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The One and Only... The One and Only... is offline
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Old Feb 8th, 2004, 11:46 AM        The "jobless" recovery
Increased Investment Pushes January Job Growth
by William W. Beach, Alison Fraser, Rea S. Hederman, Jr., and Tim Kane
WebMemo #416

February 6, 2004 | printer-friendly format |





Today’s Employment Situation report from the Labor Department shows strong growth in employment: 112,000 new jobs by the payroll survey and 496,000 by the household survey. While the two surveys continue to diverge, both show that more Americans are finding jobs and that employment opportunities have been increasing for several months. Strong business investment,[1] evident in last week’s GDP numbers, prefigured employment growth in the retail sector and construction. The President’s pro-growth economic plan – and his tax cuts, especially – contributed to this increase in employment.



Highlights
The total number of U.S. workers is at an all-time high of 138.6 million.
Unemployment rate of 5.6 percent represents a healthy economy, and is down significantly from 6.3 percent last June.
Payroll jobs increased by 112,000 over last month – the biggest gain since December 2000.
Payroll jobs have increased by 366,000 since August.
Preliminary job growth in December was also revised up from 1,000 to 16,000.
Employment increased by 496,000 workers in January, according the household survey.
The Myth of Discouraged Workers

There are 4 percent fewer discouraged workers today than one year ago.
The rate of discouraged workers is lower today than the mid-1990s.
Teenagers account for roughly two-thirds of lower labor force participation rates since the peaks of the late 1990s. Because 10 percent fewer teens are looking for work than in the 1990s, the overall participation rate is down from its peak in the late 1990s.[2]
Two Surveys, Two Revisions
The story of diverging job growth between the two BLS surveys is now familiar, but here is a refresher: before today the BLS survey of establishments showed a decline of 776,000 payroll jobs during the recovery, while the household survey shows growth of the workforce by over 2.2 million. Today’s revisions had very little impact on that disparity (see chart).

The population estimate from the Bureau of the Census was reduced, lowering the household measure of total employment by 409,000, while the household survey estimate of employment grew by 496,000. The overall effect was a net gain in this measure of employment.
Payroll surveys were benchmarked to a complete count of companies, covering 98 percent of the workforce. As a result, original estimates of nonfarm payroll employment over the last year were revised down. Taking into account all revisions, 82,000 more jobs were created from March to December of 2003 than previously estimated.
The divergence in total employment between the two surveys was not resolved by today’s revisions. Before today, the job growth gap was exactly three million in the raw data. As of today:

The revised household survey measure increased by 2.2 million workers since the end of the recession in November 2001.
The revised payroll survey measure declined by 716,000 jobs during that time.
BLS does not believe that new businesses are being missed by the payroll survey but does acknowledge that “contractors,” as a category of workers, are missed by the payroll survey and are not counted among the self-employed, either.

Source: www.heritage.org
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Old Feb 8th, 2004, 01:22 PM       
... And yet you had over 50,000 fewer jobs than was originally predicted. It's amazing how that article only portrays the good things, doesn't mention any of the negatives, and gets good numbers by "revising" statistics; typical pro-Bush ass-patting.

U.S. labour market improves


By TERRY WEBER
Globe and Mail Update


The U.S. job market added 112,000 new jobs in January -- the biggest monthly gain since December, 2000 -- but the numbers still came in short of analysts' forecasts, suggesting interest rate hikes in the United States likely won't be in the cards in the immediate future.

In January, the U.S. jobless rate slid to 5.6 per cent, from 5.7 per cent. The job creation number follows an upwardly revised gain of 16,000 new positions in December, the U.S. Department of Labour said Friday.

Still, despite the increased pace of hiring in the first month of this year, the latest figures failed to result in a significant change in pre-market stock futures.

Economists had been hoping to see job gains in the range of 165,000, with some putting so-called whisper number as high as 300,000.

The January report comes as the markets try to determine how quickly the U.S. Federal Reserve is likely to begin raising interest rates. Last month, the central bank left rates alone but also dropped its long-held position that borrowing costs would stay where they are for a considerable period.

Although the broader economy is picking up steam, Friday's report still suggests the Fed is likely to wait for clearer signs of strengthening in the labour market before making a move.

“The US. employment report remained pathetic,” BMO Nesbitt Burns chief economist Sherry Cooper said in a morning commentary. “There is no reason in this report for the Fed to get interested in near-term tightening.

“So, we are left right where we were - most other job statistics are stronger than these official numbers, and the Fed is on hold.”

According to Friday's report, job increases came in the construction industry as well as a number of service-producing industries.

