Jobs: That Lagging Indicator

http://economix.blogs.nytimes.com/2011/01/07/painfully-slow-jobs-progress/?nl=todaysheadlines&emc=tha2

http://www.nytimes.com/2011/01/08/business/economy/08jobs.html?nl=todaysheadlines&emc=tha2

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"We have to pass the (health care) bill so you can find out what is in it." (Nancy Pelosi - speech to National Association of Counties, 3/9/10 - Yale: Top 10 Quotes in 2010)

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So, how does 2037 sound? No, that's not a "retirement date." That's the date that Adam Hersh (an economist with the Center for American Progress) recently calculated when, at the current pace, the nation would regain the number of jobs lost during the great recession.

David Leonhardt's chart ("Economix" Blog - click on "Painfully Slow Jobs Progress" attached) shows the three month average change in employment, going back to the start of the recession. Yesterday's employment report continued to to show "recovery" (barely).

But the PACE of recovery is barely fast enough to keep up with population growth. Over the last three months, the economy has added an average of 130,000 jobs per month. If that pace picked up to 200,000 jobs per month, almost 10 years would have to pass before the unemployment rate fell below 6%. If the pace picked up to 250,000 per month - roughly what it was in the late 1990s (controlling for population size) - five more years would have to pass.

Within the "Economix" blog, we continue to watch the monthly updates on their "Comparing Recoveries: Job Changes" posts. The color trend lines tell a very bleak story from, really, the first decade of the 21st century. The most recent recession/recovery trend line (prior to our current disaster) actually is represented as 2001 thru 2005 (the so-called "jobless recovery" period) - that basically covers the first half of the last 10 years. Then, of course, we have the last 5 years which include the worst recession since the Great Depression which we are in "recovery" from. This period is such a disaster that it's trend line doesn't even look like it belongs with the others (and, it doesn't).

So, we should feel good about what? That we're not actually in a "Depression?"

Larry Ellison feels great! One of the richest men in the world, his company (Oracle) makes productivity improvement software (among other things) that makes it possible for CEOs to avoid hiring (or hiring back) staff. He bought Sun Microsystems when they lost their way and then he bought Mark Hurd when HP fired him so that he can figure out how to compete with (and, perhaps eventually buy) that company.

Good for Larry but bad for the average educated U.S. citizen. We can't all be software engineers.

The current data analysis of job gains and losses by sector (BLS) shows the following sectors up:

* Mining and Logging

* Manufacturing

* Trade, transportation and utilities

* Financial activities (now, there's a category)

* Professional/business services (significantly)

* Education/health services (significantly)

For the long term, economists see hopeful signs. Some say that, in retrospect, the recovery of early last year was a false spring, reflecting only the bounce-back from the deep hole that was 2009. According to this view, real signs of recovery, including a pickup in shipping and manufacturing took hold last fall.

Let's hope that's right.

Daniel Alpert (Managing Partner at Westwood Capital) points to a disturbing factor in yesterday's report: "We're seeing what appears to be evidence of structural unemployment among those in the prime, higher earning 35 to 40 year old demographic, where unemployment actually increased in December.

Let's hope that's wrong.