Updates
October 4, 2015:
the WSJ weighs in.
The labor market is supposed to be the strong point of this
underwhelming U.S. economic recovery, so Friday’s weak jobs report for
September came as a jolt to investors and perhaps to the Federal
Reserve. The question is whether this is another slow patch of the kind
we’ve seen so often during this expansion, or a signal of something
worse.
It’s certainly hard to find much good news in the
September numbers. Employers added 142,00 net new jobs, but only 118,000
in the private economy. Payrolls were revised lower by 59,000 for July
and August, for a monthly average of only 167,000 in the third quarter.
That’s down from a monthly average of 198,000 for all of 2015 so far,
which is down from 260,000 a month in 2014.
If the economy is slowing down, don’t expect much help from the rest
of Washington. In their blog post on Friday, the White House economists
said “we must take steps to continue the domestic momentum that the U.S.
economy has enjoyed in the last several years. That includes passing a
budget that reverses the sequester and makes critical investments that
help our economy continue to grow, reauthorizing the Ex-Im Bank so that
our businesses can compete on a level-playing field abroad, and
increasing investments in infrastructure.”
Is that all there is?
Revive a loan-guarantee bank and spend more on roads and bridges?
Really? This White House is either intellectually tapped out, or too
partisan even to consider Republican growth ideas such as tax and
regulatory reform. This week the Administration piled another costly
rule on the economy to limit ozone in the atmosphere, even though only
parts of California are in serious breach of current U.S. standards.
October 3, 2015:
from CNBC, the joke for the day --
Obama said that although the long-term trend of job creation was positive, even more jobs could be created if "we didn't have to keep dealing with unnecessary crises in Congress every few months."
He called the Friday jobs report "good news" but also said that U.S. growth could slow if Congress does not take action.
Ignoring the global situation, within the US, the number one reason for job stagnation and poor economy is traced back to President Obama: war on coal; EPA (perhaps biggest job destroyer); ObamaCare (competes with EPA for bragging rights to be biggest job destroyer); minimum wage requirements for federal contractors; open borders (competes with EPA and ObamaCare for bragging rights). Killing Keystone XL says it all. Continuing the ban on crude oil exports will be the "new Keystone."
October 3, 2015:
Rigzone is reporting:
U.S. jobs in mining declined for the ninth consecutive month, since peaking in December 2014. According to the September jobs report released Friday by the Bureau of Labor Statistics, 10,300 mining jobs were lost in September, with support activities for mining decreasing by 7,200. Jobs in oil and gas extraction declined by 1,100. These figures are seasonally adjusted.
October 3, 2015: two stories on yesterday's abysmal jobs report.
Los Angeles Times front-page headline stating that yesterday's jobs report "had not one kernal of good news in it" has been removed, but
the story is still out there, with a new headline, blaming it on "global woes."
The Labor Department said Friday that the U.S. economy added 142,000 net
new jobs last month, well short of analyst expectations.
On top of that, job gains in July and August surprisingly were
lowered by a combined 59,000 positions while average hourly wages fell
for the first time since last year.
Although the unemployment rate
in September held steady at 5.1%, the lowest since 2008, it was mainly
because about 350,000 people dropped out of the civilian labor force.
The percentage of adults either employed or actively looking for work
declined to just 62.4% last month, the lowest since 1977.
“There is no sugar-coating this report,” said John
Canally, chief economic strategist at LPL Financial, a brokerage and
investment advisory firm. “If you're the most bullish person in the
world, you can't find one kernel of good news in it.”
Look at the graph:
Under "normal" conditions, the "magic number" is 200,000. Economists suggest that creating less than 200,000 jobs in any given month is a sign of stagnation. Shortly after Obama took office,
Reuters moved the goal posts, suggesting the number was 125,000.
This is what grabs my attention in the graph above. Except for that one spike to 500,00 in early 2010, the monthly numbers pretty much mirrored what was going on before the huge 2008 - 20110 debacle. The drop between 2008 and 2010 is incredible. It would have taken a huge jump in job creation to offset that loss of jobs. And then the spike in early 2010 was follow by four months of "negative" job growth. After that, there are clearly way more months below 200,000 than above that threshold.
Then this.
Reuters is moving the goalposts again.
Reuters now suggests that the Goldilocks number for jobs growth is ...
100,000. That is such an incredible article, I'm going to post it as
a stand-alone post, and then simply link it here.
Original Post
Remember: this is the month, this is the deadline -- October, 2015, that all companies with more than 50 employees were required to enroll in ObamaCare. I don't watch network television, but I am being told that CNBC has not connected that dot: employers saw the October, 2015, deadline, and quit hiring starting in July, August, September --- it's not just the health care costs (many companies probably provided health care for their employees) but the paperwork / compliance required would have absolutely scared many companies with less then 45 employees -- even if they could use the extra bodies, it wasn't worth the government intrusion.