However, manufacturing employment continued to decline, although the pace of job losses slowed. During the month, hiring in the factory sector fell by 11,000 jobs. From September through to January, job losses in manufacturing have averaged about 20,000 positions a month.

Construction employment, however, rose by 24,000 positions in January, buoyed by continuing strength in the housing market.

As well, the retail trade sector added 76,000 new jobs.

The U.S. employment picture is likely to be a key issue as November's presidential election grows closer. Although tax cuts have been widely credited with helping keep the wider economy afloat, the U.S. job market has failed to keep pace. About 2 million jobs have been lost since U.S. President George W. Bush took office, leading some to suggest that the weak hiring picture could leave him vulnerable unless the situation improves by the time voters head to the polls.

http://www.theglobeandmail.com/servl...tory/Business/
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Old Feb 8th, 2004, 03:43 PM       
The Heritage Foundation. Spare me.
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Old Feb 8th, 2004, 04:48 PM       
The Heritage Foundation ROCKS!!!!
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Old Feb 8th, 2004, 05:12 PM       
Schoolhouse Rocks. Cleveland Rocks. But the Heritage Foundation? Are they even okay with dancing, let alone rocking?
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Old Feb 8th, 2004, 05:26 PM       
What are you trying to prove in these threads, OAO? Bush's economic policy is clearly much different than your own ideals. Why are you posting these shady bullshit ramblings?
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Old Feb 8th, 2004, 05:30 PM        How's this for rocking?
http://www.nationalreview.com/nrof_b...0312010924.asp

December 01, 2003, 9:24 a.m.
Third Quarter Pounder
A meaty economy gets super-sized.

By Jerry Bowyer



Now we know the critics were right: The economy did not grow at 7.2 percent in the third quarter. But the bad news for the critics is that it grew even faster: Gross domestic product for the third quarter of 2003 expanded at an incredible 8.2 percent. How fast is that? Well, it roughly triples America's historic 2.5 to 3 percent growth rate (that is, if this pace continues) and it is the second-fastest-growing quarter in twenty years.



BuzzCharts investigated why the Commerce Department underestimated GDP growth in their report early last month. After consulting Economy.com and GKST Economics, we learned the following: It turns out that American businesses bought $21 billion more inventory in the third quarter than was originally estimated. That's a lot of optimism to be shown by the people who have skin in the game — the retailers. In addition, corporate profits grew by an annualized 12 percent.

The most interesting aspect of this amazing growth spurt is that it accentuates the basic defining principle of supply-side economics: Demand is never the problem (people always want new goods and services), supply is the problem (entrepreneurs will only supply goods and services when they are not punished for doing so).

In 2001 the president was pressured by congressional Democrats to defer the portion of his tax cuts that applied to wealthy individuals — that is, the people who supply the most goods and services. Instead, the president deepened and accelerated rebates for the poor and middle class to “put money back in people's pockets” and get them spending again. The results were meager: The economy came out of recession, but barely so. In May of this year, however, the president came back to the supply side. He insisted on tax cuts for the wealthy in the form of marginal rate decreases, and for capitalists of every economic class in the form of dividend and capital-gains tax cuts. The results are all too apparent.

Now, if the president can only resist the siren call of protectionism and weak dollar diplomacy, this Bush Boom might just keep on booming.
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Old Feb 8th, 2004, 06:29 PM       
I still don't have a job...
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Old Feb 8th, 2004, 06:35 PM       
There has to be at least ONE more Right-Wing outlet we can cite in this thread.....
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Old Feb 8th, 2004, 06:36 PM       
Still not convinced?

http://apnews.myway.com/article/20040206/D80HSO483.html

Jobless Rate Drops; 112,000 Jobs Added

Feb 6, 12:17 PM (ET)

By LEIGH STROPE

(AP) The nation's unemployment rate dropped to 5.6 percent in January to the lowest level in more than...

WASHINGTON (AP) - The nation's unemployment rate dropped to 5.6 percent in January to the lowest level in more than two years as companies added just 112,000 new jobs - fewer than expected but enough to keep alive hope for a turnaround in the struggling job market.

The jobless rate fell 0.1 percentage point last month to the lowest level since October 2001, when it was 5.4 percent, the Labor Department said Friday. January's rate matched the 5.6 percent posted in January 2002.

Employers added new jobs last month at a pace not seen in three years. The last time payrolls expanded more than 112,000 was in December 2000, when companies added 124,000 positions.

But economists were disappointed, saying they had expected a larger increase of 150,000 new jobs or more.


