U.S. Economy Adds 227K Jobs In February; Unemployment At 8.3%

[one...two...tree 2,762]

The U.S. economy added 227,000 jobs in February, according to the Labor Department. The unemployment rate remained unchanged at 8.3 percent.

December's jobs numbers were revised up to 223,000 from 203,000. And January's numbers were revised to 284,000 from 243,000.

In February, the health care industry, food services and manufacturing fared well.

[Obama 2012 1,714]

Why are you smiling? Unemployment was 6.8% in Nov. 2008.....

Unemployment rate is going down on hopes this is Obama's last year in office

[luckytxn 2,265]

Why are you smiling? Unemployment was 6.8% in Nov. 2008.....

Unemployment rate is going down on hopes this is Obama's last year in office

Maybe the record deficit spending last month had something to do with this good news.

[Obama 2012 1,714]

Maybe the record deficit spending last month had something to do with this good news.

shhhhhh don't point out things like that, you're making the Feds and Obama look bad!

[aaydrian 479]

Let me ask you guys, which GOP candidate do you think is best to tackle the problem(s) of the economy? And please just don't tell me anyone is better than Obama.

[luckytxn 2,265]

shhhhhh don't point out things like that, you're making the Feds and Obama look bad!

I'm a rebel.

[Obama 2012 1,714]

Let me ask you guys, which GOP candidate do you think is best to tackle the problem(s) of the economy? And please just don't tell me anyone is better than Obama.

Ron Paul is the best fitted.

Other than that, the rest are no better than Obama at the end of the day.

Not even Gingrich can make the claim that he's better. Gingrich's Republicans attempted to spend quite a bit of money (well at least pork anyway) but Clinton had the line item Veto up until a certain Republican Mayor in NYC sued him...

[aaydrian 479]

Ron Paul is the best fitted.

Other than that, the rest are no better than Obama at the end of the day.

Not even Gingrich can make the claim that he's better. Gingrich's Republicans attempted to spend quite a bit of money (well at least pork anyway) but Clinton had the line item Veto up until a certain Republican Mayor in NYC sued him...

I was thinking along those lines. Newt I don't want to even think about, Rick I don't think I am interested in hearing from and Mitt is identical to the 'T' to Obama so he shouldn't even have been in the race (don't know which inconsistent disillusioned Republican is voting for him).

Ron apart from his gold talk seems pretty descent but his age is working against him. If only he was much younger and 'better looking' while maintaining his ideology, he would have been doing much better.

[Mr. Big Dog 10,747]

Stimulus Is Maligned, but Options Were Few

By EDUARDO PORTER

Published: February 28, 2012

It was the winter of 2009 and the United States economy was shrinking. In the last three months of 2008 the economy had contracted at an annual rate of 8.9 percent, the sharpest decline in more than half a century. It shrank at a 6.9 percent rate the next quarter. By February 2009 the country had lost more than five million jobs.

We know what President Obama did. In February, he pushed Congress to pass the American Recovery and Reinvestment Act, an $831 billion fiscal stimulus package aimed at creating demand for goods and services to reignite growth and stop the downward spiral.

Only three Republican senators voted for the bill — Susan Collins, Olympia Snowe and Arlen Specter (who as a result of the vote had to change parties). Since then, Republicans have condemned the legislation as an unmitigated disaster. “These policies have made our economic woes worse,” the House speaker, John Boehner, wrote earlier this month on the third anniversary of the bill’s enactment. They “left millions of Americans out of work and made the future of job-crushing debt even more daunting for our children and grandchildren.”

The attack hardly fits an economy that appears finally to be gathering steam. By the end of last year the economy had recovered to its peak size in 2007, before the recession. Employment is growing at a steady, though modest, clip. The jobless rate is 8.3 percent, down from 10 percent at its peak in October 2009.

Perhaps more intriguingly, the Boehner attack suggests a question: Were there other plausible choices? And would they have fixed the economy sooner?”

Around the world, governments were trying to stimulate their economies at the time — on the right as well as on the left, totalitarian autocracies and parliamentary democracies. By early 2009, China had announced stimulus policies amounting to 4.8 percent of its gross domestic product. The austere Germans put in place measures worth about 3.4 percent of their G.D.P. to bolster flagging demand. A study published by the New York Fed found the average fiscal stimulus in a group of some 40 developed and developing countries was slightly less than 3 percent of national output.

