Let's see, according to the Administration, the economy is doing well and the President is responsible for that. At the same time, the Administration says we need an "emergency" extension of unemployment benefits. At the same time, they brag about the unemployment rate going down.

Hmm.

How about today's news? Unemployment is down to 6.7%! Amazing!!!!

Sorta.

74K jobs created? The expectation was 200k. So, what's really going on?

According to new data from the Bureau of Labor Statistics (BLS) released this morning, the U.S. economy last month added 74,000 new payroll jobs, while the unemployment rate fell to 6.7 percent from 7.0 percent. Good news, right? Not really.

Yes, the unemployment rate has fallen significantly from its high of 10 percent in October of 2009. But it turns out the unemployment rate has been falling for a pretty depressing reason: people dropping out of the labor force. Last month, 347,000 workers dropped out, effectively sending the message that it wasn’t even worth looking for work anymore.

Here’s what the unemployment rate would look like if the labor force participation rate — basically the number of people in the economy working or looking for work — had remained constant since June of 2009:

Why June of 2009 and not some other random month? That is when the National Bureau of Economic Research’s Business Cycle Dating Committee — a group of economists who determine when recessions end and begin — believe the most recent recession finally ended.

To understand how the labor force numbers affect the unemployment rate, it helps to understand how the unemployment rate is calculated. First, BLS determines who is a member of the civilian non-institutional population: people who are 16 years of age or older who are not inhabitants of institutions (prisons, mental institutions, etc.) and not active duty members of the U.S. military. Next, BLS determines what percentage of those individuals are members of the labor force: that roughly consists of people who are either working or are looking for work. Then, BLS determines how many individuals within the labor force are employed. Subtracting the number of employed persons from the labor force gives you the number of unemployed, and dividing the number of unemployed by the total labor force gives you the unemployment rate.

If you hold total employment constant and increase the size of the labor force, the number of unemployed persons will increase, as will the unemployment rate. A shrinking labor force, however, can completely mask a serious job shortage by excluding those who stop looking for work altogether from the calculation of unemployed persons.

In June of 2009, the labor force participation rate was 65.7 percent (by way of comparison, the average over the last decade is 65.1 percent, while the peak was 66.5 percent in June of 2003). Since the end of the recession, that number has nose-dived. At the end of last month, it hit 62.8 percent — on par with what the U.S. experienced in the late 1970′s (although at the time, the number was on the upswing).

Sadly, the graph won't fit here.

And, no, our aging workforce can't explain all of this, sorry.

This is what "recovery" looks like:

The labor force participation rate in 2013 for Americans in their twenties hit the lowest level recorded since 1981, when the Bureau of Labor Statistics started releasing employment data on people in the full age bracket of 20 through 29.

The labor force participation rate for people ages 20 through 24—which BLS has been tracking since 1948—hit a 42-year low in 2013.

Since 2008, the last year before President Barack Obama took office, the number of Americans in their twenties who were not in the labor force during the average month has climbed from 8,756,000 to 10,511,000—an increase of 1,755,000 or 20 percent.

- See more at: http://www.cnsnews.com/news/article/ali ... Ih5MD.dpuf

I know Danivon thinks the economy is doing well compared to other countries, but this is "good?"

Yup, economy is taking off--as in "on vacation."

Friday’s jobs number comes against a backdrop of dashed hopes. Late last year, major forecasting firms said the economy could shake off its anemic growth rate of the last four years and heat up to a 3 percent pace or more in 2014, which would be the fastest rate since 2005. But the first three months of the year saw one weak number after another from job creation to consumer spending to construction. Was all this bad news just the result of frigid temperatures and heavy snows? Or were all the rosy predictions just a bunch of wishful thinking? The answers to these questions could decide the outcome of the 2014 midterm elections.

“Whether the economy keeps puttering along in this kind of semi-stagnant state that has characterized so much of this recovery or whether we finally break out of it is of the utmost importance to the shaping of the fall campaign,” said Bill Galston of the Brookings Institution. “Many Americans still believe we are in a recession. You can run from that fact, but you cannot hide from it.”

http://www.politico.com/story/2014/04/d ... html?hp=t1

Maybe Democrats should try a Danivon-inspired theme: "Hey, we're doing better than Germany, so take that!"

If you still are doing better than Germany, then that is good - factory orders there are up on expectations in figures out yesterday.

When GDP figures come out later this month, then we will see how the overall economy is doing. The winter is being cited as a major factor in Q1 forecasts being rowed down. I am sure that you will be blaming Obama for the bad snows, but objective observers may take a different view.

Even then, the forecasts are looking at over 2% annual.

danivon wrote:If you still are doing better than Germany, then that is good - factory orders there are up on expectations in figures out yesterday.