(AP) Sammuel Palmer, right, leaves the Boeing Aerospace Support Center in San Antonio, Tuesday, Feb. 3,...
Full Image


"It is not disastrous news, but it is definitely disappointing," said Bill Cheney, chief economist at John Hancock Financial Services.

Added Ken Mayland, president of ClearView Economics: "This economy under normal circumstances should be generating 200,000 to 300,000 a month" in new jobs.

Analysts are looking for monthly payroll gains of 300,000 or more for sustained job growth, and the economy remains far from that mark.

White House press secretary Scott McClellan said the lower jobless rate means the president's job and growth plan is working.

"Since August of last year, there have been 366,000 new jobs created," McClellan said. "The unemployment rate of 5.6 percent is well below the average of the 70s, 80s and 90s. ... Today's report is another sign that the economy is continuing to grow strong and that jobs are being created."


(AP) The productivity of America's workers slowed in the final three months of 2003, advancing at a 2.7...
Full Image


The report sent stock prices slightly higher on Wall Street in morning trading.

Job growth is expected to be a key issue as November's presidential election nears, and President Bush could be vulnerable. The economy has lost more than 2 million jobs since he took office, giving him the worst job creation record of any president since Herbert Hoover.

Still, January's hiring gains marked the fifth straight month of increases, and followed a revised 16,000 new jobs added in December, better than the 1,000 initially reported.

Friday's report "is good news for workers, and it's yet another sign that the economy has turned the corner and the nation's job market is getting stronger," said Labor Secretary Elaine Chao. "The economy has created jobs in each of the last five months, with hundreds of thousands of Americans finding new jobs."

Hiring by retailers and construction companies accounted for much of the overall increase in payrolls. The nation's factories continued shedding jobs, though at a slower pace than in previous months.


(AP) The graphic tracks factory orders, as reported by the Department of Commerce, for the past year....
Full Image


Some economists think hiring really is occurring in the economy, but it is not being reflected in the Labor Department's monthly survey of business payrolls. In the separate survey of households, employment jumped by 496,000 last month.

The household survey counts self-employed workers and contract workers, which are increasing. The survey of businesses does not.

"They're not recording the outside contractors - they're not reflecting something that is tremendously fundamental now to the American corporate scene, and that's outsourcing to outside contractors," Mayland said.

The Labor Department's Bureau of Labor Statistics acknowledged the continuing discrepancies, and said it is investigating.

Businesses are being squeezed by intense competition from other countries, and are holding down costs by not hiring new, full-time workers in the United States. Instead, they are outsourcing, working their existing employees harder or shipping jobs overseas.

Friday's report showed that workers are indeed putting in longer hours, with the average work week climbing by 0.2 hour to 33.7 hours. The manufacturing work week increased by 0.3 hour to 40.9 hours.

"Employers are working their workers longer hours instead of hiring more bodies. For the economy, that counts," Mayland said, noting that it produces more income for consumers to spend, keeping the economy afloat. "This is telling you the economy really is growing very fast."

Construction companies helped boost overall hiring gains, adding 24,000 new jobs last month. Buoyed by continued strength in the housing market, the sector has added 147,000 positions to its payrolls since last March.

In the service sector, where most of the job growth is taking place, retailers added 76,000 new jobs. Garden supply and home building material stores were particularly strong, also reflecting a strong housing market.

About 8.3 million people remained unemployed in the United States last month.
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Old Feb 8th, 2004, 07:41 PM       
http://www.workers.org/ww/2004/economy0122.php

What good is a 'recovery' without jobs?
By Milt Neidenberg

Cheerful thoughts about a boom economy in the foreseeable future have been seriously dampened by the December job-growth figures reported by the Bureau of Labor Statistics. Far from the 150,000 new jobs predicted by just about every high-priced Wall Street analyst and bourgeois economist, they turned out to be a miniscule 1,000. When the figures were released, the Dow Jones industrial average dropped 133.55 points and the NASDAQ 13.33.

How could they have gone so far off target? Do they lack the data to predict so significant an economic statistic as job growth?

They went astray because the economy is unpredictable and expanding out of control, even while there are signs of stagnation and crisis.

The Wall Street Journal on Jan. 9 rounded up a group of Wall Street economists for a consensus. There was none. "The payroll gain of only 1,000 is ... quite shocking. ... I would certainly not have expected anything resembling that," said Bill Cheney, chief economist at John Han cock Financial Services. And there was James Glassman, a J.P. Morgan economist: "We're at least three to four million jobs below what we should be."

Then there were the optimists. "Over the next few months, all the signs are that payroll employment will rise dramatically," stated Ian Richardson, chief economist at High Frequency Economics. But the chief economic officer at Wells Fargo, Sung Won Sohn, thought otherwise: "Neither business nor potential employees have confidence in the economy."

