Job market continues to tank

Fan-freakin'-tastic:

The U.S. economy shed 80,000 jobs in March and the unemployment rate jumped to 5.1 percent, as the labor market continued to be battered by an economic slowdown.

U.S. employers have now eliminated more than 232,000 jobs in the last three months. ...

The latest employment figures, released this morning by the Labor Department, add evidence to the developing sense of an economy in recession. In addition to the March figures, the department said that even more jobs had been lost in January and February than earlier reported. Statistics for those months were revised downward by 67,000.

"Trends are awful," said Ian Shepherdson, chief U.S. economist with the High Frequency Economics consulting firm. Factoring out the increase in government jobs, he noted, private employers dropped nearly 100,000 positions. Considering that as of the end of last year, businesses were adding an average of 45,000 jobs a month, "the turnaround has been very fast," he wrote in an analysis of the latest employment report. ...

The latest jobs report "shows that we're right in the middle of a recession that will probably take a while," said Carl Lantz, an analyst with Credit Suisse in New York, told the Reuters wire service. "Our expectation is that it will be a longer recession than the last two and we're just in the beginning."

I think I may need to create an "Economic News" category for the blog, since it sounds like there will be a lot more of these cheerful posts in coming months and years.

P.S. The candidates react.

Comments

[David K.]

So who do the Republicans blame now? Is it STILL Bill Clinton's fault?

[Brendan Loy]

Ty Willingham, of course. It's all Ty's fault.:P

[W]

Fox News says the idea of the US heading towards a recession is a myth, and I believe them!

[BK]

Good thing those economic stimulus checks start going out next month! That will solve everything!

... yes, that is sarcasm you sense

[George W]

To solve these economic problems I propose starting a war trillion dollar war with Iran and cutting taxes for people making over $200K. We can simply borrow money and cut welfare and social security to finance these programs.

[George W]

Sorry for the mistakes. I have a hard time with proofreading and letters in general.

[Sandy Underpants]

Please people, these figures are all lies by the liberal media trying to desparage our greatest and wisest president in his final months, and part of their biased effort to steal the election from the Republicans. Everyone knows the democrats in Congress and the Senate are really to blame and they voted for Iraq too. Rev. Wright Rev. Wright!!!

[David K.]

Yeah, we need to elect another W into office, Charlie "the economic robot genius" Weis!

BK, it IS economic stimulus...to China!

[Mike]

I'm happy that at least the linked article specifies what industries lost jobs, which makes it much more possible to parse the significance of these losses. The biggest losses were in construction (51,000) and manufacturing (48,000, "with some of the steepest losses among makers of lumber, drywall and other materials. Automakers also shed jobs.") Retail jobs were down 12,400, apparently led by losses of those selling building materials and appliances. And 5,000 jobs were lost in the financial market, where mortgage brokers were one of the hardest hit subgroups. This can be seen in two ways: either the mortgage crisis is dragging the economy downward, or else the housing bubble has essentially popped and stopped artificially raising the apparent strength of the parts of the economy based on it.

The report also includes that there have been few layoffs, but rather that companies are leaving vacancies unfilled or taking longer to fill them. With overall unemployment at 5.1%, I don't see the economic outlook being as bleak as it's generally made out to be. For perspective, check out this graph of US unemployment by year from 1950-2005. 5% unemployment is roughly where the US was in 1995, and I don't remember people complaining about high unemployment back then. Part of that, of course, is the issue of trendlines: unemployment has gone up in the past few years, while it had gone down in the past few years back in 1995. Unfortunately, a lot of economics that isn't basically math is basically psychology, with some degree of self-fulfilling prophecy: when people think things are going poorly, they will interpret data as showing things going poorly even if the same people would interpret the exact same data as showing things going well if they think things are going well.

[Angrier and Angrier]

The problem with this recession is that most Americans don't have home equity to tap into this time around to help them out when the bills pile up. That was the big offset during the last recession. Americans could take out 2nd mortgages, etc. Now, even if you aren't being crushed by a sub-prime mortgage, you'd be damned lucky to get a home equity loan - even if your house was actually worth enough to qualify for one.

[Condor]

Will this recession turn me into a pack rat like my grandmother who lived through the great depression? These are the kinds of questions that need answering.

[Angrier and Angrier]

Well, the Great Depression was a world wide economic collapse. I think at one point one-in-four Americans were unemployed. I don't think (cross fingers) we'll see that in our lifetimes. One can hope, anyway.

Hmmm ... 5.1 % unemployment ... I wonder how that compares with the other countries around the world ?

From the OECD , we find that the average rate in the OECD areas of the planet is 6.6% ...

For someone unemployed, the true rate is 100% ... for those of us working, the true rate is 0% ...

If you want the simplistic emotional view, by all means feel free to blame a Presidential Administration and only that Presidential Administration ...

If you choose to do that, however, then you presumably also gave that same Administration the credit for keeping unemployment remarkably low since 9/11 ...

As is said in that expression I learned since coming to this country - "Yeah, RIIIIIGHT !" ...

In this country the "bills pile up" cuz folk are charging their Starbuck's lattés on their credit cards ...

In rational societies, during a recession, unemployment *starts* with Starbuck's employees (or equivalent) rather than in the industries which serve genuine needs (like housing) ... rational folk don't tap into home equity to pay for Starbuck's lattés ...

