Article on American Economy and the outlook on Jobs

[Jul]

http://www.economist.com/world/na/PrinterFriendly.cfm?Story_ID=2501977

Smile, these are good times. Truly

Mar 11th 2004 | WASHINGTON, DC
From The Economist print edition


Anxiety is turning to paranoia about jobs. Take a deep breath: most Americans have rarely had it better

Get article background (http://www.economist.com/background/displayBackground.cfm?story_id=2501977)

ANOTHER month, another dismal set of job figures. America pulled out of its last economic recession way back in November 2001, yet the country's “jobs recession” finished only last autumn, by when 2.7m jobs had been lost since the start of the slowdown. Now, though economic growth has bounced back, new jobs refuse to do the same in this, the third year of recovery. In February, a mere 21,000 jobs were created, according to the official payroll survey, at a time when George Bush's economists forecast 2.6m new jobs for 2004. Mounting alarm at the White House, and increased calls for protection against what a growing number of Americans see as the root of most ills: the “outsourcing” of jobs to places like China and India. Last week the Senate approved a bill that forbids the outsourcing of government contracts—a curious case of a government guaranteeing not to deliver value-for-money to taxpayers. American anxiety over the economy appears to have tipped over into paranoia and self-delusion.

Too strong? Not really. As The Economist has recently argued—though in the face of many angry readers—the jobs lost are mainly a cyclical affair, not a structural one. They must also be set against the 24m new jobs created during the 1990s. Certainly, the slow pace of job-creation today is without precedent, but so were the conditions that conspired to slow a booming economy at the beginning of the decade. A stockmarket bubble burst, and rampant business investment slumped. Then, when the economy was down, terrorist attacks were followed by a spate of scandals that undermined public trust in the way companies were run. These acted as powerful headwinds and, in the face of them, the last recession was remarkably mild. By the same token, the recovery is mild, too. Still, in the next year or so, today's high productivity growth will start to translate into more jobs. Whether that is in time for Mr Bush is another matter.

As for outsourcing, it is implausible now, as Lawrence Katz at Harvard University argues, to think that outsourcing has profoundly changed the structure of the American economy over just the past three or four years. After all, outsourcing was in full swing—both in manufacturing and in services—throughout the job-creating 1990s. Government statisticians reckon that outsourced jobs are responsible for well under 1% of those signed up as unemployed. And the jobs lost to outsourcing pale in comparison with the number of jobs lost and created each month at home. Even here, the rate of job “churn” has, for unclear reasons, been falling since mid-2001.

Waiting for the job recovery might be a good time to take a broader measure of the material well-being of Americans. Their condition is widely held to be perilous. The economy, it is said, is being “hollowed out” by international competition and the connivance of business and political elites, creating “two Americas”, one rich, one poor. Median income of American households, commentators often say, has been stagnant, though census figures give a rise of one-fifth since 1980. Lou Dobbs, on CNN's “Lou Dobbs Tonight”, is just one media fabulist who makes his living by claiming that, as America is being “exported”, so the well-being of middle Americans is in a parlous state.

It is a good story, but false on many levels. For a start, this slow growth in median income overlaps with a scale of immigration into America outpacing all immigration in the rest of the world put together. Many immigrants have come precisely to take up the lowest-paid jobs. As a result, in the 20 years to 1999 some 5m immigrant households were added to those defined as below the poverty level. Yet among native-born Americans, poverty rates have declined steadily since the 1960s. In the case of black families, median incomes have recently been rising at twice the pace for the country as a whole.

Strip out immigrants, and the picture of stagnant median incomes vanishes. Indeed, for the nine-tenths of the population that is native-born, middle-income trends continue their improvement of the 1950s and 1960s. For these people, inequality is not rising, but falling. Gregg Easterbrook cheekily points out in his excellent recent book, “The Progress Paradox” (Random House), that if left-leaning Americans seriously want better statistics about middle-income gains, then they should simply close their borders.

Mr Easterbrook points to something else about the figures for median household income. A quarter-century ago a typical household had three members. Today, it has just 2.6 members. Simply by this effect, median households have seen their real incomes rise by a half.

Another measure of improved well-being is increased access to jobs. Between 1980 and 2002 Americans in work rose by over 40%, a far brisker pace than the 26% growth in the population. Some three-quarters of the adult population are now in work, close to a record and some ten percentage points higher than in Europe.

One reason is more teenagers in work: over the same period, teenage employment grew by nearly two-thirds. As Andrew Hacker points out in the New York Review of Books, teenagers are a significant source of low-paid labour in supermarkets, shopping malls and fast-food franchises. Exploitative? Hardly, since it helps them buy cars and independence.

Yet the chief reason for higher participation is more women in work, notably married women. Very roughly, in the past half-century the average weekly hours worked by married women have tripled, while hours worked by men and single women have stayed about constant. The usual reason given is that married women have had to work so that families can make ends meet. A recent study (http://www.minneapolisfed.org/research/sr/sr317.html) by three economists, Larry Jones, Rodolfo Manuelli and Ellen McGrattan, published by the Federal Reserve Bank of Minneapolis, punctures that notion. They find that the tripling of married women's hours can be explained entirely by a gender wage-gap that has narrowed. That is, a smaller pay differential between men and women gives married women sufficient incentive to invest in education and careers.

Of course, many American households struggle to survive on minimum-wage jobs with employers who do them few favours. We will look at low-paid work in a future week. What this piece attempts to argue is that the middle is far from being hollowed out. As Mr Easterbrook emphasises, most Americans have at least two cars and their own house, and they send their children to college. Certainly a bigger share of household income is being spent on things that did not feature 50 years ago, such as high-tech health care. But it has brought the benefit of a longer and better life, and not just for the old: since 1980, infant mortality has fallen by 45%.

