An expanded version of an earlier commentary is up on both The Street.com (no subscription req’d) and Real Money, titled Rethinking the ‘Strong Jobs Recovery’ Scenario.
You will no doubt recognize many of these points discussed previously.
Here’s an excerpt:
"Job creation is crucial to any economic expansion. It directly affects consumer spending, and it’s one of two key factors determining the health of real estate (the other being interest rates). One cannot overstate the importance of job creation to the economy.
Lately, the White House and Treasury Secretary John Snow have been trumpeting the fact that the economy has created 4.4 million new jobs since May 2003.
Inquiring minds want to know: How legit is that number? How was it derived? How does this job-creation data compare to prior cyclical recoveries?
Let’s zoom in on the actual employment numbers and see what’s there."
Lots of contrary stuff here . . .
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UPDATE: December 23, 2005 10:48am
David Altig correctly alerts me to an error in the column: According to the NBER, the most recent economic peak occurred in March 2001, ending a record-long expansion that began in 1991. The most recent trough occurred in November 2001. (I regret the confusion).
This changes some of the math: From the beginning of the recession to last month, about 1.8 million jobs were created. Measured from the end of the recession, we see 3.4million new jobs. Measured from March 2003, we see the 4.4 million new jobs. None of these measures take into account the 2.6 million jobs lost from 2001 to 2003.
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Source:
Rethinking the ‘Strong Jobs Recovery’ Scenario
RealMoney.com, 12/21/2005 7:09 AM EST
http://www.thestreet.com/_tscana/markets/economics/10258387.html
This piece is not as strong as your excellent criticism of the government’s crazy calculation of the CPI. To wit, the current unemployment rate of 5 percent is lower than the average for the 1990s (5.7 percent). Our economy has lots of potential problems, but the current state of the job market isn’t the chief among them.
That’s not the issue I was addressing: The Treasury Secretary has been pounding the table describing how powerful the Job creation has been —
It turns out he is mistaken . . .
Politicians like Snow are always so full of PR that most of their pronouncements are unworthy of your time.
I would love to see a deft analyst such as yourself analyse the data in support of or refuting Bernanke’s contention about the “SAVINGS GLUT”. My instinct suggest to me that “the glut” is an illusion flowing out of the super-liquidity created by the Asian central banks. I think it is a critical question, & I would think the data might exist to answer the question.
A surplus of savings bodes a much better future than an inflated supply of money.
Dr. Kurt Richebächer Has It Right!
On Dec. 10th. I wrote about the The Mess That Greenspan Made. Dr. Kurt Richebächer called attention to the fact that employment in this economic recovery was not nearly as robust as previo…
See this related article regarding job creation from the small business sector. An analyst at the American Enterprise Institute takes issue with the commonly held belief that these companies are significant job creators.
Makes me further question the BLS’s birth/death adjustment.
http://www.kansascity.com/mld/kansascity/business/13461008.htm
http://www.aei.org/workingpapers .
What ever the case may be, this market is tired. Morphogeneticly speaking…..people are catching on.