There were alternatives. After an initial experiment with government stimulus in 2009, many European countries reversed course and slashed their budgets to try to restore fiscal balance, in the expectation that this would reassure businesses and investors that government finances were under control, and give them the confidence to invest and bolster the economy. But so far, these policies have proved to be an unmitigated disaster.

Britain — which has its own currency and enjoys low interest rates — offers perhaps the best parallel to the United States. In 2010 the coalition government of David Cameron came into office promising to undo the stimulus policies of its predecessor. It cut spending across the board, asking government departments to slash budgets by 25 to 40 percent. And it shot Britain’s incipient economic recovery in the foot.

By the end of last year the British economy was still 4 percent smaller than it was before the recession started four years earlier. And it is expected to contract a little more this year. Even after budget cuts, the government’s debt is bigger, compared with the size of the economy, than when Mr. Cameron took office.

By comparison, despite criticism of its size and composition by both the right and the left, the stimulus by the Obama administration did add to jobs and growth. The nonpartisan Congressional Budget Office estimates it will have contributed at least 1.6 million jobs and perhaps as many as 8.4 million by 2013.

This month, the Booth School of Business at the University of Chicago surveyed a panel of economic experts of different political persuasions about the impact of the president’s stimulus package: eight out of 10 said it had contributed to lower unemployment by the end of 2010. There was less consensus on whether its benefits would exceed its long-term costs, including higher taxes to pay for the spending. Still, when asked if the policy was worth it, four times as many economists agreed as disagreed.

Regarding the children crushed by debt, no plausible economic strategy would have kept the budget deficit from mushrooming. President Obama’s fiscal stimulus package of February 2009 cost the equivalent of about 5 percent of the nation’s yearly output, most of which was spent over four years. Wrapping in other attempts by the Obama administration to ignite demand — from the payroll tax cut and extended unemployment assistance to the “cash for clunkers” program to encourage drivers to buy a fuel-efficient car — the cost rises to some $1.25 trillion, which amounts, on average, to about 2.1 percent of the nation’s annual output from 2009 through 2012.

While this is not cheap, it accounts for a small share of the budget deficit, which topped 10 percent of the country’s G.D.P. in 2009 and remained at 8.7 percent last year, swollen by plummeting tax revenue and mandatory expenditures as the country sank into recession and unemployment surged.

Kenneth Rogoff, a professor of economics at Harvard who has written extensively about financial crises and their aftermath, says he thinks it unlikely that an alternative path would have delivered a much better outcome. Given the heavy debt burden on American families, he says the pattern of low and volatile growth and the growing deficit “would have happened under anyone.”

For sure, Republicans would have calibrated economic stimulus differently — heavier on tax cuts and lighter on government spending. A Republican stimulus in 2009 might have been smaller; more focused on tax cuts and incentives for investment by business with less emphasis on extended unemployment insurance or transfers for struggling states.

These differences are not trivial. Chances are, the package would have delivered less bang for the buck. Most economists say they believe that tax cuts and rebates would have been less likely to generate new sales than direct government spending, because households swamped by debt were likely to save their windfall.

But it is easy to forget that Mr. Obama’s stimulus wasn’t the first. In early 2008 George W. Bush pushed a $170 billion package to prop up an economy already shrinking as the housing bubble deflated. The Bush administration also drafted the first $17.4 billion tranche of the bailout for General Motors and Chrysler, which is now maligned by the campaign of Mitt Romney as “crony capitalism on a grand scale.” Had John McCain rather than Barack Obama followed, chances are he would have opted to continue along that path.

Mr. Rogoff — an accomplished chess player — explains that there is a term in chess called an “only move,” a move forced by circumstance — the only one available to avoid immediate defeat. The Obama administration’s efforts to stimulate the sagging economy, he says, fit that description. It is unlikely that Republicans would have done much differently.

Republicans on the campaign trail are now vowing to undo President Obama’s economic strategy, which they claim has done so much damage to the American economy, and return the country to immediate austerity. Mr. Romney, for instance, promises to reduce federal spending to 20 percent of the nation’s output by 2016, down from about 24 percent today.

But it’s hard to tell whether to believe this embrace of frugality. Responding to a question about the deficit during a campaign speech in Michigan last week, Mr. Romney pointed out: “if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy, so you have to create at the same time pro-growth tax policies.”

To figure out what his pro-growth policies might consist of, it’s useful to turn to his track record as governor of Massachusetts: in 2005 Mr. Romney proposed a $600 million stimulus package to create 20,000 jobs over five years, at a cost of $30,000 a job. That sounds familiar.