At the end of last year, America's household wealth, at $44 trillion, passed the previous peak set in early 2000. With Americans wealthier than ever, why are many so anxious? Perhaps they think prosperity will vanish in a puff of terrorist smoke or a housing-market collapse. Perhaps, tentatively, the suburbs, in which half of Americans live, are to blame. For the suburbs fulfil the American dream, but at a price. On the one hand comes greatly increased space: the typical American dwelling now has two rooms per person, double Europe's level or America's half a century ago. On the other hand, expectations grow for every family member to have her own computer, DVD player—and another car. Pile on top of that an annual family holiday by plane, a bass-fishing boat (Americans spend $25 billion a year on boats and jet-skis) and regular meals out (Americans now spend nearly half their food dollars in restaurants). The American dream may cost less than it used to, but it still comes dear. And in a sated society, there is less and less new to look forward to.

[waltersgirl]

thanks for the link Jul.;)

[stellar]

I think that corporations will begin to re-hire once productivity starts to decline. Once productivity inevitably goes down then x number of jobs will increase to x+y number of jobs. After 18 mos, or so, the number of jobs will go back to x, or slightly above x, because the corporations will have fired most of the labor force in the original x.

I.e., if you've got some shmoe outside digging a hole in the ground, eventually he'll get tired and so you hire another shmoe to give him a hand. Once shmoe#1 trains shmoe#2 to dig the hole - you fire shmoe#1 and decrease your payroll expense; as an added bonus shmoe#2 digs faster because he doesn't want shmoe#3 to take his place - but eventually shmoe#3 will come along... nobody can dig forever.

Now, you would think that you would keep on shmoe#1 and put him on another hole, but there's another route. See, you can get 5 Indians and 5 Chinese to dig holes for what it costs you for 1 American shmoe. Holedigging, once a good job with sustainable income and good benefits is now a "low-paying job". Not because the market set the cost of labor, but because you did - you smart devil you. You influenced the market to increase competition between cheap foreign labor and American shmoes. Shmoe#3 is now digging at break-neck speed, 16 hours a day for $4/hr and his Indian and Chinese equavalents are now down to 6 people for one American shmoe instead of 10. Shmoe#1 and shmoe#2 both found new jobs, although much lower paying... but that's ok because now the supermarket is importing beef from Thailand and meat is cheap. Of course, you can only see American cattle farmers in old Westerns, but who cares... it's 14-cents a pound.

Still, the goverment hasn't given up on us shmoes. They're going to re-educate us. They're going to teach us how to speak Chinese and Hindi.

As for illegal aliens coming here to assume low-paying jobs... if there were no exploitalble, slave-like, labor force then those jobs would adjust with the market and wouldn't be low paying.

[Jen10122]

hi all,

I'm sorry I just can't beleive that B.S. Most of you all have jobs that's why you can believe this article. But, if you were in my shoe you would feel the same way that I do about the job market. My mom starting looking for work again today and she really found nothing but what she has already app. for. And you telling me that's better? How is that better? It's getting worest then better. It's getting to the point where it's starting to look like my mom wouldn't get another job. How is that a good thing?

[generic_screenname]

The economy blows. I'm gonna go live on the moon. Who's with me?

[NebariNookiee]

A plant in Marion IN closed today and put another 1000 people out of work. I also here that Amtrack facility in Beech Grove may close by the end of the year. Oh yeah -- the job market just get's better and better doesn't it... This article doesn't say anything of real value.

edited to add: 21,000 may look go on paper -- but when you have hundreds of thousands of people out of work it kinda pisses on your corn flakes.

[Jen10122]

And can you tell me how the economy is getting better? When we have to turn off cable, net, and services on the telephone to live. When we have to get rid of our pets just to get the money to last. How is that better? I just don't see it getting any better at all. And where getting to the point where we mite have to sell what we have in the Apt just to live. Where it getting to the point when my mom is giving up on the job market and her life. Does that sound like it's getting better to you?

[DRD2001]

I'm afraid that I am not optimistic about the economy either.
Perhaps it is getting better for people with certain job skills or educations, but our mills are going belly up down here. When Springs closed, that was another 5K out looking for jobs in a market that has been trying to support the unemployed from all the smaller mills that shut down first. I know people who are desperately scrambling to make ends meet, and the relief, charitable and church organizations are already tapped out and overwhelmed and begging for help. For the older, unskilled laborer, who only has a high school diploma, times are still very very hard. And most of these people I am seeing are 50+, and labeled as "high-risk" and not a good candidate for employment.

I'd love to see the economy get better in my neck of the woods.

[Jen10122]

yeah, I know what you mean. My mom will be 50 come June 2 and she only has a High School deploma. That is why she doesn't have that much hope of finding work. All I know is that 8.4% of NYC is out of work. And that is really bad. But, she going to keep looking for work until her money runs out.

[fermicat]

This is anecdotal evidence to be sure, but I have had three talented, educated friends in three different fields become unemployed and two of them are still looking. One is an engineer/materials scientist who has been unemployed (and looking) since the beginning of November. She sends out lots of resumes but hasn't gotten even ONE interview. She's got a masters degree, a good and relevant work history and is good at what she does. She is willing to relocate. But nada, so far. Another friend has been out of work for nearly two years and is getting by on contract work and temp jobs. No benefits, of course. And still no prospects. She used to manage the office and website of a small non-profit (which went under due to the lack of corporate donations when the economy turned sour). Again, very talented and well-spoken person who cannot find a decent permanent job. The third person is a lawyer who was out of work for about 6 months. He finally got a job at a much smaller firm, for less money than his previous job, when he gave up trying to get in with the first tier firms.

Apparently companies are less willing to offer relocation costs and other start-up perks that used to be standard. That is what I am hearing from my friends who are still looking for work. And my own company is less willing to hire non-local people because there is no need. Plenty of people in a reaonsable distance apply for each opening so why should be go through the trouble?

[LadyCrais]

That 21,000 last month is a really intersesting figure. It turns out that there were 21,000 new government jobs created that month. There actually were private sector jobs created that month, but they were balanced with an equal number of job losses. So the net gain for the month coincidentally turned out to be the same number of jobs that the federal government created.
I didn't bother to post the article that discussed it when I read it because it would have just started more political infighting.