The current fear is that the economic expansion, which began around Novem ber 2001, is running out of steam. It has been a jobless recovery. Overall the economy dropped by 74,000 jobs in 2003. Since President Bush took office in January 2001, over 2.3 million jobs have disappeared. More than 300,000 workers were permanently dropped from the job market, and the index of hours worked fell below the 1998 level.

The traditional unemployment rate does not count various segments of the working- age population--people not looking or working part-time. More "discouraged workers" explains why the unemployment rate dropped from 5.9 to 5.7 in December, but the Bush administration put a positive spin on it.

Consumer confidence is on the decline. Consumer spending represents two-thirds of the Gross Domestic Product. People can't continue to spend when there is no income. Consequently, under the most relentless, unprecedented rise in productivity, the markets have become glutted with goods and services.

Intense exploitation of the workers and the oppressed sections of the population also has drawbacks for the capitalists. As Karl Marx explained, if the capitalists are exploiting fewer workers, there's less unpaid labor, less extraction of surplus value, and consequently less profit for the boss class.

Echoes of 1930s

This is no normal recovery. A Jan. 10 New York Times article, headlined "As Far as Jobs Go, Bush Can Only Wait," said: "Both the White House and the Fed [Federal Reserve Board] are confronted by a recovery unlike any other in history. Economic growth has been soaring for months, corporate profits have shot up, and the stock market has regained much of its ebullience. Yet job creation has been slower than in almost any previous recovery and wage growth has slowed to a crawl."

Today more than one out of every 10 workers is unemployed. This rises to three out of 10 among Black and Latino teen agers and over two out of 10 in the Black adult population. The unofficial rate is even higher. These brutal facts expose the so-called trickle-down theory: that good times bring good jobs.

Is this a recovery unlike any other in history? No. It is like the 1930s. Edmund S. Phelps, professor of political economy and director of the Center on Capitalism and Society at Columbia University, commented in the Jan. 5 Wall Street Journal that "The technological developments and overseas tensions that slowed and limited the 1930s recovery have clear parallels in the economy's present situation." The unemployment rate then was one out of every four.

Prices briefly dropped during the most acute stage of the economic crisis of the 1930s, but the upward spiral of prices soon resumed. Today, prices of commodities are on the rise due to runaway deficits and rising interest rates, but even more because of the monumental war expenditures that are causing the devaluation of the dollar.

According to Robert Pollack, professor of economics at the University of Mas sachusetts at Amherst, "Five percent more money is being pumped into the economy than taken out in tax revenues ... and 60 percent of the 3.3 percent growth in the GDP is attributed to the military."

Military spending a depressant

Military spending of the astronomical dimensions required to pay for the Iraq and Afghanistan wars has diverted hundreds of billions of dollars from much-needed social programs. Sam Marcy, chairperson of Workers World Party, said in a 1975 discussion bulletin, "Instead of acting as a stimulant to capitalist expansion and accumulation [military spending] turns into its dialectical opposite and becomes a depressant. Like any drug, it may operate to accelerate recovery from illness, but if administered on an ever-continuing and ever-increasing basis with out letup, it becomes toxic and poisons the organism." This is even more true today.

Dark clouds loom for the capitalist system. If there is no job growth in the coming months, the Bush reelection will be in trouble. A number of Democratic presi den tial candidates, as the 2004 election grows nearer, will present proposals that they promise will bring back jobs, peace and prosperity. Promising won't make it so. These candidates support the system of monopoly capitalism and the exploitation of labor for profit.

The occupations of Iraq and Afghan istan have not brought Wall Street and Washington spoils from their wars of aggres sion. At home, the capitalists believe the cure lies in layoffs, cutbacks in social programs, and intolerable productivity and poverty.

To the multinational workers and oppressed nationalities, recovery means jobs for all and insuring work opportunities for the oncoming generation. It means a rise in the standard of living for them and their loved ones. There is a conjuncture of class-wide interests with other movements--the anti-war activists, the civil rights/civil liberties and anti-globalization resisters. And most important, the struggle must be elevated within the labor movement, especially building solidarity with immigrant workers. The crisis requires joining forces and taking the independent road to fight back.


Reprinted from the Jan. 22, 2004, issue of Workers World newspaper
(Copyright Workers World Service: Everyone is permitted to copy and distribute verbatim copies of this document, but changing it is not allowed. For more information contact Workers World, 55 W. 17 St., NY, NY 10011; via email: ww@wwpublish.com. Subscribe wwnews-on@wwpublish.com. Unsubscribe wwnews-off@wwpublish.com. Support independent news http://www.workers.org/orders/donate.php)
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Old Feb 8th, 2004, 07:49 PM       
Want more?

