January Jobs Report(s)

Well, the January Jobs Report that is issued by ADP each month, detailing the number of private sector jobs created the month before is out. Last month, the ADP report had this number at 297K new jobs. When the official Department of Labor Bureau of Labor Statistics report came out a couple of days later, the real number of jobs was pegged at 103K new jobs for the month. Of course, the difference is because ADP only evaluates private sector jobs while the BLS report details all jobs, including those in the public sector where a lot of state and local governments have been cutting jobs.

Today's ADP report (via Reuters):

The private sector added 187,000 jobs in January, compared with a downwardly revised 247,000 jobs in December, a report by payrolls processor ADP Employer Services showed on Wednesday.

The ADP figures come ahead of the government's more comprehensive January labor market report on Friday, which includes both public and private sector employment.

But ADP figures for December -- both initial and revised -- turned out to be much stronger than the government report showed, adding to doubts about the reliability of ADP as a predictor of payrolls.

Now as I mentioned above, the differences between the ADP numbers and the BLS numbers are most likely due to the addition of public sector jobs being included in the BLS figures. I do though find it a bit interesting that ADP revised their December numbers down 50K jobs, an almost 17% downward revision from the original report. If that happens for January, then the 187K jobs becomes 155K jobs, which is just above the jobs break even point of 125K to 150K needed each month just to maintain status quo on employment and absorb new people entering the work force each month. And with the public sector most likely showing a decline again it will still keep the official unemployment rate well above 9% and the un and underemployment rate in the official area of 17% (which I believe is an under count myself). So we still will be in the 25M to 30M range of un and underemployed with millions of people out long term (defined as more than six months).

We still have media going in every direction on just what kind of shape the economy is really in today. On Monday, McClatchy had this report describing the confusion with the best description buried at the end:

Because there's so much volatility in the weekly and monthly numbers, why should any one report is (sic) given so much weight on Wall Street?

"If you look at the size of the (hiring) revisions, you ask why the stock market cares. They just want something to bet on. Why are you betting money on that other than to bet money?" Dunkelberg asked.

Wall Street's need to bet seems to make pretty much the most sense of all. Of course, the entire economy pays the price of the Wall St gambling problem.

Friday (January 28), MSNBC had an analysis here which is positive but caveated:

The U.S. economy is picking up speed on the road to recovery. Mind the bumps and potholes, though.

Fueled by strong demand for U.S. exports, a rebound in household spending and growing confidence among businesses and consumers, the U.S. economy posted solid growth in the last three months of the year, the government reported Friday.

The economy grew at a 3.2 percent annual rate, the Commerce Department said, after expanding at a 2.6 percent pace in the third quarter. The rise was a touch below economists' expectations for a 3.5 percent rate.

Saturday's NY Times tried to paint a somewhat rosy picture by focusing on job postings

But often, before hiring occurs, a job is posted on a Web site of some sort. If we look at job-posting numbers — a more recent snapshot of employers’ needs than the hiring data — the picture is more encouraging across a range of industries.

At Simply Hired, a job search engine, postings rose more than 50 percent last year over 2009, and they increased almost 70 percent in December 2010 over December 2009.

They wind up pointing out that a lot of the jobs are in select metropolitan areas and not nationwide. And of course, they include:

A persistent problem is that many of the unemployed don’t have skills that are in demand, Mr. Forster said.

Saturday's NY Times also had an article on President Obama now becoming "Cheerleader in Chief":

Gone was the president who told the nation in his inaugural speech that it was “time to set aside childish things,” and who spent much of his first two years bemoaning the mess his predecessor had left. In his place was an upbeat and forward-looking Mr. Obama, serving up rosy economic news (“The stock market has come roaring back”) and lauding America’s greatness and can-do spirit. (“We do big things.”)

It was perhaps no accident that Mr. Obama took Lou Cannon’s biography of that other optimist and purveyor of American exceptionalism, Ronald Reagan, with him to Hawaii over Christmas. Or that one of the Washington wise men the president consulted recently was Kenneth M. Duberstein, a chief of staff to President Reagan.

Yeah, good old Norman Vincent Peale Power of Positive Thinking will always solve the problem, right?

Uh, no it won't.

Today's (Wednesday February 2) Washington Post had a column by Steven Pearlstein that seems to be somewhat grounded in reality. First is the recognition of the burden of healthcare costs on the economy:

After a few presentations, it didn't take participants long to conclude that one issue seemed to be at the root of all the others: a steep, relentless rise in health-care costs that has crowded out other public- and private-sector investments. Until medical costs are contained, they concluded, there would be no money for anything else.

Then a recognition that everything that has been so wonderful in the economy for the past twenty to thirty years is most likely a chimera:

Although the United States spends at least twice as much on health care, per person, as other industrial countries do, Americans do not live any longer and often have measurably worse health.

Although spending on education has doubled in recent decades, average scores on standardized math and reading tests have remained about the same.

And what does the average American have to show for all that innovation and job growth in financial services over the past 20 years? A series of booms and busts that has left stock prices roughly where they began.

I don't always agree with Mr. Pearlstein but today I do believe he is spot on.

And because I can: