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I’ve been saying that I would believe in the recovery when I saw the unemployment rate turn around. In January it did. In fact, it surprised many economists who had been predicting a slight rise, probably based upon data which indicates that businesses shed 20 thousand jobs in the same month. The biggest drop in jobs was in construction, attributed to the weather, which is obviously temporary and that’s a good sign. An even better sign is the fact that manufacturing actually rose for the first time in two years.
Combine this with the fourth quarter expansion and you’ve got some good news finally. We’re still in deep though. Apparently the revised estimates of job losses since the beginning of the recession two years ago total 8.5 million. As most people realize, the unemployment rate is merely based on those receiving unemployment benefits, and do not include those whose benefits already expired nor those trying to enter the job market. Nor does it include those forced to work part time, although the average hours worked per week increased in January as well.
The 20 thousand jobs lost in the business sector will probably be revised in the black. The previous estimate for November was 4000 gained jobs, and that’s been revised to exceed 60,000. December did lose jobs however, which is kind of weird. And weirder still that retail jobs have increased since the holidays.
You can always count on Calculated Risk for the downside, and they’ve got it. This is apparently the worst recession since World War II, unless measured by unemployment rates which exceeded 10 percent in Reagan’s first two years. Consumer credit is way down.
Newly elected Scott Brown meanwhile chose the wrong day for a misstatement in his second day in office. He claims that the stimulus created zero (0) jobs. Most economists disagree, and in fact one economist interviewed on the Stephanie Miller Show this morning claimed the stimulus created or saved as many as 3.5 million jobs.
But there are troubles still brewing, particularly for California. On NPR this morning I heard a story about a Toyota plant in California about to close, which will directly sink 4700 jobs. The multiplier effect when considering the 1000 suppliers to that operation could be as high as 30,000 lost jobs.
Meanwhile even the liberals just don’t get it. Robert Reich’s Supercapitalism apparently speaks for the free market left, and he categorizes Americans into two groups: investors and consumers. Somehow the concept of a “producer” is missing from his nomenclature, and therefor fails to mention that Maytag, an iconic appliance manufacturer, hasn’t created a new manufacturing job since 1990. Nor does he really look at the “we’re all investors” meme – as if the union worker who has a pension in a mutual fund can be categorized with a Wall Street day trader in any meaningful way. To the free trade liberal it’s all about tweaking fiscal policy and credit, not much better than the seriously outdated Friedmanesque policies. The stimulus was not about restructuring the economy to facilitate the actual production of something, for all the talk of the new “green collar” movement. Without tariffs we will continue to hemorrhage manufacturing jobs until there is some sort of global equilibrium where all nations are synchronized third world countries with oligarchies. Unfortunately the tweakers have Obama’s ear, and even some of the normally more sensible progressives.
I guess at this point we have to answer the question of what the U.S. has to sell to the world besides military invasions, techno babbling consultants, and documentaries.
Addendum: Meanwhile, on the political front, Michael Steele is the gift to Democrats that just keeps giving. This one today:
Trust me, after taxes, a million dollars is not a lot of money.
Second addendum: Graphic from Pelosi’s office.