Thursday, September 11, 2014

Jobs And Joblessness -- September 11, 2014; CNBC Finally Starts Talking About The 800-Pound Gorilla

I got a late start, so I post the links and then come back to them later.

BusinessInsider is reporting: initial jobless claims rise to 315,000. Horrible. Expectations were for claims to total 300,000, down slightly from last week's 302,000.
The four-week moving average of claims rose slightly to 304,000. 
Ahead of the report, Ian Shepherdson, chief U.S. economist at Pantheon Macroeconomics, said he was "nervous that today’s claims report will show a clear jump from last week’s 302K, thanks to the difficulty of seasonally adjusting the data accurately in the week of the Labor Day holiday."
In other words: "fudging" or "massaging" or "manipulating" the data.

With these horrendous numbers it will make Janet Yellen's job that much more difficult: jobs, she says, are a bigger concern than inflation. [Later. About an hour after writing this entry, I came across this story: this chart is why Janet Yellen doesn't want to raise rates. How coincidental, or prescient.There is no graph at the present, but here is the narrative: Wages as a percent of GDP remain near multidecade lows, and until this trend shows any sign of improvement, Gundlach doesn't think that Yellen will want to do anything with interest rates.]

This certainly seems to suggest last week's overall unemployment numbers were very accurate -- the ones that no one could believe.

Finally, CNBC is talking directly about the 800-pound gorilla. An Obama mouthpiece, CNBC is reporting: it's all about ObamaCare. The soundbite that most analysts will take from this story: it's all about ObamaCare, and it's prominently mentioned in the article, albeit near the end of the article.
DeLong said his health-care premiums have surged by 48 percent during the past year. While DeLong doesn't have to offer health insurance to his employees, he always has, and wants to continue to do so. 
So, the Affordable Care Act was to make health care less expensive: health-care premiums have surged 48% (the number varies but all agree that health-care premiums have surged for those who had health care insurance in 2010). 

You may recall that some pundits have said ObamaCare is working out very, very well. They fail to mention that almost all of ObamaCare was delayed/put on hold by the President himself. Folks who should know fail to remind us of that. But this article does:
President Barack Obama's signature legislation requires all business owners with at least 100 or more full-time workers to offer them government-approved insurance by the end of the open enrollment period on Feb. 15, 2015-or face a fine of $2,000 per worker, per year.
Those with 50 to 99 workers have some reprieve, until 2016, as the law's requirements were pushed back an additional year thanks to criticism from the small business community. NFIB economist Dunkelberg says his group's polling has shown health-care costs are the top concern for small companies during the past 25 years.
He delayed his own program by executive order and his party did not object.

And then the minimum wage:
For Ken Jarosch, owner of family-owned Jarosch Bakery in Elk Grove Village, Illinois, a big concern is minimum wage. Democratic Gov. Pat Quinn wants to raise the minimum wage to $10 an hour from its current $8.25. Obama has led the push to hike the federal minimum wage from $7.25 an hour to $10.10 an hour.
"That would increase our payroll by 5.5 percent, so I would have to raise my price by between 2 percent and 3 percent," Jarosch said. "My wait staff, sales clerks-they are high school kids. I can't see paying them more than $10 an hour right off the bat. I feel for those trying to raise families on $8.50 an hour, but we have to look at our interests."
Jarosch is also just below the full-time threshold for offering insurance to his workers, which is what is keeping him from creating new jobs.
I said that from the beginning: ObamaCare will limit hours for workers (29 hours is the threshold) and will limit number of employees small businesses will hire.

By the way, what color is the sky in the man's world? Yahoo!Finance is reporting:
That day [when the Fed raises interest rates] is coming as the U.S. economy, five years into its recovery, finally enjoys some robust job creation and seems to be on the cusp of real wage gains. As a result, the Fed is preparing to end its third iteration of bond-buying stimulus next month and is on track to raise rates sometime in early-to-mid 2015.

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