WSJ: A Look on the Bright Side for Jobs

[ProSense]

A Look on the Bright Side for Jobs

By Phil Izzo

The mediocre growth in the jobs market remains one of the biggest concerns about the recovery, but there may be a light at the end of the tunnel.

The latest signal for concern was a report from payroll giant ADP and forecasting firm Macroeconomic Advisers that showed the private sector added only 42,000 jobs last month. While the number was slightly better than expectations, the level is still relatively anemic in an economy that needs to create more than 100,000 jobs a month just to make up for population growth.

The report also doesn’t include government employment, which is expected to show a significant drag in the official Labor Department numbers to be reported Friday. State and local governments have continued to be stressed by tight budgets, with a recent analysis showing that more than 500,000 job cuts may be coming over the next two years. Meanwhile, the 2010 Census is winding down and following a huge surge earlier this year, those workers will be falling off government payrolls for the rest of the summer. About 140,000 workers were dropped from Census payrolls from the June to July period.

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Meanwhile, other labor market indicators have offered hopeful signs. The Institute for Supply Management employment indexes for both the manufacturing and service sectors were in expansionary territory in July, improving from the previous month.

Economist Joseph LaVorgna of Deutsche Bank points to another potential signal of coming strength. Last week, the Commerce Department reported that business spending jumped 20% in the second quarter from the previous period, up 13% from 2009. LaVorgna notes that in the past there has been a strong correlation between capital expenditures and employment with a one-quarter lag, indicating that the big gains seen in the second quarter may begin showing up now. “Taken literally, the chart (of the correlation between capex and payrolls) implies we will see several million jobs created over the next few quarters. While we are not so bold to forecast such sizeable job gains, we wonder whether there is some upside risk to our slightly above consensus forecast for July private payrolls,” LaVorgna wrote in a recent research note.

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More needs to be done to stimulate the economy, and Republicans continue to vote against the recovery.

[lib2DaBone]

1. Why couldn't Mr. Obama simply insert a "Buy American" Clause in the Stimulus Bill?

A simple statement.. "all goods and services used as part of the $800 Billion stimulus bill must be made in the USA."

Why can't Congress simply reject the tax incentives that reward companies for offshoring jobs?

Why does Congress allow cheap Chinese goods to be imported into this country at free will.. while these corporations pay no taxes, build no factories and could care less about jobs in America?

[Phx_Dem]

2. Whoopi should stick this in Elizabeth's face since she thinks we're still losing jobs

every month.

Better yet, shove it up her ass.