General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWall Street is having epic gains, and the "Jobs Report..."
"...Paints a Dreary Picture" (according the L.A. Times).
http://www.latimes.com/business/la-fi-jobs-20130406,0,5481757.story
I took an economics class in college, but don't recall how this is possible?Or even why it's possible?
In layman's terms...it sucks!
JoeBlowToo
(253 posts)those shares prices will evaporate. Many companies are now giving warnings that they cannot sustain the profits that they have harvested in the last few years by firing and firing and then working the remaining workers until they are ready to drop in the harness.
It cannot be sustained because the average family has not had a raise in thirty years. They have been able to accumulate a lot of debt that kept the economy churning but there have been no real gains.
lexw
(804 posts)bhikkhu
(10,714 posts)wall street has been enjoying a long period of incremental gains, which now happen to bring it up to a level above the pre-recession highs. "New Record High!" makes for a good headline, but its on top of slow and steady gains over 4 years, there's nothing really explosive there lately, and not any very noteworthy recent growth.
The jobs report is "disappointing", but averaged over the last two or three months we are still in very good territory. The return to health of the housing market (after years of weakness) is almost certain to put a solid floor under the numbers, and give us a better likelihood of returning to normal numbers.
cprise
(8,445 posts)You see this chart?
http://data.bls.gov/timeseries/LNS11300000
It means that most of the supposed gains in new jobs are actually people already employed who are taking on 2nd & 3rd jobs to make ends meet. It is a cycle of under-employment feeding on itself with the perverse side-effect that the raw number of jobs goes up (and that's the figure the establishment will push through the echo chamber, because it contains the least amount of information about what is happening).
It also means that the 'improvement' in the housing sector is certainly another bubble that is going to burst again.
bhikkhu
(10,714 posts)From here: http://www.cjr.org/the_audit/baby_boomers_and_the_labor_for.php?page=all , and many other sources, you would find projections like this:
going back years, predicting exactly what we are seeing - a decline in labor force participation based on a larger number of retirees and a lower birthrate.
The old saw about needing 150k new jobs per month just to keep up with population growth hasn't been true for over a decade; the estimate now is about 90k jobs per month. The effect of the recession on the numbers is that it lowered the participation rate to a number we weren't expecting for a couple of years, but which is inevitable in any case.
Again, every month for the next couple of decades to come it is projected that the labor force participation rate will decrease. Its been expected since birthrates declined in the 60's. Its not something to beat politicians up over, and it says nothing about the housing market.
cprise
(8,445 posts)Other data also support the gloomier view. The headline unemployment rate for people in their prime (those aged 25 through 54) has dropped to 6.4 percent from just over 9 percent at the end of 2009. However, this seemingly good news has coincided with a disturbing decline in the number of people in that age cohort who are considered to be actively looking for work. The BLS gives us enough information to reconstruct what the unemployment rate would have looked like if the "labor force participation rate" hadn't dropped by nearly 2.5 percentage points.
http://www.bloomberg.com/news/2013-04-05/why-aging-baby-boomers-don-t-explain-jobs-numbers.html
bhikkhu
(10,714 posts)...which is about the same as the predicted decreases, bumped backward a bit by the effect of the recession. Its just different ways of looking at the same thing, and deciding whether to say its a "gloomy picture", or "its the picture we expected".
We are still seeing some effects of the recession. In most things, I'm inclined to say that the direction you are going is more important than the spot your standing on, and the 2% or so left there between the expected "healthy economy" labor force participation rate and where we are now should be taken up by the return to health of the construction industry.
Of course, all things would be better if we didn't have the recession, things would be better if a larger stimulus package had been approved, things would be better if the repugs hadn't blocked the American Jobs Act, and things would be better without the sequester, but a bright side remains.