[peejay 327]

Official unemployment rate doesn't tell the whole story

by Chris Versace

Posted 03/08/2012 ET

Updated 03/08/2012 ET

On Friday, the government is scheduled to report America’s February unemployment rate. Over the past few months, the official employment statistics furnished by The Bureau of Labor Statistics have portrayed an improving jobs picture with 0.9 million jobs added over the September to January period and a decline in the unemployment rate to 8.3 percent in January from 9 percent in September.

As I say in my PowerTrend investment newsletters, I never base my decisions on either a single data point or data solely from one source. Rather, I find it better to compare and contrast data from a number of sources to get a sense for what is really going on. If we do that, we find that not everyone agrees with the official national unemployment rate.

But questionable federal data is far from new news -- consider the emphasis on the core consumer price index as an inflation barometer, even though it excludes food and energy, which account for more than 17 percent of a person’s average annual expenditures on a combined basis, according to U.S. Department of Labor data.

The Congressional Budget Office last month (Feb. 16) released its own study on the unemployment situation and its findings reminded us that the unemployment rate has exceeded 8 percent since Feb. 2009. The nonpartisan group forecasts the official unemployment rate will remain above 8 percent through 2014, chiefly because of weak demand for goods and services, coupled with a growing mismatch between employer needs and worker skill sets.

Unlike the official government unemployment rate that only focuses on whether a person is employed or not, the CBO rightly recognized that there are millions of Americans that either have to make do with part-time work rather than full-time employment or would like to work but have not searched for a job in the last four-week period. When this group, more commonly referred to as the underemployed, is factored into the unemployment calculation, the CBO found January’s real unemployment rate stood at 15 percent, not 8.3 percent.

What makes this situation even worse is the share of unemployed people looking for work for more than six months. That segment -- the long-term unemployed -- topped 40 percent of all those unemployed in December 2009 and has remained above it since.

This methodology of including the underemployed is practiced by a number of third-party firms, such as Gallup, that perform their own monthly unemployment evaluations. In January, Gallup found the percentage of U.S. employees who are working part time but want full-time work stood at 10.1 percent while the number of unemployed stood at 8.6 percent. Add those together and we find the total underemployed and unemployed stood at 18.7 percent in January, which was up from 18.3 percent in December. Not only is the magnitude of the data far different but the direction is also different from that from the Bureau of Labor Statistics.

While many are anticipating Friday’s official February employment report, Gallup has already released its findings for the month. For the 29 days of February, Gallup finds 64.4 percent of its respondents are employed full time while 9.1 percent are unemployed and the combined unemployed and underemployed climbed to 19.1 percent. Payroll processing firm Intuit shared that small businesses added fewer jobs in February than January and the average workweek was little changed at 25 hours. The last time I checked, 25 hours per week was considered part-time.

Intuit’s findings confirm expectations for slower nonfarm private payroll growth in February. While some will quickly point to the month over month improvement depicted by ADP’s take on non-farm job growth in February, some quick analysis using ADP’s data reveals the number of jobs created in the first two months of 2012 fell compared to 2011. For the first two months of 2011, ADP’s findings showed 406,000 non-farm jobs were created compared to 389,000 for the first two months of this year - a contraction of more than 4 percent. Turning to February’s Challenger Job Cuts Report, we find the pace of planned layoffs year to date is up 18 percent over last year, with 105,214 job cuts announced through the first two months, compared to 89,221 during the same period in 2011.

Economists consider unemployment to be a lagging indicator of future economic growth. So, how is job formation, a leading indicator, going? The one-month results aren’t encouraging. Economists and academics are predicting February added 210,000-220,000 jobs compared to 257,000 added in January. As we inch closer to that Friday report, we’ll see the February employment report from the nation’s large payroll processor, ADP, as well as the Challenger Job Cuts report. The latter showed a 28 percent increase in planned job cuts in January from December. For my money, I’ll be watching the labor participation rate, which has been the key driver behind the falling unemployment rate as more people exit the workforce or decide to take a break from searching for work.

All in all, I find it pretty hard for anyone to argue that the unemployment rate has fallen when more than 1.7 million people have exited the labor force for the 12 months ending Jan. 31 and the number of people who are not in the labor force who want a job remained essentially unchanged over that 12-month period.

Politicians may try to distort the facts to suit their own agenda, but the facts are still the facts.

http://www.humanevents.com/article.php?print=yes&id=50046