JONATHAN COHN MARCH 9, 2012
-
Read Later
READ LATERAvailable only to subscribers. SUBSCRIBE TODAY
-
Listen
ARTICLE AUDIO
- Font Size
Source: Overall job growth by month, red for Bush presidency and blue for Obama presidency, via Steve Benen at Maddowblog.
So when do we start calling it a recovery?
This morning's employment report from the Bureau of Labor Statistics shows that the economy added 227,000 jobs last month. The unemployment rate did not change: It's still 8.3 percent. But that is not surprising and that is not necessarily bad news. When the economy recovers from a downturn, people who left the workforce start coming back, so that the jobless rate itself won't decline (and may even increase) from time to time.
Meanwhile, BLS also revised last month's employment figures. In January, according to the report, the economy actually added 284,400 jobs, which is 40,000 more than BLS had estimated originally.
This is third month in a row that the economy has added at least 200,000 jobs. It's not ideal: At this rate, it will be many years before we regain all of the jobs that this recession destroyed. Far too many people are still struggling -- and, from the looks of things, many of them are going to keep struggling for some time. But the steady rise in employment, coupled with a small increase in wages and other underlying indicators, suggests a true recovery is under way.
But don't take it from me. Here, via e-mail, is Gary Burtless, the labor economist from Brookings:
The latest numbers look like a continuation of the strong job gains we’ve seen since late last summer. For the third month in a row the employer survey shows payroll increases exceeding 200,000. The household survey indicates an even more impressive performance. The number of respondents in that survey who say they hold a job increased 428,000 in February. Making an adjustment for the new population weights in January, employment gains in the household survey have averaged 388,000 a month since October. We need between 90,000 and 100,000 additional jobs every month to keep up with the growth in the working-age population. Job gains since last summer have comfortably exceeded that threshold. The unemployment rate was unchanged in February, not because employment progress slowed, but because working-age Americans were streaming back into the workforce. Almost a half million adults entered the labor force last month, a number that somewhat exceeded the impressive gains in employment. It’s hard to see any weakening of recent positive trends in the February jobs report. The trend is very much in the right direction, but we have a long way to go to get back to full employment.
Politically, this is obviously good news for the president and his party. The White House is too smart to take a victory lap: The possibility of slower growth later in the year, not to mention disruptive events in the Middle East or elsewhere, means future employment reports might not look so good.
But numbers like these put Obama in an awfully strong position to win reelection. And they should. Among other things, manufacturing jobs are on the rise again, many of them from the auto industry that Obama saved. The health care sector is still adding jobs, too: Apparently the industry knows something that Republicans don't about the "jobs-killing" Affordable Care Act.
Speaking of the opposition party, its members are doing their best to downplay the report. Kevin Brady, a GOP congressman from Texas and vice chairman of the Joint Economic Committe, says:
we still have a long way back to where we were before the last recession. ... I find it incredible that the Obama administration is attributing this all too slow increase in payroll jobs to its policies. ... A more accurate description of the economic news is that, any improvement that we are seeing is the result of the hard work of the American people and the resilience of the American economy, not from the administration’s policies, but in spite of them.
Taking note of this quote, Dartmouth economist Andrew Samwick quips on his blog
Shorter version? You are making inadequate progress getting us out of the hole we dug for you despite our opposition to every program you propose.
One final though: For the last year, a persistent drag on the economy has been downsizing in the public sector. Once money from the Recovery Act dried up, local and state governments started laying off workers, which in addition to reducing the availability and quality of public services removed jobs from the economy even as the private sector was adding them. That seems finally to have ended. As Business Insider observes, state and local governments actually added 1,000 jobs last month.
It's nothing compared to the number of public sector jobs that vanished in the last year. And, as Yahoo's Dan Gross points out, public sector jobs account for a slightly smaller percentage of the workforce than they did at the beginning of Obama's presidency. But something tells me that won't stop Republicans from screaming about socialism.
Update: David Leonhardt makes the case for some pessimism.
follow me on twitter @CitizenCohn
37 comments
Can we say recovery yet? Only in quiet rooms.