Here is a British source....

http://www.guardian.co.uk/business/s...142714,00.html

***********************

Surging US economy leads global recovery

Mark Tran and agencies
Friday February 6, 2004

The US economy strengthened considerably in December, leading the global economic recovery and leaving Europe and Japan behind, the Organisation of Economic

Cooperation and Development (OECD) said today.
The upbeat assessment of the US economy from the OECD came just hours ahead of a meeting of finance ministers from the G7 group of leading industrialised countries, with the weakness of the dollar the prime subject of concern.

"Moderate to strong recovery lies ahead in the OECD area," the organisation said in a statement. "December data signal continued strong improvement in the United States but weaker development for Italy."

For the 30-nation membership of the OECD, the December leading indicator - a pointer of future economic activity - rose to 123.6 from 122.8 in November. The reading for the US was 133.3 (up from 131.7), the 12-nation euro currency zone struggled up to 123.8 (from 123.5), and Japan managed a weak increase of 0.2 to 102.3. Of the G7 economies, only Italy showed weaker development, its index slipping to 106.3 in December from 107.8 in November.

The OECD's data will give John Snow, the US treasury secretary, something to crow about amid unease - especially in the eurozone - at the fall of the dollar, which threatens to hurt European exports and, by extension, the fledgling recovery in continental Europe.

Joseph Stiglitz, the Nobel-prize-winning economist - and a critic of US economic policy - predicted that Mr Snow would oppose any efforts by the G7 to counter the fall in the dollar. In interviews with the French media, Mr Stiglitz, a former chief economist at the World Bank, also called on the European Central Bank (ECB) to act to bring down the euro's strong exchange rate against the dollar.

"The Bush administration will make no concession," Mr Stiglitz told the French business daily La Tribune, ahead of the meeting of G7 finance ministers and central bankers in Boca Raton, Florida. "George Bush needs the fall in the dollar to support American growth and to be re-elected, even if that is to the detriment of Europe."

Economists acknowledge the need for the dollar to fall as it was overvalued and a decline would help to trim the enormous US current account deficit, the broadest measure of trade. But the euro has been bearing the burden of adjustment as Asian central banks have been intervening in the foreign exchange markets to mop up dollars at a record rate to keep their own currencies from rising and choking off exports.

Mr Stiglitz urged the ECB to act in order to bring down the value of the euro.

"The European Central Bank should intervene to bring down the exchange rate of the euro and it should also lower interest rates," he told France Inter radio. "If it did this, and it could do this if it wanted to, almost surely the euro would decrease in value relative to the dollar."

The ECB left interest rates unchanged at 2% yesterday - twice the 1% level in the US. Jean-Claude Trichet, ECB president, warned of the risk of excessive exchange rate movements but declined to comment on what action the G7 finance ministers might take on currencies.

**********************

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Old Feb 8th, 2004, 08:07 PM       
We'll see who shall win this duel!!!

http://www.commondreams.org/headlines03/1229-01.htm

Published on Monday, December 29, 2003 by the Los Angeles Times

Jobless Count Skips Millions

The Rate Hits 9.7% When the Underemployed and Those Who Have Quit Looking are Added

by David Streitfeld

SAN FRANCISCO — Lisa Gluskin has had a tough three years. She works almost as hard as she did during the dot-com boom, for about 20% of the income.

When Gluskin's writing and editing business cratered in 2001, she slashed her rates, began studying for a graduate degree and started teaching part time at a Lake Tahoe community college for a meager wage.



The industries that were expanding in the late '90s, including computer and professional services, paid well.

Those industries are in retreat. So is manufacturing, a traditional source of high wages. On the rise, meanwhile, are lower-paying service jobs.

During the boom, it was easy to trade up. Now it's just as easy to trade down.



It's been a fragmented, hand-to-mouth life, one that she sees mirrored by friends and colleagues who are waiting tables or delivering packages. In the late '90s, the 35-year-old Gluskin says, "we had careers. We had trajectories. Now we have complicated lives. We're not unemployed, but we're underemployed."

The nation's official jobless rate is 5.9%, a relatively benign level by historical standards. But economists say that figure paints only a partial — and artificially rosy — picture of the labor market.

To begin with, there are the 8.7 million unemployed, defined as those without a job who are actively looking for work. But lurking behind that group are 4.9 million part-time workers such as Gluskin who say they would rather be working full time — the highest number in a decade.