The article is also trying to prove a premise that any number of other informed articles have shown to be poppycock throughout the years. I don't know how the younger generations are doing, but something key about my generation (pushing 50 now) is that we're the first generation in US history that has not automatically improved on our parents accomplishments economically. In the past, each generation has been able to essentially assume that it would surpass their parents financially. This ties in with one of this article's most offensive claims about why women are in the work force.

They find that the tripling of married women's hours can be explained entirely by a gender wage-gap that has narrowed. That is, a smaller pay differential between men and women gives married women sufficient incentive to invest in education and careers.

What a load of dren. No doubt, as usual, statistics can be manipulated to prove anything you want to prove. But the fact remains that the average job no longer pays enough to support a spouse and children, certainly if there's a desire to send those children to college, which has turned into an exorbitant expense nowadays. While most families probably wouldn't starve without two incomes, they couldn't even approach the standard of living under which they were raised without doing so, which has always been a standard expectation in this country. And frankly everyone I know in low paying jobs is holding down one if not two other part time jobs to make their ends meet. Which is a real shame given how many others are having to survive with no job at all. But it speaks volumes as to just how far those single incomes go.

Then there's this exporting call centers crap. Am I the only person that isn't just totally offended that when you call a company for customer service it's all but impossible to get a native english speaker? It hasn't been until this stuff was in the news recently that I had any idea that's why customer service has become such a nightmare. I at least had assumed that those foreign accents answering the phone were located within the country. That those were the kind of jobs that immigrants were able to get. It never dawned on me that day when I requested to speak to someone who's mother tongue was english because I couldn't understand a word the woman was saying, that that was an impossibility because she wasn't even in the same country I was in. This inability to understand most of the people you talk to when you call customer service for a company has been something that's become more and more common in the past 3-5 years. It made me mad enough as it was to wonder why I always got the same garbled accent. Now it just royally hacks me off when I come to find out it's because the company is too busy cutting corners and saving a buck because they really couldn't give a rat's a$$ whether I, as the customer, am receiving any service or not.

[stellar]

The testimnoials here just show one thing at least. The economists who wrote this article are so woefully out of touch with reality it's not funny.

I'm employed and grateful for it, but am making about $10k-$15k below my market salary. Even still, there are two Indians at my job level, with whom I work. They each have more education than I do, are here on H1B visas and make half what I do. Effectively, their visa status is being viewed as a subsidy for which they can take less salary. Corporations like this notion very much and are currently trying to increase the amount of H1B visas that can be issued.

I'll be on the moon with g_s.

[fermicat]

Statistics lie on the true cost of living
By Robert Kuttner, 3/17/2004

WHAT IS THE MATTER with the whiny American voters? They keep telling pollsters that they think America is on the "wrong path." But don't they read the statistics? Don't they know that unemployment is at a comfortable 5.6 percent, that inflation is almost nonexistent, that the economy is growing smartly at around 4 percent?

These happy statistics, alas, don't accurately capture the economic reality of ordinary people. Take inflation. It's true that measured inflation is very low, but look at all that's left out.

In the case of health care, the government's consumer price index tracks the cost of medical services. But it is less precise about tracking who pays for them. If your employer's health plan is increasing your share of premiums and cutting the company's contribution or if the plan is increasing out-of-pocket charges or reducing what drugs it will cover, this shift is accounted for indirectly, after a lag of two years. But it hits your pocketbook immediately. And if rising medical costs deter you from seeing the doctor, that doesn't show up in the index at all.

Or consider housing. There are parts of the country where housing prices have been declining for a decade because few people want to move there. Statistically, these declines get averaged with astronomical housing costs in major metropolitan areas to show only modest average housing inflation. Around big cities, prices have plateaued at very high levels that are plainly outstripping incomes. Try telling a young person in Greater Boston or New York or LA that there's no serious housing inflation or that rents have not increased faster than earnings.

Another case of hidden inflation: A great many people in late middle age find themselves subsidizing their newly launched young. The causes of this trend are multiple: low starting salaries, skyrocketing rents, and the high cost of college tuitions and health insurance. Is this a dent in the cost of living for the middle aged? You bet. Does it show up in government statistics? Nope.

The inflation numbers also fail to capture pocketbook realities for retired Americans. A low official inflation rate plays a cruel trick on seniors. For starters, it means that cost-of-living adjustments in Security Security checks are mere pocket change. One new prescription can more than eat up this year's Social Security increase.

Further, a low rate of inflation translates into a low interest rate on savings accounts, Treasury securities, and other prudent investments for the elderly. Moreover, older people on fixed incomes who are not homeowners are also at the mercy of rising rents.

And the same deficiencies in the consumer price index that fail to capture cost shifting in health care particularly affect the elderly, who spend a disproportionate share of their income on doctor's bills, hospital costs, and drugs.

Or take energy costs. Gasoline is near an all-time high. That doesn't affect the overall index much because energy costs are a relatively small share of average total consumer spending. But if you need your car for your business, you certainly feel it.

Then we have the unemployment numbers. Nominally, unemployment is a nice, manageable 5.6 percent -- about where it was during much of the booming 1990s. But that statistic leaves out all the people who left the labor force because they gave up on ever finding a job. If you include those, the real unemployment number is more like 7.7 percent. The proof of the soft job market is that earnings have not kept up with inflation. In 2003, the official inflation rate was 2.3 percent. The median wage increase was just 2 percent. And the 2004 statistics are likely to be worse.

the balance of the editorial can be found here: http://www.boston.com/news/globe/editorial_opinion/editorials/articles/2004/03/17/statistics_lie_on_the_true_cost_of_living/

[stellar]

Originally posted by fermicat
Nominally, unemployment is a nice, manageable 5.6 percent -- about where it was during much of the booming 1990s. But that statistic leaves out all the people who left the labor force because they gave up on ever finding a job. If you include those, the real unemployment number is more like 7.7 percent.

This is absolutely spot on and denial-style economists are fast to correct someone when they say "15-million people are out of work". "No," the DS economist will tell you, "we don't count the people who left the job market."

