Bernanke wrings his hands on jobs. Market reacts favorably.

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So. Federal Reserve chairman Ben Bernanke gave a speech this morning.:

My remarks today will focus on recent and prospective developments in the labor market. We have seen some positive signs on the jobs front recently, including a pickup in monthly payroll gains and a notable decline in the unemployment rate. That is good news. At the same time, some key questions are unresolved. For example, the better jobs numbers seem somewhat out of sync with the overall pace of economic expansion. What explains this apparent discrepancy and what implications does it have for the future course of the labor market and the economy?

Importantly, despite the recent improvement, the job market remains far from normal; for example, the number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above what most economists judge to be its long-run sustainable level. Of particular concern is the large number of people who have been unemployed for more than six months. Long-term unemployment is particularly costly to those directly affected, of course. But in addition, because of its negative effects on workers' skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.

Once again, it seems to be a speech that depends on the individual perspective as to the take-away. David Dayen at FDL News titled it "The “Better But Not Good Enough” Economy Conundrum" and it follows a pattern from earlier speeches. Last June, I wrote a post after a Benbernank speech that appeared to be at least four different speeches, depending on the spin. Getting it down to only two spins is a bit better. The problem I have with Bernanke and his speeches is that while he talks about the problems of the long term un and underemployed, he never really seems to get around to doing anything about it, even while "pursuit of maximum employment" is part of the stated Federal Reserve mission.

While it appears that the folks on Wall Street and the various stock exchanges loved Bernanke's speech, it has been obvious to anyone paying attention that Wall Street and the various stock exchanges don't really have much of a connection to the real world economies. As Dayen notes in his post:

The problem is that many believe that the Fed’s monetary policies have not been accommodative enough to match the deep hole in economic performance. The other reason some became alarmed by Bernanke’s speech is that he accurately but incompletely touted the labor market recovery, with its 250,000 increase in private market jobs on average over the past three months. Bernanke goes through all the positive indicators and only at the end gets to the negatives, like the 5 million payroll jobs below peak, the still-elevated unemployment rate, and most importantly the shrinkage of the employment-population ratio and the labor force participation rate. Brad DeLong thinks that Bernanke is “preparing to declare victory,” and that “To transform cyclical into structural unemployment is not a victory for policy.”

Amazingly enough, just last month, The Benbernank testified before both the House and the Senate where the Republicans in both chambers took him to task for (from the NY Times House article):

WASHINGTON — Congressional Republicans criticized the Federal Reserve on Thursday for working to reduce unemployment and revive the housing market rather than maintaining a single-minded focus on inflation.

And from the Senate article, also via the NY Times:

Senate Republicans on Tuesday, like their colleagues in the House last week, expressed concern that the Fed effectively was declaring that it would prioritize job growth over inflation.

I guess the folks in the House and Senate would just as soon not deal with the problems of 25M to 30M un and underemployed. They must not think we vote. Or matter.

In the immortal words of Mr. Pierce

Fck the deficit! People got no jobs. People got no money!

And because I can:

Tax Cuts and Gutting of Environmental Regulations Create Jobs?

Well, well. According to today's (Thursday, March 10) NY Times, Republicans are becoming a bit sensitive at charges that they really have done virtually nothing to improve the employment situation in the US; especially after having run as jobs creators. Matthew Desmond at addictinginfo.org offers a pretty good list of what the US House has been doing instead of working on jobs for the un and underemployed but as I noted previously, a lot of their efforts have been primarily directed at destroying jobs related to government service. So what are they going to do? From the Times article:

Mr. Camp said Republicans were strongly encouraging the Obama administration to move forward with free trade pacts that could lead to 250,000 new hires. He noted that half of the eight hearings held by his panel this year were devoted to simplifying and overhauling the tax code to stimulate economic growth. He said he had been in touch with Senator Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, about moving forward with tax law changes.

“Fundamental tax reform is key,” Mr. Camp said. “It is a critical issue for us to work on.”

Mr. Upton said the chief job-creating focus of his panel had been to identify and move to block regulatory efforts by the Obama administration, and specifically the Environmental Protection Agency, that he said would strangle the economy.

Free trade agreements. Tax cuts. Blocking the EPA from protecting people and the earth. Yet there are people who will believe it against all the evidence otherwise. Just last week, Princeton Economics professor Uwe Reinhardt, used a post on the NY Times Economix blog to try to justify Free Trade as overall good for the world without addressing all the ways it is bad for the US. This post was in response to one he had written in February extolling global free trade.

February Jobs Reports Coming Out

Since today (Wednesday March 2) is the first Wednesday of the new month, Automatic Data Processing (ADP) has released their monthly report estimating the new jobs for February for the private sector. As always, the economists were surprised. From Reuters:

(Reuters) - Private sector employers added more jobs than expected last month in a sign of steady improvement in the labor market, ahead of the closely watched non-farm payrolls report from the Labor Department on Friday.

Employers added 217,000 jobs in February, the ADP Employer Services report showed on Wednesday, above expectations for a rise of 175,000. January's figure was revised higher by 2,000 to 189,000.

Economists said the private-sector hiring indicates improvement in the labor market, though they noted the month-to-month changes in ADP's report are not always good predictors of Friday's larger jobs numbers.

There is a quite simple explanation for why the month-to-month changes in the ADP report do not predict the larger report from the DoL Bureau of Labor Statistics. The BLS reporting includes jobs from all levels including the public sector which has been laying people off even as the pace of hiring has picked up a bit in the private sector.

Of course, even as there was some new hiring in February, layoffs also continued with Reuters also reporting this morning on a report from consultants Challenger Gray & Christmas on an increase in February of the numbers of planned layoffs:

(Reuters) - The number of planned layoffs at U.S. firms rose in February to its highest level in 11 months as government and non-profit employers let workers go, a report showed on Wednesday.

Employers announced 50,702 planned job cuts last month, the highest level since March 2010 and a jump of 32 percent from January's 38,519, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were 20 percent higher than the 42,090 announced in February of last year, marking the first year-over-year increase since May 2009.