There are also the 1.5 million people who want a job but didn't look for one in the last month. Nearly a third of this group say they stopped the search because they were too depressed about the prospect of finding anything. Officially termed "discouraged," their number has surged 20% in a year.

Add these three groups together and the jobless total for the U.S. hits 9.7%, up from 9.4% a year ago.

No wonder the Democratic presidential candidates have seized on jobs as a potentially powerful weapon.

Howard Dean criticized President Bush for "the worst job creation record in over 60 years." Richard Gephardt said that "I have three goals for my presidency: jobs, jobs, jobs." John Kerry said "the first thing" he'd do as president would be to fight his "heart out" to bring back the jobs that have disappeared in recent years.

Bush, meanwhile, is quick to seize credit where he can. When the unemployment rate for November fell one-tenth of a point, he went out immediately to give a speech at a Home Depot in Maryland.

"More workers are going to work, over 380,000 have joined the workforce in the last couple of months," Bush said. "We've overcome a lot."

A number of economists say it's a mistake to evaluate the job market solely by talking about the official unemployment rate. It's a blunt instrument for assessing a condition that is growing ever more vague.

"There's certainly an arbitrariness to the official rate," says Princeton University economics professor Alan Krueger. "It irks me that it's not put in proper perspective."

On Jan. 9, when the rate for December is announced, both Republicans and Democrats will assuredly again maneuver for advantage — precisely because the number isn't expected to change much.

"At this point, where we don't know which way it's going but it isn't likely to be going far, both sides will try to use it," says Michael Lewis-Beck, a political scientist at the University of Iowa.

In every election since 1960, the party in the White House lost when the unemployment rate deteriorated during the first half of the year. If the rate improved, the party in the White House won.

That's not a coincidence, says Lewis-Beck, who has edited several volumes on how economic conditions determine elections. "People see the president as the chief executive of the economy," he says. "They punish him if things are deteriorating and reward him if things are improving."

By any normal standard, things should have been improving on the employment front long before this point. More than 2 million jobs have been lost in the last three years, a period that encompassed a brief, nasty recession and a recovery that was anemic until recently. Even in the best-case scenario, Bush will end this term with a net job loss. That hasn't happened to a president since Herbert Hoover at the beginning of the Depression.

Many economists are mystified about why a suddenly booming economy is producing so few jobs.

"We're all sitting there and saying, 'When are they going to return?' " says Richard B. Freeman, director of the labor studies program at the National Bureau of Economic Research. "It's looking a little better, but we don't understand why it isn't looking a lot better. Why shouldn't Bush be sitting there saying, 'Man, I'm sitting pretty. This is a great boom'?"

One statistic proving particularly perplexing is the percentage of the adult population that is employed. This number rises during good times, as people are lured into the workforce, and falls during recessions as companies falter.

True to form, the percentage of adult Americans with jobs dropped from a high of 64.8% in April 2000, just as the stock market was cresting, to 62% in September — the lowest level in a decade. If past recessions are any guide, those 5 million people who found themselves jobless should have driven the unemployment rate up to about 8%.

Instead, the rate never went much above 6%.

"More than half of the additional people who would have reported themselves as unemployed in a previous big recessionary period … aren't," a puzzled UC Berkeley economist, Brad DeLong, wrote on his website. "They're reporting themselves as out of the labor force instead."

"Out of the labor force" means you're not working for even one hour a week and don't want to, either. It's the traditional category for students, married women with young children, flush retirees and idle millionaires.

A new way that people seem to be joining this category is by getting themselves declared disabled. This designation makes them eligible for government payments while removing them from the unemployment rolls.

From 1983 to 2000, economists David Autor and Mark Duggan wrote in a recent study, the number of non-elderly adults receiving government disability payments doubled from 3.8 million to 7.7 million.

The scholars present a case that the sharp increase isn't because the workplace suddenly became more dangerous. Instead, it has been prompted by liberalized screening policies, which make it possible to claim disabled status for, say, several small impairments as opposed to one big injury. Government examinations also have been downplayed in favor of the disabled's own medical records and the pain he or she claims to be experiencing.

At the same time, benefits have been sweetened. As a result, millions of individuals who lost jobs now have an attractive — and permanent — alternative to searching for work.

Autor and Duggan concluded that if disability payments weren't so appealing, many more people would be unemployed, boosting the jobless rate two-thirds of a point.

Another way in which people forgo an appearance on the unemployment rolls is if they decide to go into business for themselves. There are 9.6 million people who say they are self-employed full time, a number that rose 118,000 last month. Without the recent increase in self-employed, the jobless number would look much worse.