Plus, people like Steve Forbes, a man somewhat removed from the rigors of labor, go even further and question the 5.6% saying that if the survey is conducted in a slightly different way (household survey) then the number is even lower and things are even better.

They can't see the forest for the bar graphs.

[DentArthurDent]

bottom line is that there is an inherent disconnect between personal evidence that you yourself know about specific people and statistically large groups of faceless strangers... and that is the problem. Economists never rely on single anecdotal evidence because you can't see a trend, but trends cannot see how desperate an individual is. I make a good living but I am ALWAYS this close >< to a layoff. And then I might well be out of luck for a long time, because jobs are scarce in many technical fields... And did anybody take into account how the loss of a job ripples ?
I mean if things get tight, I'd stop eating out, fix the hole in my jeans instead of buying a new pair, etc... so it becomes a spiral...

[db11]

Originally posted by stellar
I think that corporations will begin to re-hire once productivity starts to decline. Once productivity inevitably goes down then x number of jobs will increase to x+y number of jobs. After 18 mos, or so, the number of jobs will go back to x, or slightly above x, because the corporations will have fired most of the labor force in the original x.

I.e., if you've got some shmoe outside digging a hole in the ground, eventually he'll get tired and so you hire another shmoe to give him a hand. Once shmoe#1 trains shmoe#2 to dig the hole - you fire shmoe#1 and decrease your payroll expense; as an added bonus shmoe#2 digs faster because he doesn't want shmoe#3 to take his place - but eventually shmoe#3 will come along... nobody can dig forever.

Now, you would think that you would keep on shmoe#1 and put him on another hole, but there's another route. See, you can get 5 Indians and 5 Chinese to dig holes for what it costs you for 1 American shmoe. Holedigging, once a good job with sustainable income and good benefits is now a "low-paying job". Not because the market set the cost of labor, but because you did - you smart devil you. You influenced the market to increase competition between cheap foreign labor and American shmoes. Shmoe#3 is now digging at break-neck speed, 16 hours a day for $4/hr and his Indian and Chinese equavalents are now down to 6 people for one American shmoe instead of 10. Shmoe#1 and shmoe#2 both found new jobs, although much lower paying... but that's ok because now the supermarket is importing beef from Thailand and meat is cheap. Of course, you can only see American cattle farmers in old Westerns, but who cares... it's 14-cents a pound.

Still, the goverment hasn't given up on us shmoes. They're going to re-educate us. They're going to teach us how to speak Chinese and Hindi.

As for illegal aliens coming here to assume low-paying jobs... if there were no exploitalble, slave-like, labor force then those jobs would adjust with the market and wouldn't be low paying.

Part of the problem has, indeed, been the rapid rise of productivity, but I don't think that the job market will come back until demand starts bumping up against industrial capacity. The first sign of that will be when inflation starts to rise, as businesses can no longer meet the growing demand in the economy and prices begin to increase as a result. That hasn't happened yet and until it does, you won't see increased employment. So if you want to know when the labor situation is going to turn around, keep an eye on the CPI.

[B Sharp]

I think all the posts here are part of the story- we're all correct. I think that the article that Jul posted is 100% correct as far as it goes, and the subsequent posts and articles are also 100% correct. Reality is a complex beast, and our perceptions are limited and colored by our personal circumstances. Since I work in one of those big companies and have to make choices about some of this stuff, some of the posts here made me feel a little defensive, but as an employee it also resonated pretty strongly with my fears and concerns about the future.

Yep, it's true- companies have a goal of making money, and we outsource if the effect is positive for shareholder value. Sometimes we do things that are better in the short term than in the long term, but we can always adjust later if that's so. If we don't maximize for shareholder value (lower costs, increase revenue), we'll be replaced.

In addition- companies are made up of people- not machines. We are employees, and there isn't some faceless machine running the company. The people with power to make choices have souls, and care about more than their own personal situation- if they don't, they can't lead, and lack of leadership means poor performance.

And yes, not everyone is able to get a job they like, or that best utilizes their education, skills and training. And no, we're not getting paid as much as we'd like. Many large companies are being conservative about raises and promotions and such, and will continue to operate that way until sustained growth takes place- it's that pesky shareholder value stuff again.

And yes, the global marketplace is a reality. People in other countries are well educated, and they get paid less than we do for the same amount of work. They also probably live in a different time zone, so if you employ them, they can work on fixing problems while consumers and employees in the US are asleep. In business terms, that's called an opportunity.

And yeah, this all sucks sometimes, and I wish I could give more people jobs, and I wish I had more job security and that I get a raise this year. But I can't, and I don't, and I doubt that I will. As far as the pundits go, they're paid to get readership/ratings, not to be correct; they're also humans and have the same limits on capacity and understanding as the rest of us- so I try to take that into account when I read/see anything.

my 2 cents. OK, it was more like 50cents....

[generic_screenname]

I think all the posts here are part of the story- we're all correct. I think that the article that Jul posted is 100% correct as far as it goes, and the subsequent posts and articles are also 100% correct.

So you're saying, "It was the best of times. It was the worst of times"?

[B Sharp]

Originally posted by generic_screenname
So you're saying, "It was the best of times. It was the worst of times"?

or per the pants thread, "it was best of pants, it was the worst of pants."

Yeah, that's sort of what I attempted to say.

[Jen10122]

WASHINGTON (March 17) - Consumer prices rose by a modest 0.3 percent in February as high energy costs continued to hit the pocketbooks of drivers filling up at the pump and people heating their homes.


The increase in the Consumer Price Index, the government's most closely watched inflation measure, however, marked a slowdown from the 0.5 percent jump registered in January, the Labor Department reported Wednesday.

Excluding energy and food costs, ''core'' consumer prices rose by just 0.2 percent in February for the second month in a row. That suggested the prices for many goods and services were fairly stable.

Federal Reserve Chairman Alan Greenspan and his colleagues said inflation is not a problem for the economy. That's one of the main reason why Fed policy-makers have leeway to hold short-term interest rates at a 45-year low of 1 percent, as they did on Tuesday.

