Fed chairman, Ben S. Bernanke, told lawmakers that “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.” 

1 comment:

Staffing Supplier said...

Even though year 2011 seems to be improving the economic situation, the growing concern about unemployment still looms at large.