This mandate by the way was delayed two or three years (I forget which); blogged previously. This was all expected, forecast, predicted. This is not rocket science.
Comment from the ethernet: Recession is when your neighbor loses his job. Depression is when you lose your job. Recovery is when Obama loses his job.
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Tweeting now:
August jobs number revised from 173,00 to 136,000, making combined number of new jobs for July and August 59,000 less than previously reported - @BLS_gov.
If you add up the last three months, the number is 120,000.
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For the archives, these are the Drudge "headlines":
- record 94,610,000 Americans not in labor force -- that's 94 million with a sad face
- participation rate lowest since 1977
- record 56 million women not working
- "Payrolls disaster"
- "Fed never going to raise rates"
- It's ugly
- Flashback: it's going to be great
- Market at "panic levels"
************************************
If You're Wondering Why The Stock Market Tanked Today
CNBC reports:
US created 142K jobs in Sept vs 203K expected.
The U.S. economy created 142,000 jobs in September, a number that missed
expectations and could cool expectations that the Federal Reserve will
start raising interest rates soon.
But the news gets even worse. Remember that slightly "good" number last month everyone crowed about -- 173,000 jobs. Wrong. Turns out it was a paltry 136,000.
Economists had been expecting the report to show 203,000 new jobs, from
the downwardly revised 136,000 in August (from the originally reported
173,000).
Which, of course, raises the issue again: how was the government off by so much -- a "136,000" number is so incredibly bad, I assume the White House told the Labor Department to re-check the math, and they pulled "173,000" out of thin air.
These are not projections. These are actual counts. The only way one could be so far off (173,000 reported vs 136,000 revised) suggests a) deliberate massaging of the data; b) purposely double-counting numbers in California.
Prior to the Obama administration, these were the "magic numbers":
The Magic Numbers
First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
New jobs: 200,000 (< 200,000 new jobs: economic stagnation)
After the Obama administration starting reporting jobless numbers,
Reuters moved the goalposts:
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters.
I can't make this stuff up.
These are atrocious numbers.
173,000 - 136,000 / 173,000 = 21%.
Imagine if the September numbers are revised downward by 21% --> a
revised 112,180.
And then this:
The unemployment rate has been declining steadily, but that has come in
significant part due to the lowest labor force participation rate since
the late 1970s.
Since all the pundits are telling us the economy is recovering, I can only assume employers are not creating more jobs because they cannot afford the costs associated with ObamaCare.
Oh, completely missed this. How could this month's projections be so far off. Economists had expected 203,000 new jobs; in fact, only 142,000 (which could be revised downward to 112,000): 203,000 - 142,000 = 61/203 = a whopping 30%. Or another way, 142,000/203,000 is 70% of what was forecast. Wow.
These must be the same guys and gals putting together Obama's Syrian strategy.
Here's how Reuters spins it:
Good morning and welcome to the August jobs report live blog! The economy added 142,000 jobs in August — a far cry from the 225,000 expected — and the unemployment rate ticked down to 6.1%. The release from the Bureau of Labor Statistics is here.
Wow, it's even worse.
Reuters expectation was 225,000.
Reuters can't believe the numbers. They say it was a miscount and that the number will
likely be revised upward. Of course it will. Right now Mr Obama is on the phone talking to the Labor Department to do a recount, and this time, count the "hanging chads" as new jobs.
And someone has the unemployment story wrong.
CNBC said the unemployment rate held steady at 5.1%.
Reuters said they expected the unemployment rate to tick down to 6.1%.
Lucia: get your facts straight. I can only assume she was so flabbergasted by the number she couldn't think straight.
As noted above,
Reuters thinks the number was wrong and that it will be revised upward.
Over at Bloomberg, this quote:
“We’re seeing some weakness in some of the manufacturing numbers earlier in the week,” said Joseph
Betlej, who helps oversee $33 billion as vice president of Advantus
Capital Management. “That was causing me some concern. Seeing the
confirmation with payroll is a disappointment. I think it’s really going
to cause people to second guess the strength of the economy.”
Some folks don't need to second-guess the strength of the economy. It's pretty apparent.
Seven years into the recovery and a gazillion dollars in stimulus and the Russians are bombing indiscriminately in Syria. When does the current administration come to an end? Fifteen more months of this.
By the way, for those who have not been paying attention, first-time unemployment claims surged 10,000 in the most recent report (yesterday). Mainstream media blew it off; saying it was simply background noise.
The background noise seems to be getting louder.