''With inflation quite low and resource use slack, the committee believes that it can be patient in removing its policy accommodation,'' the Fed said. Some private economists viewed that language, along with the Fed's concerns about slow job growth, as meaning Fed policy-makers may not move to raise rates until 2005. Short-term rates have been at 1 percent since June.

The 0.3 percent increase in the CPI in February matched economists' forecasts. The 0.2 percent rise in ''core'' prices was slightly bigger than the 0.1 percent increase they were calling for.

Energy prices went up by 1.7 percent in February. While that marked a slowdown from the big 4.7 percent rise reported for January, there is little doubt that consumers continue to feel the sting of higher energy bills.

Gasoline prices increased by 2.5 percent, natural gas prices were up by 2.2 percent, fuel oil prices rose 1.1 percent and electricity prices edged up 0.2 percent last month.

Strong global demand and tight supplies have pushed energy prices up. Looking ahead, some analysts foresee higher prices at the gasoline pumps this summer.

Food prices, meanwhile, increased by 0.2 percent in February, after being flat in January. Rising prices for fruits and vegetables outweighed falling prices for beef and veal, pork, poultry and dairy products last month.

Elsewhere in the report, airfares rose 1.2 percent and new car prices rose 0.4 percent in February.

Costs for doctors' services jumped by 1.1 percent in February - the largest increase since May 1993. Prices for college tuition and fees increased by 0.5 percent in February. Rising costs for medical services and for education have been fairly constant sore spots for consumers.

Clothing prices, however, dipped by 0.1 percent, computer prices dropped by 1.2 percent and lodging costs fell by 1.6 percent in February, offering some relief to peoples' wallets.


AP-NY-03-17-04 1032EST


Hi, I can't give you a link because I got this from aol news

[Jen10122]

WASHINGTON (March 12) - Inventories at U.S. businesses rose by less than expected in January, data released by the government showed on Friday, but still managed to post their fifth consecutive monthly gain.

The Commerce Department said inventories gained 0.1 percent in January after a 0.3 percent gain the previous month. Business sales advanced 0.4 percent after December's revised 1.4 percent increase, which was initially reported at 0.9 percent.

Wall Street had expected stocks to rise 0.4 percent.

Retail inventories, the main new information in the report, rose 0.1 percent after December's 0.3 percent advance.

The stock-to-sales ratio, which measures how long it would take to work down stocks at the current sales pace, stood unchanged at a record 1.33 months' worth. December's ratio was originally reported as a record 1.34 months.


08:32 03-12-04

I also got this one from aol news

[Jen10122]

NEW YORK (March 17) - Bank of America Corp. plans to cut as many as 13,000 jobs as it completes its $47 billion acquisition of FleetBoston Financial Corp., according to a newspaper report.


Get Quote, Company Info: BAC | FBF
Discuss: Bank of America | FleetBoston

The cuts will coincide with the expected completion of the purchase next month, The Wall Street Journal reported in Wednesday editions, citing unidentified people familiar with the plans.

The cuts would come through layoffs and attrition from the operations of both banks and amount to about 7 percent of their combined work force of 181,000, the report said.

Shareholders of the banks were to meet Wednesday in Charlotte, N.C., and Boston to approve the acquisition, which was approved by the Federal Reserve Board on March 8.

Calls to Charlotte-based Bank of America and Boston-based Fleet were not immediately returned early Wednesday.

Last week, an analyst predicted that Bank of America might have to cut as many as 11,000 jobs to attain the level of cost reductions pledged by chief executive Ken Lewis when the bank announced the Fleet purchase.

Lewis said he expects to achieve about $1.6 billion in cost savings by the end of 2005.

''It's reasonable to assume 9,000 to 11,000 (job cuts) to reach a cost savings of about $1.6 billion, Gerard Cassidy, an analyst at RBC Capital Markets, told The Associated Press last week.

''Attrition obviously plays a role in this, and you also have to assume that Fleet is not actively hiring new people right now,'' Cassidy said. ''There will be a lot of vacant jobs, so the actual number of pink slips handed out will not be that many.''

The two banks don't have a large number of overlapping branches that can be closed, which is a major source of savings in many bank mergers. Instead, about $650 million in savings will come from trimming overlapping operations and processes.

The two banks have agreed to pay $675 million to settle civil fraud charges related to improper mutual-fund trading, in a deal reached with the Securities and Exchange Commission and New York Attorney General Eliot Spitzer.


AP-NY-03-17-04 0431EST

I also got this from aol news

[Jul]

The two banks don't have a large number of overlapping branches that can be closed, which is a major source of savings in many bank mergers. Instead, about $650 million in savings will come from trimming overlapping operations and processes.

I don't want to sound impersonal on this, because I feel for the people that will get laid off, and I also have familiy members who feel threatened by outsourcing, but it's logical that when two companies merge, they're going to streamline and get rid of redundancy to save money.. that's the nature of business :shrug:

and the funny thing is that the national unemployment rate in the US is 5.5% right now. That doesn't take into account the different unemployment rates nationally, like in Ohio where it is higher. Lower than most countries in the world and it's actually a low rate for us... and what isn't shown in that rate is new businesses that hire, as it takes time before their numbers are integrated by reports... Additionally, it's been shown that some of the jobs that are being lost are lost because the economy has evolved and those jobs are no longer needed.. those people need to be retrained into new occupations.

Lastly, the thing that is costing business the most nowadays is healthcare. I heard a report on NPR the other day that said that just few years ago, GM paid over 3 billion dollars for healthcare of it's employees and retirees.. this year, they're paying well over 6billion dollars for healthcare... That's double the cost.. if they're paying that much, imagine how it's risen for other companies and why they'd rather not hire as many people.. can they afford to keep them?? And here in CA the worker's compensation laws changed to double the percentage a company has to pay for worker's comp and the taxes had been raised on them as well. When you have to pay that much, some businesses find its not worth doing the business here because they can't make money...Companies are leaving to go to Nevada where there are no taxes...