[Obamary]

The only way to solve these economic problems is for the government to grow even faster and spend, spend, spend its way out (don't worry, we'll tax all those "rich" bastards making over $75K to pay for it, and if they complain, screw 'em for not paying their "fair share"), while putting back up those warm and cozy pre-NAFTA trade barriers that won't actually do a friggin' thing to bring back outmoded jobs, but hopefully no one will realize that until after November.

[Alasdair]

Obamary - do you have NO compassion for buggy-whip maker workers ? Or transistor-radio assembly workers ? Or the workers making black-and-white TVs ?

Think how high the unemployment rate is for those individuals ! They are people, too, dammmit !

[Alasdair]

Obamary - do you have NO compassion for buggy-whip maker workers ? Or transistor-radio assembly workers ? Or the workers making black-and-white TVs ?

Think how high the unemployment rate is for those individuals ! They are people, too, dammmit !

[David K.]

If you want the simplistic emotional view, by all means feel free to blame a Presidential Administration and only that Presidential Administration ...

So you are saying its never ok to place blame on one Administration even if their actions/lack of actions lead to bad situations because over all the system can be complex? Thats like not blaming a player in football for making a monumentally stupid decision (hey, let me lateral this ball when i don't have to) because its a complex team game? Sorry no, sometimes its perfectly valid to blame a President for poor choices, especially when you can enumerate those choices and why they matter.

[Condor]

I once told an Argentinian friend of mine that everyone in the US get's pissed when the unemployment level rises above 5 percent. He thought it was hilarious.

[Alasdair]

David - apart from the fact that I tend to stay away from stupidities like "never" and "always", I also do my best to pay attention to the facts and actions that lead to situations ...

You come up with concrete actions which an Administration can legally and constitutionally and realistically take which and which this Administration took which caused the current housing/mortgage/credit confidence crisis, and I'll be the second person to attribute blame/credit appropriately ...

When you do your emotional "Thats like not blaming a player in football for making a monumentally stupid decision (hey, let me lateral this ball when i don't have to) because its a complex team game?" fertiliser with your customary lack of specific verifiable fact-based examples, you are appealing to emotion and not to rational thinking ...

READ Mike's comment ! Read the comments of the other rational folk - and then respond to the comments, rather than your customary knee-jerk emotional response ...

If you want to blame this Administration for the high price of gasoline, that's well within your emotional range ...

Of course, it neglects such facts as increased demand for petroleum products in China and India and the developing world; it neglects ongoing and pervasive opposition to rational efforts to bring online other energy sources to lessen US demand for petroleum products; it neglects current/recent Congressional concentration on important things like sports drug/hormone use and Blackwater and Executive Compensation rather than so much less important things like getting more US sources of petroleum energy online ...

Cuz how can those have an effect on the situation ?

[Alasdair]

I suspect that David's emotional response may have been triggered by the demise of Randi Rhodes on Air America ... he and the handful of other Air America listeners are being considered for Endangered Species registration since, as a group, they seem to be heading for extinction just as the Easter Island Head Carvers have ...

[David K.]

Alasdair, nice to see you are still as dense as a brick and capable of jumping to conclusions left and right.

Couple of things.

First and most important, I never made ANY arguments about this or any administration. I merely said it was ludicrous to assert that administrations shouldn't be blamed. Where you got that I was accusing the Bush administration of anything out of that very simple statement is simple to see, just like the MSM bias you love to see, you see bias whereever you go, whether or not its there, because you WANT to see it.

Mine was not an emotional knee-jerk response, yours however was demonstrably so.

Second, unlike you, I don't need talk radio to tell me what to think, i have never listened to Air America, so your second post is as pointless as your first.

[BK]

I think it's clear that David blames Reggie Bush for the recession (see unnecessary lateral comment above).

I support that comment 100%

[Mike's brother Matt]

Mike, you forget the parts of economics that consist of lunatic causality that no remotely sane person would draw.
And to whoever's the nameless person rambling about rational societies, the most logical place for the unemployment to be is in construction and related manufacturing. The biggest problem in the economy is that the housing market, and to a lesser extent, the commercial real-estate market, went out of control. Housing prices shot through the roof, and now the bubble's bursting. Thus, there's a massive glut of houses on the market, and so new homes aren't being built. Thus, the portion of the economy that builds homes, and makes materials to build homes is where unemployment should be. We're still talking about a 5% unemployment rate. Why the hell should the retail markets in general collapse? Do people who have jobs they feel are secure suddenly decide 'A bunch of people I don't know lost their jobs in a totally unrelated market sector. Clearly it's time to stop going to Starbucks?' Presuming people working construction were as likely to go to get overpriced burned coffee as the population in general, we're still looking at most a 5% drop in customers. Now, individual cities may have different reactions. A town where the big employer's a lumber mill or a sheet rock plant will have these massive spillover effects. But on a national scale, we're not into the sort of massive unemployment you'd need to cause all sectors to go down at once. And we're unlikely to get there either, as this isn't a general stock panic and the FDIC will stop the old style bank runs from occurring. We're dealing with a transitory drop in real estate. And the dirty secret about that is that many people will be better off with the collapse in housing markets. Someone who's been working and saving up for a down payment on a house is in much better shape when the market's gone down than when its high. Their purchase of a house matters too, not just the people who bought the houses during the bubble. In fact, I'd argue they're more deserving of concern, as they didn't take out loans they should have known they couldn't afford in order to buy houses in what was clearly a bubble market. But, as usual, the government is going to bail out people who brought trouble on themselves at the expense of people who were actually responsible.