- chaitless
March 9, 2012 at 10:04am
Democrats are impressive at steady economic growth. It doesn't come at breakneck rates like China, or even Clinton, but it comes steadily. Clinton's breakneck growth, of course, was crushed by 9/11 and then Bush boom-bust tax cuts. The pitiful capital gains rate, which does nothing for innovation, nothing for job growth, but everything for shooting a gigantic hole in our deficit, seriously needs to be debated. Obama can stand up for venture capital, insurance investments, pension funds and endowments that are the heart of innovation and tout his transformative transportation bill as well as the infrastructure bank and his exports initiative. Just scream about it. Don't waver. And point to the clean energy success stories in blue and red states. Jan Brewer rolls out the mat for solar, and Texas (Austin in particular) is a clean-tech mecca, and that industry should know who their ally is. These high gas prices justify this switch to ending the tyranny of oil. Over half the land leased to oil companies in this country remains undeveloped, so these quick-fix oil drilling projects in ANWR and Keystone are beyond false, and i'm proud of this President for standing up to the Republicans. I am going to be even more proud when they lose their majority in the House, and we gain Senate seats to 55 or even more. The states and local govts will also go Democratic big time, and we will see a transformative Presidency (like it hasn't already been one!) that will be a nail in the coffin for conservatives....at least until they sweep to power in 2014.
- RedState
March 9, 2012 at 10:52am
Democrats are impressive at steady economic growth. It doesn't come at breakneck rates like China, or even Clinton, but it comes steadily. Clinton's breakneck growth, of course, was crushed by 9/11 and then Bush boom-bust tax cuts. The pitiful capital gains rate, which does nothing for innovation, nothing for job growth, but everything for shooting a gigantic hole in our deficit, seriously needs to be debated. Obama can stand up for venture capital, insurance investments, pension funds and endowments that are the heart of innovation and tout his transformative transportation bill as well as the infrastructure bank and his exports initiative. Just scream about it. Don't waver. And point to the clean energy success stories in blue and red states. Jan Brewer rolls out the mat for solar, and Texas (Austin in particular) is a clean-tech mecca, and that industry should know who their ally is. These high gas prices justify this switch to ending the tyranny of oil. Over half the land leased to oil companies in this country remains undeveloped, so these quick-fix oil drilling projects in ANWR and Keystone are beyond false, and i'm proud of this President for standing up to the Republicans. I am going to be even more proud when they lose their majority in the House, and we gain Senate seats to 55 or even more. The states and local govts will also go Democratic big time, and we will see a transformative Presidency (like it hasn't already been one!) that will be a nail in the coffin for conservatives....at least until they sweep to power in 2014.
- RedState
March 9, 2012 at 10:52am
The audacity of that Kevin Brady quote is staggering. Good job, President Obama.
- maxhencke
March 9, 2012 at 11:03am
Liberals lie and facts die: The reason unemployment rate at 8.3 is because of severe drop in labor force participation. Facts here: http://research.stlouisfed.org/fred2/graph/?s[1][id]=CIVPART. If labor participation was as same rate when Obama took office -- unemployment at around 11%. And we actually lost jobs in both Jan and Feb -- before 'seasonal' adjustments. No doubt a mild winter playing havoc with adjustments So ---- economy actually losing jobs and unemployment rate distorted by steep decline in labor force participation ---- and liberals declare success. Stupid and unaware -- words liberals live by.
- mr_rationale
March 9, 2012 at 11:10am
A more accurate description of the economic news is that, the recession that we saw under Bush was the result of the laziness of the American people and the sluggishness of the American economy, not from the administration’s policies, but in spite of them. Those damn Americans, they get lazy under Republicans because they know Republicans are so awesome and they get scared and work hard under Democrats because they know Democrats suck.
- blackton
March 9, 2012 at 11:36am
I noticed that Rat himself ignores such simple things as demographics. Baby boomers are now retiring and illegal immigration is at an all time low, and Obama has deported more illegals than anyone, and here Rat is yelling that these illegals who are no longer not living in America are now not working in America. about 1.2 million illegals were deported, and millions more who would have come have not because of far tougher border enforcement and a tighter market. As most illegals are of working age only a fool like Rat would not realize if they are deported or don't come, coupled with baby boomers retiring would naturally lessen the percentage of the population that can compose the labor force would lessen. Willfully obtuse and brain damaged, typical Republican
- blackton
March 9, 2012 at 11:46am
sorry, who are no longer living in America Spanish allows double negatives and I am getting into that habit down here in Oaxaca. By the way, when I first moved here the train of death, the one that passes through this town, was full of illegals riding on the roof going toward the border. That number is a trickle.