Lastly, our economy entered a recession during the last 9 months of President Clinton's term, then we got hit by 9/11 whose effects had a devestating ripple through our country and our economy... we've just come out of the recession, but it has always taken jobs longer to recover than the recession part of the economy. Considering the fact that 9/11 hit one of our country's most important business centers, I'm surprised we're not doing worse than we are...

[Jul]

and for anybody that wants to see a chart of what unemployment rates have been in the last 15 years, let me point you in the direction of the US Bureau of Labor Statistics:

http://data.bls.gov/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

and I encourage you to set the graph to many different years to get an idea of what the trends been like..

I did one from 1980 to 2004 here's what it looks like:

[Jul]

P.S. - take note of when the unemployment rate spikes in the last 4 years, it's the period immediately following the events of 9/11.

[stellar]

:)

[grinner]

Also Jul... that information does not take into consideration Small Businesses. If the Small Business hirings were added in... there would be even LOWER rate of unemployment. The Government does not monitor those that leave the 'Job Force' to start a business... they are only marked as unemployed.

[Jen10122]

NEW YORK (March 18) - A closely watched indicator of future economic activity remained unchanged in February, but at a high enough level to signal more strength in the economy and job growth on the horizon, a private research group reported Thursday.

The Conference Board said that its Composite Index of Leading Economic Indicators held steady at 115.1 last month, following a downwardly revised gain of 0.4 percent in January. The report was in line with what analysts were expecting.

The indicator, which forecasts trends in the economy over the next three to six months, remains 3.3 percent above its previous peak reached in May 2002.

The Conference Board said that six of the 10 elements of the leading index increased in February.

The group also reported that its coincident index, a snapshot of the current state of the economy, rose by 0.3 percent in February, following a downwardly revised 0.1 percent gain in each of the prior two months.

Ken Goldstein, the Conference Board's economist, said that the continued strong levels of consumption and investment should begin to result in stronger job growth.

''What is unusual about the current business cycle, however, is the delay between the strengthening economy and the hiring of new workers,'' Goldstein said. He said that hiring should start to improve, barring a ''major disruption in the economy.''

The Conference Board, a private business and research group, said that while its leading index remained unchanged in February, there were upward revisions to previous months. The indicator is now rising at an annual rate of 3 percent to 4 percent, and the growth continues to be broadly spread through the economy.

The coincident index has now grown at about a 2 percent annual rate from its most recent low in April 2003, the group reported. The growth in that indicator has also been broadly based, including sectors such as production, sales income and employment.


AP-NY-03-18-04 1021EST

[Jen10122]

WASHINGTON (March 18) - A jump in energy prices pushed wholesale prices up sharply in January, according to a long-delayed report from the Labor Department issued on Thursday.

The Producer Price Index, which measures prices paid to farms, factories and refineries, climbed a steeper-than-expected 0.6 percent in January after a 0.2 percent gain in December. It was the steepest rise in wholesale prices since a 0.7 percent surge in October 2003 and handily outpaced Wall Street economists' forecasts for a 0.4 percent pickup.

Stripping out volatile food and energy prices, wholesale prices climbed 0.3 percent in January after a 0.1 percent fall in December, again outpacing Wall Street expectations for a smaller 0.1 percent pickup in so-called ''core'' prices.

Imported oil prices have been on the rise for some months and it showed up strongly in the wholesale prices report. Energy prices shot up 4.7 percent in January, nearly triple the 1.6 percent December gain. It was the biggest monthly increase in energy prices since a 4.8 percent jump in March 2003.

Gasoline prices shot ahead by 14.1 percent in January after a 3.4 percent December rise while home heating oil prices surged 16.8 percent after a 6.2 percent December rise.

The January wholesale prices report has been held up for weeks because of difficulties in converting the data to a new classification system.


Reut08:41 03-18-04

[grinner]

You want lower energy costs... allow oil drilling in Anwar.

[grinner]

Jobless Claims Lowest Since January 2001
Email this Story

Mar 18, 8:41 AM (ET)

By MARTIN CRUTSINGER

(AP) An unidentified man talks on a pay phone under the gasoline price board at the Shell gas station on...
Full Image

WASHINGTON (AP) - The number of Americans filing new claims for unemployment benefits dropped for the third consecutive week last week, pushing jobless claims to the lowest level in more than three years.

The Labor Department reported Thursday that the number of laid-off workers seeking jobless benefits fell by 6,000 last week to 336,000, a level that was last seen the week of Jan. 13, 2001, just before Bill Clinton relinquished the White House to George W. Bush.

In other economic news, the government said inflation at the wholesale level jumped by 0.6 percent in January, the biggest increase in three months. That reflected in part the largest jump in energy prices since last March at the start of the Iraq war. Outside of the volatile food and energy categories, the Producer Price Index rose a more moderate 0.3 percent.

The release of the PPI report for January was a month late as the Labor Department struggled to overcome difficulties in converting to a new classification system for the products it tracks for price changes.

(AP) Consumer prices rose by a modest 0.3 percent in February as high energy costs continued to hit the...
Full Image
The third straight weekly decline in jobless benefits raised hopes that a lengthy stretch of layoffs is coming to a close, setting the stage for businesses to finally begin rehiring laid-off workers.

President Bush, under attack by Democrats for what they say is the worst jobs record since Herbert Hoover, is counting on his three rounds of tax cuts to finally start generating new jobs.

The lack of significant new hiring has become a key issue in the current presidential race. Presumptive Democratic nominee Sen. John Kerry contends Bush pursued a failed economic strategy of providing tax cuts skewed to the wealthy, which have done little to generate new employment.

Just 21,000 new jobs were created in February, as reflected by the Labor Department's survey of payrolls, as the country's job machine continued to fall badly below expectations. The unemployment rate remained at 5.6 percent last month. The overall rate remained stable only because 392,000 Americans gave up looking for work and were no longer counted in the labor market .

Bush, who has already endured a "jobless recovery" that has lasted far longer than the one that plagued his father, is counting on the tax cuts to finally begin generating jobs at a healthy clip so that voters will feel better about their economic prospects before they go to the polls in November.