The economy is in a malaise. This "recovery" is anemic. Historically, the worse the recession, the stronger the recovery. Mr. Obama has managed an "unprecedented" feat--keeping a lid on the American economy.

When GDP figures come out later this month, then we will see how the overall economy is doing. The winter is being cited as a major factor in Q1 forecasts being rowed down. I am sure that you will be blaming Obama for the bad snows, but objective observers may take a different view.

No, I only blame him for stoking a hyper-partisan environment, increasing regulation, throttling new hiring, and generally convincing Americans that the future is less bright than the past.

Even then, the forecasts are looking at over 2% annual.

Which is not good. It's better than before, but not what it could be--what it would be if even Biden were President.

Doctor Fate wrote:The economy is in a malaise. This "recovery" is anemic. Historically, the worse the recession, the stronger the recovery.

Well, That's based on Friedman from nearly 50 years ago. But is it actually true? And does that account for the major factor or could something else be going on? Such as whether the recession is caused by a financial crisis or not.

I googled a question and found this:

http://www.newyorkfed.org/research/conf ... ubrich.pdf

The visual evidence (Figure 2) strongly suggests that deep recessions are fol-
lowed by strong recoveries, though it suggests that a few outliers, particularly
the Great Depression, may have a disproportionate impact.

If you go right to the end of the report you can see this in a series of graphs. Each recession/recovery is a point, Most are clustered together, which suggests no real correlation, but one or two outliers on each graph will allow a linear pattern to be seen - but unfortunately, it's not very strong either way.

Most of the trends they identify are 'not statistically significant' and the major outlier is the big recession of the 1930s (which did see a quick recovery, but then you had a very different approach to it with the New Deal etc).

Bordo and Landon-Lane (2010) nd the world has had five global financial crises
since 1880 (1890-91, 1907-08, 1913-14, 1930-33 and 2007-2008). Figure 4 plots
recovery amplitude (4 quarters) against contraction amplitude for these crises and
all post-World War II contractions, including 2007-2008.
Like the previous figures, figure 4 shows a positive relationship between contrac-
tion amplitude and recovery strength, though the coefficient is relatively small.
In part, this arises from the three most recent cycles, which seem different, with
both a lower intercept and a lower slope. Some speculation suggests that this
results from changes in labor market behavior since the 1980s. (Beauchemin,
2010)

In other words, the relationship appears to be greater for recessions up to the 1990s, but since then, it has become less of an issue. So that would suggest it's not just the current recession/recovery, but the last three that are different to the 'norm'.

Indeed it seems that there are three 'outliers' - the Great Depression, the 1990 recession, and the latest one:

Recessions that accompany a financial crisis tend to be long and severe (Bordo
and Haubrich, 2010, Reinhart and Rogo, 2009). What that portends for eco-
nomic growth once a recovery has started is less certain, however. On the one
hand, there is the feeling that \growth is sometimes quite modest in the after-
math as the financial system resets." (Reinhart and Rogo, p. 235). On the other
hand, there is the stylized fact behind Friedman's plucking model, that "A large
contraction in output tends to be followed on the average by a large business ex-
pansion," (Friedman, 1969, p. 273). One popular measure, the time required to
return output to the pre-crisis level, confounds the depth of the recession with the
strength of recovery. For many purposes, it is important to separate the notions
of contraction depth and recovery strength.
Where does that leave the current recovery? It remains an outlier, as one of the
few cases where output did not return to the level of the previous peak after the
duration of the recession. In this it resembled two very different recessions, the
Great Depression and 1990. Significantly, both of those combined financial prob-
lems and (real) housing price declines, albeit of strikingly different magnitudes.
The unanswered question, of course, relates to causality - tracing out the exact
shocks, and their transmission, remains key. Must housing recover for the recov-
ery to take off, or will the economy pull the industry along? These are questions
for another day

Looking at the graphs, I can see some that 'look' like current cycle (steep dip followed by a less steep recovery, that does not meet the highest point of the pre-trough GDP). 1887, 1907, 1929, and 1990. Most of these are very deep, all bar 1887 were accompanied by banking crises, a credit crunch and a Stock Market crash (1887 is perhaps so close to the 1885 recession that had all of these features that it may be related to a 'false' recovery in 1886-7 and be part of one large double-dip). All bar 1887 also led to a real-terms drop in house prices.

Mr. Obama has managed an "unprecedented" feat--keeping a lid on the American economy.

I think you'll find Bush Snr managed a similar feat. As did Cleveland/Harrison, T Roosevelt/Taft, FD Roosevelt. There's a question that each of those (particularly in the cases of Harrison and Taft) how much it is to do with their policies to help recover, and how much is to do with the hand that has been dealt.

But you are still suggesting that the US economy is not growing. It clearly is. And GDP per capita is also growing according to the World Bank, so it's not just down to immigration either.