- blackton
March 9, 2012 at 11:50am
and i would love to see the rat mans worming his way out of the basic demographics, he would just sputter, but I have a chart, a CHART, and it...it...it is a chart that if you just look at makes demmycats look bad, i mean....how can anyone actually analyze the breakdown of US population by age group...that is not fair. Me am Rat man. Me have chart. Based on past patterns of high rates of illegal immigration during clinton's terms (at nearly 850,000 per year) of all working age with our median age rising and illegals rate plummeting, I estimate that is fully over 2% less Rats chart shows it from a high of 67.2% down to 63.9%, therefore the labor force participation rate factored in with the unemployment rate being what it is and those numbers simply will not return to the high water mark it was under Clinton even at the rate it was under Clinton. Unless Rat is willing to let in a million young illegals a year. Just look at the numbers Rat.
- blackton
March 9, 2012 at 12:10pm
even at the low unemployment rate it was under Clinton. sorry about that. Anyway, I defy the rat man to show me how a society that has seen its median age increase more than 2 years from 2000 reaching an all time high with record numbers of elderly is supposed to have such a high participation rate.
- blackton
March 9, 2012 at 12:14pm
Mr. Rat - I know you don't believe it, but most of here try to be open-minded, and like to think that we can be persuaded by a reasonable argument. Speaking for myself, a reasonable argument may not change my views 180 degrees, but it will definitely influence them. Now, speaking on behalf of the vast majority of human beings, no one likes to be attacked. You know this in your own life - you and your fellow conservatives feel you're attacked constantly by liberals, and you don't like it. It's not just unpleasant, it also makes you bitter, and the more bitter you get, the less likely you are to listen to reason, preferring instead to lash out at a world that seems stacked against you at every turn. At some point, the bitterness overwhelms you, and you find yourself brimming with hate for a lot of people you don't even know. I know, I know, you're thinking "but liberals are worse." Well, if we are, then we're hurting ourselves, not you; your bitterness and hate are hurting you, not us. If I get drunk once a month and beat my wife, I'm better than someone who beats his wife twice a month, but I'm still in a pretty bad place. You're in a bad place - your hate diminishes anything decent you may have to add to the world, without weakening the parasites one iota. So, instead of spewing silly invective, use your superior brain to convince people you're right. It may not work, but telling someone he's an idiot for not agreeing with you definitely won't work. Or, you can continue to be amusing, in a sad way.
- GeoffG
March 9, 2012 at 1:02pm
Romney has a plan for unemployment in which he sees no downside. He will cut his taxes and keep cutting them until unemployment drops to 4%. This model was developed from years of successful business experience, where overall benefit accrues to the top level and actually trickles on top of itself.
- Nusholtz
March 9, 2012 at 1:38pm
GeoffG Are you trying to reason with Mr_rationale, as if it was a nickname he had earned?
- Nusholtz
March 9, 2012 at 3:30pm
Liberals lie, facts die -- Part II U.S. Unemployment Up in February Underemployment is 19.1%, up from 18.7% in January by Dennis Jacobe, Chief Economist PRINCETON, NJ -- U.S. unemployment, as measured by Gallup without seasonal adjustment, increased to 9.1% in February from 8.6% in January and 8.5% in December. The 0.5-percentage-point increase in February compared with January is the largest such month-to-month change Gallup has recorded in its not-seasonally adjusted measure since December 2010, when the rate rose 0.8 points to 9.6% from 8.8% in November. A year ago, Gallup recorded a February increase of 0.4 percentage points, to 10.3% from 9.9% in January 2011.
- mr_rationale
March 9, 2012 at 3:36pm
Nush - Dr. Phil commandeered my laptop. I don't know what got into him.
- GeoffG
March 9, 2012 at 3:49pm
My apologies for interrupting Mr. Rat, but back on topic… I appreciated the understated genius from Boehner on today’s job numbers announcement. Essentially, *It’s a tribute to the American spirit, no thanks to Obama and his best efforts to cripple businesses.* Straight outta the Marty P. playbook. www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/caveats-for-sure-but-us-jobs-recovery-under-way/article2364304/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2364304
- OkiSaru
March 9, 2012 at 3:53pm
Blackton --- So this is why you were exiled to Mexico -- too stupid to understand basic charts couple with limited math skills. Lets count the ways Blackton is wrong: 1. I don't have a chart, the Federal Reserves chart does 2. Illegal immigrants NOT counted in the labor participation survey. 3. Even if illegal were counted, 1.2Million only 0.7% of 154,871,000 labor force. 0.7% doesn't change conclusions 4. Demographics is a gradual process. Decrease in labor force doesn't just happen in two years. 5. A recovery should increase labor participation. Rationality wins again.