(AP) Housing starts declined for the second month in a row, as bad weather across the country forced...
Full Image
The drop of 6,000 in the number of Americans filing unemployment benefits caught analysts by surprise. They had been expecting a slight increase after two weekly declines.

The drop left the four-week moving average of claims at 344,000, the lowest level for this barometer of the labor market since Jan. 27, 2001.

The 0.6 percent January increase in the PPI, which measures price changes in goods before they reach store shelves, followed a much more moderate 0.2 percent increase in December and was the sharpest jump since a 0.7 percent rise in October.

The January jump in wholesale prices was driven by a 4.7 percent rise in energy costs, the biggest monthly increase since a 4.8 percent rise in March 2002, as the U.S.-led Iraq war was beginning. Gasoline prices rose by 14.1 percent in January while home heating oil climbed 16.8 percent.

Food prices fell by 1.4 percent at the wholesale level in January, the biggest monthly drop since a 3.1 percent decline in April 2002. Big declines were recorded in the price of beef, lettuce, cauliflower, tomatoes, broccoli and spinach.

Outside of food and energy, the 0.3 percent increase in so-called core inflation was the biggest monthly rise since a 0.5 percent increase in October. The core wholesale inflation rate actually fell by 0.1 percent in December and was unchanged in November.

On Wednesday, the government reported that consumer prices in February were up 0.3 percent, a slight moderation compared to the 0.5 percent increase in January.

The Federal Reserve, which left a key interest rate at a 45-year low on Tuesday, said one reason it was able to do so was that inflation pressures remain at low levels.

link (http://apnews.myway.com/article/20040318/D81CQE280.html)

[stellar]

Thanks for the posts. I was starting to worry about job growth but your posts with their unskewed statistics have taken a load off my shoulders. I'll be sure to get home early before my digital answering machine fills up with job offers.

I'm so relieved that all those people who have given up on ever finding work and those who have been out of work so long that their benefits have run out - all of those people had the common decency to stop polluting the unemployment percentage with their presence.

[/sarcasm]

[Jul]

hey stellar, if you worked in a healthcare related industry, you'd have a job like tomorrow... they're understaffed.. Hospitals out here are paying up to $19,000 in closing costs to get nurses to move out to Southern California... and people who refer them get paid "rewards"

[LadyCrais]

The recession started 1-2 months after Bush took office, not nine months before. At least get some of the facts straight.

[waltersgirl]

i'm pretty sure if you guys tried hard enough, you could probably blame Bush for the fall of the Roman Empire too.

[Jul]

I did and many of them are stating that the recession itself happened prior to Bush even being sworn in, during the Clinton Presidency and its seeds were definitely sown during the last year of the Clinton presidency

Did recession begin in 2000?
Group that dates economic cycles considers extending most recent downturn; possible boon for Bush.
January 22, 2004: 3:01 PM EST
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - The committee of economists that sets the dates of U.S. recessions and expansions is considering moving the starting point of the latest recession to as early as November 2000 -- which could provide some political cover for President Bush.

The business cycle dating committee of the National Bureau of Economic Research, a private research group, will soon decide whether or not to change the starting date of the latest recession from March 2001, its current estimated starting month, NBER spokeswoman Donna Zerwitz told CNN/Money.

The story was initially reported Thursday by the Wall Street Journal, though Zerwitz said NBER economists had been discussing the changes since a meeting early in January.

"The committee is waiting for more data at this point in time, and there might be changes to the historical dates of other recessions," Zerwitz said, noting the committee has set dates for every U.S. recession and expansion since 1854.

She added that, while the revision could be as dramatic as moving the starting date of the recession all the way back to November 2000, it could also be less drastic -- moving the date back to February 2001, when payrolls outside the farm sector peaked, for example, according to Labor Department measures.

Any date before January 2001 would be good news for Bush, who took office that month and is seeking re-election this year, as he could argue the recession began during the administration of his predecessor, President Clinton.

Zerwitz said the NBER's discussion about changing the date of the recession was not politically motivated, but rather the result of adding a new set of data to the indicators they already use to measure cycles.

Zerwitz added that neither Bush nor Clinton should be held responsible for a cyclical recession.

Move would be unusual
But going back and changing a recession date would be extremely rare for the committee, and a potential new cycle-dating method -- using data generated by a private research firm -- could represent a marked change in the way the committee works, according to Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI), another private research firm in New York.

"This is complete break from the way recessions are dated," Achuthan said.

He was a protege of the late Geoffrey Moore, who founded ECRI, helped develop the NBER's cycle dating process and was a senior member of the committee until his death in 2000.

Achuthan said he hoped the committee -- which has seemed to act more hastily since Moore's death -- would tread carefully in making this change.

"I don't think it's bad to think of developing a new series to use, but it's also not bad to take your time in assessing any kind of change this big," he said.

For many years, the NBER dating committee has estimated the peaks and troughs of the economy using four basic indicators: job growth, industrial production, consumer income and the volume of sales by manufacturers, wholesalers and retailers.

In October 2003, however, the committee announced it was also using estimates of monthly gross domestic product (GDP), the broadest measure of the economy, generated by Macroeconomic Advisers, a private research firm.

The committee formerly paid less attention to GDP, simply because the Commerce Department only tracked GDP on a quarterly basis. The monthly GDP data now available are more helpful, Zerwitz said.

Though the committee has said those monthly numbers "are fairly noisy and are subject to considerable revision," it also considers them helpful in tracking the economy's cycles. And in time, revisions by Macroeconomic Advisers to older monthly GDP estimates could inspire the NBER to change its cycle dates, Zerwitz said.

One common definition of a recession is two consecutive quarters of a negative rate of growth in gross domestic product (GDP), the broadest measure of the economy. GDP shrank in the first three quarters of 2001, and the Commerce Department recently said revised benchmark data showed GDP also shrank in the third quarter of 2000.