Many others may be working for themselves part time, temporarily, as a way to get food on the table in the absence of better options.

Take Steve Fahringer, who until recently was working for a Bay Area marketing agency that cut 20% of its employees and trimmed the wages of the remainder by 20%. Fahringer didn't particularly like his job. Because the recession supposedly was history, he thought he could find a new position. The 34-year-old didn't think it would be easy, but he thought it possible. So he quit.

"I left July 1," he says. "I haven't found a new job yet."

It's a common problem. The segment of the labor force that has been jobless for more than 15 weeks has risen nearly 150% since 2000. The current level is the highest since the recession of the early 1990s. Nearly one-quarter of the jobless have been unemployed for longer than six months.

In Fahringer's case, he spent some time aggressively looking for a job, which made him part of the official July unemployment rate of 6.2%. Then he stopped looking, which meant that he was one small reason the rate started going down.

Instead of unemployed, Fahringer was classified as "discouraged." A little more than 8% of the people who want a job in the Bay Area are estimated by the Bureau of Labor Statistics to be discouraged, slightly higher than Los Angeles/Long Beach but lower than the battered technology center of San Jose.

Discouraged workers have never been included in unemployment rates, although they came close the last time a commission met to reform the system, a quarter of a century ago. "It was a very hot issue," remembers Glen Cain, a retired economist who was a commission member. He says the conservatives on the panel, who felt that anyone who really wanted a job should be out there hustling no matter what, prevailed.

Fahringer found an alternative way to earn a bit of money. He did some acrylic paintings, which he sold for a total of $1,000. He calls himself "a hobbyist," which means for a while he moved out of the labor force entirely.

Now he's a temp, assigned by his agency to a nonprofit office. For the first time in six months, he's working 40 hours a week. By the government's accounting, he has once again joined the ranks of the employed. But from the standpoint of his wallet, Fahringer is worse off: He's earning less money, with no paid holidays, no sick leave, no pension plan, no health insurance, no future.

The Economic Policy Institute, a liberal-leaning Washington think tank, says Fahringer's situation is in many ways typical. The industries that were expanding in the late '90s, including computer and professional services, paid well.

Those industries are in retreat. So is manufacturing, a traditional source of high wages. On the rise, meanwhile, are lower-paying service jobs.

During the boom, it was easy to trade up. Now it's just as easy to trade down.

Fahringer's solution: Opt out.

"I'm thinking of going back to school," he says. "I'd take out a loan." That would put him out of the labor force again.

In some eyes, a nation of burger flippers, temps and Wal-Mart clerks isn't the worst scenario for the economy. The worst is that companies continue to eliminate jobs faster than they create them, setting up a game of musical chairs for the labor force.

That prospect alarms Erica Groshen, an economist with the Federal Reserve Bank of New York. "If you plot job losses versus gains on a chart, it's shocking," she says.

Losses are running at about the same rate they were in 1997 and 1998, two good years for the economy. But job creation in the first quarter of 2003 — the most recent period available — was only 7.4 million, the lowest since 1993.

"If this goes on too long, you'd have to worry there's something fundamentally wrong," Groshen says. Although the economy has picked up since March, "so far I haven't seen anything that suggests job creation is picking up."

That bodes poorly for Ian Golder. His last full-time job was with a start-up publication that wrote about venture capital.

Two years ago, Golder was laid off. It was the first time since he graduated from UC Berkeley 14 years earlier that he didn't have steady work.

Golder looked for a while, gave up for a while, then landed a contracting gig with no benefits proofreading for a chip maker. When that ran out, he worked 20 hours a month on a financial services newsletter.

His wife, Heather, a recent graduate in English from UC Davis, also was without a job. They thought about selling their house in Sacramento and moving, but prospects didn't look any better anywhere else. To make ends meet, they took in two boarders.

At the beginning of December, things seemed to improve a bit. Golder got a job in the document-control department of a medical devices company. The department, he was told, used to have 20 full-time people. Now it has five, plus four temps.

The job will last two months. After that, who knows?

"Optimists say things will be better then," Golder says. "But a full-time position with benefits seems pretty remote."

Copyright 2003 Los Angeles Times

###
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Ronnie Raygun Ronnie Raygun is offline
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Old Feb 8th, 2004, 09:10 PM       
"We'll see who shall win this duel!!!"



Well, so far you're losing 3 articles to 4 so what are you going to do about it?
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Ronnie Raygun Ronnie Raygun is offline
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Old Feb 8th, 2004, 09:19 PM       
MAKE THAT 3 TO 5!!!