- mr_rationale
March 9, 2012 at 3:55pm
GeoffG -- interesting post. Question: Taking away my invective, do you agree or disagree with points?
- mr_rationale
March 9, 2012 at 4:02pm
WTF? The Chief Economist of Princeton NJ (sic) says adding 227,000 jobs raised the unemployment rate? Where to turn for facts?
- Robert Powell
March 9, 2012 at 4:07pm
chief economist of Gallup.com, he is: http://www.gallup.com/corporate/103183/dennis-jacobe.aspx
- mldarby
March 9, 2012 at 4:15pm
Rat is NOT rational.... BUT.. 225,000 jobs/month barely meets the number of new job seekers entering the economy per month in times of near-full employment. As calculated by Krugmann, DeLong, and many others-- full (~5% unemployment) employment at this latest rate takes about 7 years. Is that what satisfies anyone calling himself a Progressive? Or a supporter Keynesian economics and policies??
- drofnats1
March 9, 2012 at 4:45pm
GeoffG You did something I have never seen before: initiated a dialogue with Mr_Rationale. Usually, he's like a city pigeon. He lands. Craps. And flies off.
- Nusholtz
March 9, 2012 at 5:10pm
Mr. Rat - thanks for the response. I actually agree with your points insofar as you're trying to argue that the recovery is not nearly as robust as it should be. It's not. The Fed needs to take its employment mandate as seriously as it takes it takes its inflation mandate, and increase the money supply, and Congress should vote to fund a trillion or so dollars of infrastructure repair and upgrade, borrowing the money at negative interest rates. Then you'd have a recovery. If you can agree with that, you've made a new friend (who, by the way, has never worked for the government or academia, and has always contributed much more in taxes than he's sucked away from the producers, and most of that suckage was the mortgage interest deduction and deduction for the value of my employer-provided health insurance, which means I wasn't sucking from the other producers, but from the suckers, so that makes it okay, right?).
- GeoffG
March 9, 2012 at 5:24pm
Rationale, I think Andrew Samwick pretty much has you pegged.
From your very own article, Mr_Rationale:
- GSpinks
March 9, 2012 at 5:26pm
** 2. Illegal immigrants NOT counted in the labor participation survey. 3. Even if illegal were counted, 1.2Million only 0.7% of 154,871,000 labor force. 0.7% doesn't change conclusions ** The US is down to only 1.2 million illegals? Wow, sounds like a 90% decrease from a couple months ago. Those drones around the border are dominating. We ought to give the CBP & ICE a raise.
- Konstantin
March 9, 2012 at 11:27pm
mr_rat: "5. A recovery should increase labor participation." And it's doing so. Labor participation was up last month. http://econsnapshot.wordpress.com/2012/03/09/snapshot-the-employment-report-for-february-continued-job-growth-higher-particpation/ As for the use of seasonally adjusted numbers, if that's the way unemployment has been measured in the past by BLS then that's the way it should be measured now if we're going to have valid comparisons. The methodology has to be consistent, whatever measurement one chooses. Really, are there any numbers that might convince mr_rat that the economy really is improving? I swear that if Obama succeeded in negotiating world peace there are some people who would complain about how he put all the arms manufacturers out of business.
- dsimon
March 10, 2012 at 1:26am
Thank you Mr. President. Yes, job killing regulations - snore. Here in New York City, a dozen new high paying software firms have sprung up that specialize in guiding the finance industry (utterly destroyed by the lack of regulation) through Dodd-Frank. They not only create jobs in a burgeoning new industry (that and data mining, ugh), they help the main driver of the New York state economy rebuild on more solid, sustainable footing. These firms have provided good jobs to local graduates and helped to revive the real-estate market, the job market for plumbers, builders, fired finace people of all kinds, cabs, restaurants, etc. Both Bloomberg and Obama's (government sponsored) green development and retrofitting intiatives (yes Rat - your most fevered fantasies are TRUE. Here in Gotham, we have communist/socialist job killing finance billionare for a mayor!) have also created jobs, saving millions for corporations by creating more efficient buildings along the way. Yes, we have a long way to go unburying ourselves, but the sense of economic renewal in New York City (yep, 1 percenters do always recover first) is definately there. By the time Bush finally mercifully left office, this city was turning in to a ghost town - with yet another neighborhood shop closed every time I walked out the door. That has noticably changed in the last year. Mr. Cohn - I will say that the growth in health care sector jobs leaves me cold. Is this more layers of bureaucracy that need to be paid with those doubling premiums every year? Or is it really folks being put in place for the ACA? I would love to see a thread by you that explains the growth is this sector at a micro level.