But Achuthan of ECRI said he worried that focusing on GDP could give less importance to a critical sector of the economy -- the job market. Moore and other founding members of the NBER committee focused on jobs, he said, because they often influence the other indicators -- if unemployment is rising, then incomes, output and sales typically fall, as well.

"That vicious cycle is the definition of a recession, and that's why it's important that the definition of a recession captures that cycle, "Achuthan said. "GDP alone doesn't do that."

Find this article at:
http://money.cnn.com/2004/01/22/news/economy/nber

and

follow this link to an economist out of San Jose State University:

http://www2.sjsu.edu/faculty/watkins/rec2001.htm

and

[stellar]

Originally posted by Jul
hey stellar, if you worked in a healthcare related industry, you'd have a job like tomorrow... they're understaffed.. Hospitals out here are paying up to $19,000 in closing costs to get nurses to move out to Southern California... and people who refer them get paid "rewards"

Thanks for rubbing salt in my wound. Yeah, I know I chose the wrong avenue of education, but I didn't have a crystal ball when I was pursing it. I'm a mechanical engineer and I'm 28 years old. I'm not going back to school for my nursing degree.

Insofar as the things which are Bush's fault and the things which are Clinton's fault... It doesn't matter. None of us here are going to decide the election, because nearly all of us are (1) going to vote and (2) will be unwaivering on who we're going to vote for. The constant back-and-forth only reinforce my support of one candidate and another's support for another candidate. The people who will actually decide who wins are the 5 or 6 percent of Americans who are undecided and constant bickering only insures that they won't vote at all.

And no, GW Bush wasn't responsible for the decline and fall of Rome (and I know you're reading that book now WG - nice way to work it in :)), but he's working on an analogy.

[generic_screenname]

Originally posted by Jul
hey stellar, if you worked in a healthcare related industry, you'd have a job like tomorrow... they're understaffed.. Hospitals out here are paying up to $19,000 in closing costs to get nurses to move out to Southern California... and people who refer them get paid "rewards"

Crap. I'd drop this graphic design stuff and go do that except for two things:

1. Hospitals have, as one would expect, that "hospital smell"

and

2. I even get nauseous playing "Operation"

[stellar]

Originally posted by generic_screenname
2. I even get nauseous playing "Operation"

Hook your game up to a car battery... might as well make things interesting.

[NebariNookiee]

Originally posted by stellar
Hook your game up to a car battery... might as well make things interesting.
:roflmao: I gotta try that!!!:rollin:

[Jul]

Thanks for rubbing salt in my wound. Yeah, I know I chose the wrong avenue of education, but I didn't have a crystal ball when I was pursing it. I'm a mechanical engineer and I'm 28 years old. I'm not going back to school for my nursing degree.

I didn't mean to rub salt in your wound stellar.. sorry..

[mgraylorn]

One must read articles carefully and understand what is being presented. From grinner's article "The number of Americans filing new claims for unemployment benefits dropped for the third consecutive week last week, pushing jobless claims to the lowest level in more than three years."

This does not imply that people got jobs. There are now limits on the amount of unemployment one can recieve. If you use up your unemployment allotment, you can't get any more. I belive that is a lifefime allotment too.

Likewise, "unemployed" is defined as people who are looking for work. It does not include the people who have given up looking for work because they can't find jobs.
"Employment" also includes people who are working part time, and does not tell us the breakdown between full time and part time, nor does it tell us the number of people who would like to work full time but can only find part time jobs.

I would think a better indicator of the heatlth of the job market would be a survey of homless shelters and soup kitchens. I have yet to hear stories that any of them are closing because there are fewer homeless and hungry people. What I am reading is that there are larger numbers of families coming to these shelters for assistance.

And Jul, you mention $19,000 in closing costs to get nurses to move to So. Cal. Can you tell me what the salary is for those nurses and the cost of living in those areas? I have heard that there is a shortage of nurses, and public school teachers for that matter, but I haven't heard that the salaries for either have risen enough to make them attractive jobs unless you have a "calling". Add to that the long hours and high stress, and I don't really want either of those jobs either.

[stellar]

Originally posted by Jul
I didn't mean to rub salt in your wound stellar.. sorry..

I know you didn't; I was just injecting some sarcasm to illustrate the difference between re-training and re-education - one is more practical than the other.

[B Sharp]

Originally posted by Jul
hey stellar, if you worked in a healthcare related industry, you'd have a job like tomorrow... they're understaffed.. Hospitals out here are paying up to $19,000 in closing costs to get nurses to move out to Southern California... and people who refer them get paid "rewards"

We've been thinking about moving back to So Ca (San Diego area) to be closer to our aging parents, and my wife is an RN. Anyone who wants a possible reward can PM me with the info...and you might even have a snowballs chance in hell of actually getting the reward if the job on offer isn't for Med/Surg or Oncology floor nursing on graveyard shift with requirements for 24 hr weekends on-call at a pay rate lower than most teachers, and with a 2 year minimum commitment (which is what most of the hospitals are always looking for, since few people really want those jobs).

OK, my bad- that sounded really sarcastic, and I didn't really mean it quite that way- I'm sure there are places where there's a desireable job that's open today if you look hard/long enough, and the healthcare industry is usually hiring, and many of the jobs are good ones. I'm just not convinced that the news coming out (as I said in my earlier post) is telling the entire story.

[Jul]

Sure, no prob... in California, a new law went into affect that requires hospitals to have one nurse per every 6 patients in a hospital and surgical ward. Also, there's a chronic nursing shortage, so hospitals have to be creative in order to get new staff in. Here's what the California Nurses Association has been able to get in hospitals where the unions are: http://www.calnurse.org/cna/organ/top5-1.htm

and yesterday on the news, they were highlighting nursing positions with payment benefits including paying off portions of student loans or helping pay closing costs on homes for nurses that want to move into the area... One of the places they highlighted is in Riverside County Hospital they have programs for both tuition payments and housing costs (http://www.rchc.org/CustomPage.asp?PageName=Spotlight%20On) and the cost of living in those areas are shown here on this website: http://swz.salary.com/CostOfLivingWizard/layouthtmls/coll_metrodetail_146.html