Wednesday, May 5, 2010

The economy enters positive jobs territory

ADP is now estimating that the private sector has been adding jobs, albeit not many—only 54,000, for the past three months. That's old news at this point, however, since the BLS establishment survey found about 150,000 new private sector jobs in the first quarter (government job gains are going to be misleading for awhile due to Census hiring). So the real question is how fast the economy will be creating new jobs going forward. The Bloomberg estimate for the jobs report this Friday says we'll see about 100K new private sector jobs. ADP is not quite so sanguine, but it has been underestimating job gains recently, so who knows? 


brodero said...

Go with the higher number for private sector numbers....

Stefano Bassi said...

Robert Reich

No Jobs Recovery

Friday, April 2, 2010

The US economy added 162,000 jobs in March. Great news until you look more closely. In March, the federal government began hiring census takers big time. These are six-month temp jobs, and they tell us nothing about underlying trends in the labor market. It’s hard to gauge precisely how many were hired — probably between 100,000 and 140,000, although some estimates put the hiring as low as 48,000. Almost a million census workers will need to be hired over the next few months. Subtract these, and today’s job numbers are good but nothing to write home about.

There are some positive signs. Manufacturing payrolls expanded a bit, heath care employers added 27,000 jobs, and about 40,000 private-sector temp jobs were added. But payrolls continue to be slashed in financial services and the information industry.

Two big things to bear in mind:

First, government spending on last year’s giant stimulus is still near its peak, and the Fed continues to hold down interest rates. Without these props, it’s far from clear we’d have any job growth at all.

Second, since the start of the Great Recession, the economy has lost 8.4 million jobs and failed to create another 2.7 million needed just to keep up with population growth. That means we’re more than 11 million in the hole right now. And that hole keeps deepening every month we fail to add at least 150,000 new jobs, again reflecting population growth.

A census-taking job is better than no job, but it’s no substitute for the real thing.

Bottom line: This is no jobs recovery.

Stefano Bassi said...

John Lounsbury

Employment May Never Recover

The DOL (U.S. Dept. of Labor) released surprisingly negative employment data for December. In November, the data surprised on the positive side. A moving average treatment of the data reaches conclusions which are unchanged from two months ago. My analysis of today's Employment Situation Report is now posted at

I used some unique second derivative analysis to project when employment will turn positive. Unfortunately, to return to 2007 employment levels, will require 290,000 job gains a month from late 2010 to late 2016.

To put this in perspective, the average monthly employment gains in the last recovery, from the beginning of 2003 to the end of 2007, were 146,000 per month. In the 1990's, from the end of 1991 to the employment peak in March, 2001, the average monthly gain in jobs was 154,000.

Of course, between now and 2040 there are likely to be several recessions. If the economic patterns of the past two decades are repeated, we will never again reach 2007 employment levels. This is illustrated by the following graph:

With an average job growth rate of 250,000 per month we return to the pre recession level of employment in nine years. With 200,000 per month job growth, we get there in 18 years. At 150,000, approximately the rate during the expansion periods of the 1990s and 2000s, we never regain previous employment levels.

This graph from shows what has happened to job creation during the past decade:

The total employment change (the chart shows only the payroll portion of employment) during the 10 year period was larger than the payrolls number, increasing 2.43%. This amounts to approximately 27,000 jobs per month. This number is not plotted on the first graph for obvious reasons - the lower range of the scale would expand dramatically with no added value to the discussion.

An article about a month ago discussed the "burden" of unemployment. This has led me to take on a project to determine how to relate employment to other factors in the business cycle. Some of the results of this project will be published in the coming weeks.

Stefano Bassi said...

Business Insider

Manufacturers Say Only 30% Of Their Lost Jobs Are Coming Back

da The Business Insider
di Vincent Fernando, CFA


The National Association for Manufacturers expects only 30% of the nearly 2 million manufacturing jobs lost during the recent downturn to come back.

Even this won't really start for another year they say. Their 30% forecast covers the next six years.


Most of the hiring will come in 2011 and 2012, David Huether, chief economist for the National Association of Manufacturers, said yesterday after NAM President John Engler spoke on a job-growth panel at the Milken Conference in Los Angeles.

“I wish there were a silver bullet where we just walk in and just sprinkle this pixie dust,” Ron Bloom, a conference panelist and senior White House adviser for manufacturing policy, said in an interview. “But this is slow, hard work.”


“The United States represents 21 percent of the world’s manufacturing output today and we’re still the world’s largest manufacturing economy,” Engler said in an interview. “We ought to be building on that.”

According to Bloomberg, research firm Global Insight forecasts that total U.S. employment (not just manufacturing) will return to its past peak of 138 million jobs not before 2013.

brodero said...

4 million new jobs over the next two years....Read 1983 CBO report
similarily bearish on jobs for 1983....we won't get 1983 but we are going to get better than expectations....

John said...


Robert Reich is a tenured professor. No skin in the game. He takes his bows when he is right and makes another forcast when he is wrong. Sorry, I pay virtually zero attention to such people.

I have often wondered what Mr. Loundsbury's agenda is. I never seem to see much optimism coming from him yet we have had quite good markets for over a year. Smart guy though.

It would be nice to know if some of these posters have any skin in the game. Are you guys short? If so, what? Are you long? If so, what? Cash buried in a super secret place? That's OK too. Just own up to where you have your stash. If not, then all I see is another political statement.

The Texans have a name for big talkers: Big hat, no cattle.

Stefano Bassi said...

1983 is a geological era
NOW is very different
There are two "little" new things named delocalization and globalization
This Big Crisis was an accelerator
and a very good pretext

You are too trapped in old schemes
like a mouse in a maze
In this way It's difficult to see beyond...

John said...


I see you are Italian. Nothing wrong with that. I like Italy. And Italians.

But maybe people in glass houses shouldn't throw rocks.

Stefano Bassi said...

Eh NO John
This in not a nice way to discuss...

Because I could answer to you:
the Subprime Crisis in "made in US"...
The extreme financialization of the economy is "US Patent"
and so on...

A You can answer to me
But We had saved the Italy from the nazi...
And our discussion will be dead in five minutes...

You must (if you want) answer in res like the Ancient Romans said...on the argument...

Do you think taht 1983 is equal to 2010?
Nothing is changed?
You can apply the same schemes to the present situation?
I Think not

I think that the US is a light in the world for many things
But you are on the path to become more and more similar to South America for many aspects
Reflect on this hypothesis
and Beware :-)

Yes...I Know...The Italy is almost similar to North Africa...but now we are speaking of the US

John said...


I have posted many times of my dismay at the deficits the US is running. And I agree with you that this is not 1983. However in my experience economic cycles can rhyme nicely. I put my money where my economic opinions lie. I see no such admission from you, thus I see it as an acedemic issue for you. That's fine, but if that is what it is, lets call it that. If you want a discussion with me, relate your views to an investment thesis. If not, to me its just another opinion.

I mean no disrespect in the above. I am sure you will find some willing to discuss acedemics with you.

Stefano Bassi said...

No problem John

Roger, over and out.

I disagree but I respect your categorical way of comparing different opinions.

Have a Good Day

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