- WandreyCer
March 10, 2012 at 9:44am
rat, again you simply don't have a clue. This is not a 2 year process, it is a ten year process. Did you even read your own chart? The high water mark was under Bill Clinton in 2000 then it went down under Bush, it recovered a little bit under the Bush bubble but was still a full percentage point below the high water mark. So how is it that the trillions of debt that Bush ran up, the huge tax cuts, and the massive housing bubble that he created and burst don't count and even with all of that the percentage went down. Do you really imagine that with housing being such a large part of the economy that it would turn around in 2 years? And you lied about illegal aliens. Outright lied. Here is the data directly from the survey itself: Are undocumented immigrants counted in the surveys? It is likely that the CES survey includes at least some undocumented immigrants. However, the establishment survey is not designed to identify the legal status of workers. Therefore, it is not possible to determine how many are counted in the survey. The household survey does include questions which identify the foreign and native born, but it does not include questions about the legal status of the foreign born. For more information on that survey, please see the Current Population Survey website. So the RAT man lied. He said that they are not counted, yet there is no method they use to determine the legality of the respondents. Irrationality loses again.
- blackton
March 10, 2012 at 12:08pm
Thanks to commentariat for clearing that up--we continue to have a recovery. Now, for the second term, let's kill the War on Drugs, withdraw most infantry units from Europe and Japan, make the tax code flatter and much simpler, means test all entitlements, and go to Mount Rushmore.
- Robert Powell
March 10, 2012 at 12:14pm
Aren't nearly half of these jobs part-time? Isn't that a concern?
- IggyPop
March 10, 2012 at 12:21pm
unemployment was 7.7% when Obama took office and falling at a huge rate. The Labor Force Participation Rate in January 2009 was 65.68% and by December 2011 the Labor Force Participation Rate had fallen to 63.96%. That is a difference of 1.72%. There has been a big jump in early retirement (and disability) and the aforementioned removal of 1.2 million and the still higher rate of unemployment, as I have mentioned way above, affects total employment. Add the higher rate of 8.3% and there we are. So I guess Rats point is that, again, the former illegal aliens who used to work in America are no longer working in America is bad.
- blackton
March 10, 2012 at 12:35pm
I'd second everything Robert has said, except flattening the tax code, which would obviously be regressive. But there's very little justification left in any western country for universal benefits.
- IggyPop
March 10, 2012 at 12:51pm
We can talk about what "flattening" really comes down to Iggy. In my view everyone should pay something just to keep the level of investment people have in surveilling their elected officials up. But I think all preferences (capitol gains, mortgage interest, manufacturing, agriculture, etc) should go, and that people paying sales, payroll, state, and local taxes should get credit for doing so. In my experience the trick is not so much what the rates are but what's actually being paid. Simpler and more transparent is always better.
- Robert Powell
March 10, 2012 at 1:04pm
All for simpler and more transparent Robert. I think we can all agree on that. I used to vote Labour all my life but voted as Right as I could in the last election because we have an obese, unproductive public service in our country. So, I've seen first hand, the regressive effect, entrenched vested interests can have on our national public life. In that respect, I've come to realize that reactionary forces can also be found in nominally progressive organizations, such as public service unions. In saying that, any changes to any tax code anywhere has to incorporate as a core principle, the element of "ability to pay". Poll taxes are not the way forward. I don't think that's what you're calling for but flat taxes in principle often means the weakest carry the greatest burden. Means testing benefits and greater accountability and productivity in the public service in general should get a higher priority in my view.
- IggyPop
March 10, 2012 at 1:35pm
Substantial agreement as usual Mr. Ig. With regard to the weakest carrying most of the burden, seems to me the usual situation. But we don't have to make matters worse. Credit for payroll, state and local taxes, the earned income credits, etc can help. We're in for a new social contract, complete with a budget that actually pays for it. It will help if we can weed the garden a bit in terms of political jargon though. Here in the States many people think liberals are socialists, liberals aren't sure themselves if they're really progressives, most think libertarians are conservatives, reactionary forces exist in every vested interest--we need a new taxonomy too.
- Robert Powell
March 11, 2012 at 5:02pm
Robert Powell: we need a new taxonomy too. As long as we get some revenue from it to help us balance the budget.
- skahn
March 12, 2012 at 2:09pm
Ha! See tax reform from the "Second Term" seminar.
- Robert Powell
March 14, 2012 at 5:26am