Friday, January 04, 2013

Three to Read--December Jobs Report Edition

the Bureau of Labor Statistics has issued its December jobs report.  A wealth of news, good and bad can be found in these reports.  Given the massaging of formula and statistics, the redefinitions of "unemployed" and "underemployed" the BLS report, from a statistical standpoint is something to be taken with a grain of salt.  Of course, the big number 7.8% unemployment continues to haunt the Obama Administration and I suspect that lots of massaging is taking place to keep that number under 8.0 percent, but that is a rant for another day.

Hinting at Good News?
Mark J. Perry of the American Enterprise Institute (not one of President Obama's biggest fans by any stretch, does find some good news in the report.
Bottom line: As reflected in today’s employment report, three of the strongest sectors of the U.S. economy continue to be manufacturing (including motor vehicles), housing (construction) and energy (oil and gas drilling).  Looking forward, we can expect ongoing expansion in output and jobs from those three engines of U.S. economic growth in 2013.
Good news indeed.  These sectors tend to produce significant upstream and downstream employment.  The largest question remaining for me is how much of this growth is private sector versus public sector driven?

The More Things Stay the Same
Of course, most commentators from the right are not happy with the report.  As Rick Moran noted:
The best that can be said is that the jobs outlook isn't getting any worse. Of course, it's not getting any better either so there you have it; the perfect encapsulation of the Obama presidency.
Moran has pretty good reason to be less than thrilled.  From the BLS report itself:

Among the major worker groups, the unemployment rates for adult women (7.3 percent) and blacks (14.0 percent) edged up in December, while the rates for adult men (7.2 percent), teenagers (23.5 percent), whites (6.9 percent), and Hispanics (9.6 percent) showed little or no change. The jobless rate for Asians was 6.6 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.) 
In December, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 4.8 million and accounted for 39.1 percent of the unemployed. (See table A-12.)
I love that phrase, "essentially unchanged."  The adverb, being redundant, does not help the President in anyway.  Those numbers are quite painful to look at, particularly among blacks and young people.

Still the Unknown
Doug Mataconis at Outside the Beltway has probably the best summary of all:
At this point, it’s difficult to know what’s going to prime the jobs engine. At the very least, continued business uncertainty over what the heck Washington is going to do on issues ranging from the debt ceiling to the budget isn’t helping the situation, but there seem to be other issues at play here. Despite the Obama Administration’s promises, health care costs, and most importantly the cost of health care insurance for employers, continue to rise across the board. If that continues to occur, the marginal cost of each new employee rises and it becomes less advantageous for an employer to engage in new hiring than to use their existing work force to meet existing needs. It also appears that many employers are cutting back on full-time employment in favor of part-time labor. Again, motivated in no small part to the requirements of the new health care laws. Unless these and other incentives change, I don’t see employers revving up the jobs engine any time soon.
This may be the the most clear cut example of what is really happening.  The fact is that some sectors are recovering, but across the board there are lots of unknowns and frankly unknowables.  I believe a great deal of uncertainty stems from the fact that Congress keeps kicking the can down the road, first with the "fiscal cliff" and now with spending cuts.  The truth is, the lack of resolution of major political problems is what may very well be holding this country back.

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