When GDP figures come out later this month, then we will see how the overall economy is doing. The winter is being cited as a major factor in Q1 forecasts being rowed down. I am sure that you will be blaming Obama for the bad snows, but objective observers may take a different view.

No, I only blame him for stoking a hyper-partisan environment,

Sorry, I did nearly spit my tea out over my keyboard at that comment. You and others on the right are hardly blameless on this, and in many cases combine it with an inability to focus on much other than who the President is.

generally convincing Americans that the future is less bright than the past.

As for the partisan comment, I thought that you and right wing pundits were doing a pretty good job of that on your own, to be honest.

Even then, the forecasts are looking at over 2% annual.

Which is not good. It's better than before, but not what it could be--what it would be if even Biden were President.

QED.

It's going to be tough to find statistically significant trends with such a small data set. Throw in the important technological, societal, international, and other trends over the last 100+ years and there's no way that anyone can prove anything with this data.

My own view is that the USA is capable of more than an annual 3% economic growth rate for 100 years plus with the right policies. International trade, technological advancement, a growing population, and abundant natural resources are a tremendous base to work from. If the government would operate smartly -- or at least not stupidly -- we could be way more successful than we've been in the last several years. Let's not set a low bar for our politicians by pretending that they are doing a good job. I don't see why either Democrats or Republicans are willing to rationalize their party's bad decisions because of the political imperatives of the respective parties.

danivon wrote:

Mr. Obama has managed an "unprecedented" feat--keeping a lid on the American economy.

I think you'll find Bush Snr managed a similar feat. As did Cleveland/Harrison, T Roosevelt/Taft, FD Roosevelt. There's a question that each of those (particularly in the cases of Harrison and Taft) how much it is to do with their policies to help recover, and how much is to do with the hand that has been dealt.

Hint: I put "unprecedented" in quotes, because the President loves the word. It's "unprecedented" when he makes breakfast. Everything he does is "unprecedented."

Bush 41 kept a lid on the economy by raising taxes. FDR did it by confounding the economy with massive government sinkholes of spending. He made the Great Depression worse. Obama is making our economy worse. We all know businesses are keeping their "powder dry" (capital is on the sidelines). The answer to the "why" question is straightforward: this is an anti-business regime.

But you are still suggesting that the US economy is not growing. It clearly is. And GDP per capita is also growing according to the World Bank, so it's not just down to immigration either.

No, I'm not suggesting that. It is, however, crawling along compared to where it should be and the job market is very slow to recover. In fact, the unemployment rate for millennials is terrible. I saw an article this week that puts it at 16.2%. This is the worst time in my lifetime to be "starting" your adult life. Municipalities aren't hiring much. Businesses are looking for experience. And, in fact, more young people are staying with their parents longer than ever before. Part of that is the infantilization of young people, but part of it is our sickly economy. While I would not agree with all of the suggestions in this article, it certainly describes our economy well, including the problem of dropping labor participation (he notes it cannot all be assigned to aging workers because the younger group is seeing its rate drop as well).

No, I only blame him for stoking a hyper-partisan environment,

Sorry, I did nearly spit my tea out over my keyboard at that comment. You and others on the right are hardly blameless on this, and in many cases combine it with an inability to focus on much other than who the President is.

Bush 43 was constantly under assault. He was a model of humility and lack of partisanship in comparison with Obama. Did you see his "mature" comment about Ryan's budget proposal? He said if it was a sandwich offering it would be a "stinkburger" or a "meanwhich." He is constantly attacking the GOP, then wondering why they won't give him what he wants. All Presidents are partisan. None in my memory was even half as partisan as Obama. Democrats like to blame Republicans for this, but they should listen to what the President says. He has consistently reminded them he won, insulted them, and even hectored the Supreme Court during his SOTU speech. The man is not as partisan as the DNC chair or Harry Reid, but that's not saying much.

generally convincing Americans that the future is less bright than the past.

As for the partisan comment, I thought that you and right wing pundits were doing a pretty good job of that on your own, to be honest.

Of course you do, but addressing that comment about our past and future? Obama seeks to lower any perception that America is the world's superpower. The vacuum he has created is being filled. It is also having an impact at home, just not the one he wants.

Even then, the forecasts are looking at over 2% annual.

Which is not good. It's better than before, but not what it could be--what it would be if even Biden were President.

QED.

Pssh. Again, you don't know what you're talking about. Biden is too loose when he speaks publicly. However, the difference between him and Obama is Biden knows how to cut a deal. Obama will not. Read Woodward's book. Even today, partisan Democrats don't want Biden involved in negotiations with Republicans because they know he will compromise. Look it up.

Ray Jay wrote:It's going to be tough to find statistically significant trends with such a small data set. Throw in the important technological, societal, international, and other trends over the last 100+ years and there's no way that anyone can prove anything with this data.