HAHAHAHAHA!

http://www.nationalreview.com/kudlow/kudlow.asp

Entering the Zone
This economy is hot. GDP alarmism is nothing but blather.

If we knew gross domestic product would run at 4 percent, industrial supply at record levels, basic inflation at less-than 1 percent, real disposable income at 31/2 percent, gold around $400, and the 10-year Treasury bond just above 4 percent — and we knew these performance results would last for many years — we would be very happy indeed.

Why then is everyone suggesting that 4 percent GDP — the just-released mark for last year's fourth quarter — represents an economic slowdown? It's all blather.

Not only is such alarmism uncalled for, but the basic components inside the GDP report are very favorable. The U.S. economy, spurred by a significantly lower tax bite on investment, and financed by a moderately easy Fed, is now generating more investment and production than consumption. In other words, we're investing and producing more than we consume. Supply is growing faster than demand.

As a result, the excess supply (stated in growth terms) has actually reduced the core inflation rate even as overall economic growth is registering its best gain in many years. GDP for the second-half of 2003 was a stellar 6 percent, and the core price index for consumer spending eased to 0.7 percent in fourth quarter compared to 1 percent in the third. We're in an inflationless expansion.

Supply-siders have long argued that growth solves inflation. The availability of more goods absorbs excess money — especially when growth is well balanced on the shoulders of tax incentives that spur the investment side of the economy. Moreover, the rise in capital formation is contributing to outsized productivity and profit gains. This, in turn, will soon lead to rapid job creation.

Liberal economists seem not to recognize that capital is labor's best friend. Without new capital formation to spark profitable new businesses — which create new jobs and a more efficient workforce (equipped with the latest technologies) — labor prospects would be gloomy, not upbeat.

Critics in the media and on the campaign trail are skipping a beat as well when they say we're in a jobless recovery. They of course ignore the new culture of small-business self-employment which, in the Labor Department's house-to-house survey, registered 2 million new jobs last year (compared with a loss of 70,000 in big-business payrolls). But the addition of 2 million workers, in large part generated by higher take-home-pay rewards from lower individual tax rates, won't be counted in the government's payroll survey for 18 to 24 months.

One reason corporations have been slow to hire is that the non-entrepreneurial sector of the economy is only just now beginning to flower. Excluding government spending, real private-sector GDP has expanded at a 5.3 percent annual rate since the Bush tax cuts became law last spring. In the prior six quarters private-sector growth averaged only 2.5 percent.

As a rule, the expansion of corporate payroll jobs requires that private GDP grow faster than output-per-hour productivity. Since the end of 1995, output-per-hour has increased at a 3.2 percent annual rate. So the 3 percent private-GDP gain in 2002 and early 2003 was insufficient to create new jobs. But the better-than 5 percent growth since then has exceeded the trend-rate of productivity. Hence, we are now entering the zone of new job creation — right as the tax-cut-nurtured economy has shifted into high gear. Payroll jobs could rise by 2 million this year.

The significant pickup in U.S. exports abroad also attests to the country's renewed economic health. As the overly strong dollar has normalized, exports doubled to 19 percent in the fourth quarter compared to less than 9 percent in the third.

The heightened after-tax competitiveness of American business will continue to surprise everybody with record export volumes. As we produce more than we consume inside the U.S. economy, the excess production is being shipped abroad, spurring world economic growth.

Democrats may carp about short-run budget deficits, and the vast majority of media commentators are obsessed with these deficits, but the economy is healthy, the stock market is strong, trade flows are positive, and interest rates and inflation are at rock bottom. Let them carp and obsess.

Liberal Yale economist Ray Fair has perfected a model that predicts election outcomes. Recently his model has been re-estimated by the well-respected Macroeconomic Advisors of St. Louis. Both models came within a few tenths of a percent of accurately predicting the popular vote in 2000. Taking into account today's strong economy, both predict a Bush victory with roughly 60 percent of the vote come November.

In electoral terms, it's the economy, not the budget deficit, that will decide November's presidential election. Bush's economy, and his reelection prospects, are in fine shape.

— Larry Kudlow, NRO's Economics Editor, is CEO of Kudlow & Co. and host with Jim Cramer of CNBC's Kudlow & Cramer.
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Old Feb 8th, 2004, 09:40 PM       
Mock Wars board.
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Ronnie Raygun Ronnie Raygun is offline
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Old Feb 8th, 2004, 10:09 PM       
Don't worry Boogie.....the war is already over.
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KevinTheOmnivore KevinTheOmnivore is offline
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Old Feb 10th, 2004, 10:15 PM       
I think my previous article from Common Dreams is fairly pertinent.
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