We see where, once again, the weekly jobless claims have fallen…after rising the week before…and falling the week before that…and rising the week before that.
I’m seriously starting to think this particular data point is telling us very little about the jobs market and the economy right now. Apart from that brief dip below the 400,000 level in December, this reading has been stagnant for more than a year. We know, too, that while companies are still trimming staff, the worst of the layoff storm is over.
What matters now, and I think it was Dan Greenhaus over at Miller Tabak who I saw first make this point, is the rate of hiring, not firing. On that front, we’ll get the big national, nonfarm payrolls report from the BLS tomorrow. The spin is sure to be pretty, but unless this thing explodes, it’s going to show exactly what the weekly claims are showing: the jobs market is stagnant.
The latest Dow Jones survey of economists has the consensus job growth number at 136,000, with the unemployment rating inching up to 9.5%. That’s barely enough to keep up with population growth, to say absolutely nothing of the 8 million jobs that disappeared in the recession (1.1 million of them were recovered last year,) or the jobs that need to be created but aren’t in order to get the economy back to a more sustainable, stronger position.
“Job loss,” Rebecca Thiess at the Economic Policy Institute wrote, “is only half the labor market story.” It’s not just the jobs lost; it’s also the jobs that needed to be created to keep unemployment stable, but weren’t.
“The recession has left us with a shortfall of 11 million jobs, which includes the number of jobs it would have taken to maintain a stable employment rate while keeping pace with growth in the working-age population since the beginning of the recession.”
As I’ve said any number of times, the economy is missing that certain fundamental thing that gets the economy growing again; government spending is only supposed to be the spark. If the spark doesn’t take soon, the government’s going to have a problem.
“Additional tax cuts effective in January are giving the economy some lift but being temporary, their effect is limited,” University of Maryland’s Peter Morici wrote this morning. “Tax cuts, no matter how popular, do not address structural problems holding back jobs creation—principal among those are the huge trade deficit, rising health care costs and persistent shortages of venture capital and bank lending for small businesses.”
At some point, soon, the government is going to have to decide if it can just keep doling out the money, and raising the federal debt level, and digging our children deeper and deeper into the money pit. There will be a big, messy argument between the tea-party GOPers and the Obamaites. It will generate a lot of headlines, and a lot of donations to both parties, likely, but it won’t matter.
The government will borrow recklessly, no matter which party controls the purse strings, until the bond market tells it not to. That hasn’t happened.