Well, yes. Tell that to the guy who is making a generalised assertion based on what happens to growth following recessions. My point was to show that it's not so clear cut and that this recession/recovery is not actually unique.

My own view is that the USA is capable of more than an annual 3% economic growth rate for 100 years plus with the right policies.

The mean post-war growth rate is about 3% or so. Is that where you get your view from - what has happened up to now?

The only thing is that the slowdown in average GDP is not new. The 20-year average has gone down from over 4% in the period after WWII, to 3% in the 70s/80s/90s.

Of course, the deep recession of 2008 does skew the figures more than any recession before (although the late 70s/early 80s were also quite bad).

http://ablog.typepad.com/keytrendsinglo ... onomy.html

I am sure it would be great to reverse this trend, but how can it be done - realistically.

International trade, technological advancement, a growing population, and abundant natural resources are a tremendous base to work from.

Just like the British Empire 100 years ago or so.

If the government would operate smartly -- or at least not stupidly -- we could be way more successful than we've been in the last several years. Let's not set a low bar for our politicians by pretending that they are doing a good job.

They certainly are not. Of course, in a global economy, with relatively free trade and an increasingly competitive set of rising nations, national politicians have less and less influence on how a country will perform. Especially when the state is seen as a problem and so politicians don't use it to press the levers as much as they could (not that this is always a good or bad thing, but that clearly if the government is 20-25% of GDP, it will have less direct influence than if it is 40-50%).

I don't see why either Democrats or Republicans are willing to rationalize their party's bad decisions because of the political imperatives of the respective parties.

I think it's all too obvious why.

Look at the charts here: http://www.powerlineblog.com/archives/2 ... charts.php

Summary:

-Record level of Men in prime years of their careers are not working.

-Older workers are hanging on; younger workers not so much.

Oh, and the US economy contracted by 1% in the first quarter.

Go Obamanomics!

Hey, about that "recovery":

The Commerce Department now states that GDP fell at an annualized rate of -2.9% in the first quarter, the worst in more than five years:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 2.9 percent in the first quarter of 2014 according to the “third” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2013, real GDP increased 2.6 percent. …

Real GDP declined 2.9 percent in the first quarter, after increasing 2.6 percent in the fourth. This downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, a deceleration in PCE, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending.

This time the news is bad across the board. Exports dropped 8.9% in Q1, a huge drop from 2013, which wasn’t exactly spectacular either. Real final sales of domestic product dropped 1.3%, where in earlier estimates it had remained in positive territory. Business investment also fell:

What will the economic geniuses in the Administration do now? My guess: demand more of the same.

More of the same doesn't look that bad...http://bigstory.ap.org/article/whats-ma ... -5-factors

freeman3 wrote:More of the same doesn't look that bad...http://bigstory.ap.org/article/whats-ma ... -5-factors

Oh brother.

Humming stock market? Tied to the Fed and there's nowhere else for the cash to get an ROI.

Lowest labor participation rate in 30+ years.

Part-time and under-employment through the roof.

Disability claims at historic levels.

Wages stagnant.

It's not a "world beater." It could be if Obama was not so bent on hamstringing it.

Let's see . . . is it a coincidence that GOP refuses to extend "emergency" unemployment and now the unemployment numbers go down?

No, it's not a coincidence. People are getting off the dole and working for less.

fate

Let's see . . . is it a coincidence that GOP refuses to extend "emergency" unemployment and now the unemployment numbers go down

No, it's not a coincidence. People are getting off the dole and working for less

Rickyp
You have evidence for that?
Because:

The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.

Of the roughly 1.3 million Americans whose benefits disappeared with the end of the program, only about a quarter had found jobs as of March, about the same success rate as when the program was still in effect; roughly another quarter had given up searching. The rest, like Laurusevage, were still looking.3

http://fivethirtyeight.com/features/cut ... k-to-work/

rickyp wrote:fate

Let's see . . . is it a coincidence that GOP refuses to extend "emergency" unemployment and now the unemployment numbers go down

No, it's not a coincidence. People are getting off the dole and working for less

Rickyp
You have evidence for that?
Because:

The economy has indeed improved, but not for the long-term unemployed, whose odds of finding a job are barely higher today than when the recession ended nearly five years ago. And the end of extended benefits hasn’t spurred the unemployed back to work; if anything, it has pushed them out of the labor force altogether.

Of the roughly 1.3 million Americans whose benefits disappeared with the end of the program, only about a quarter had found jobs as of March, about the same success rate as when the program was still in effect; roughly another quarter had given up searching. The rest, like Laurusevage, were still looking.3

http://fivethirtyeight.com/features/cut ... k-to-work/

Okay, you win: they're staying on the dole or leaving the workforce.

One GOOD month of job creation wipes out all the bad or meh economic news?