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May 06, 2004

Where are the Jobs?

A little bit ago, a commenter asked where the jobs are. Every other indicator is blinking like a Christmas tree on crack, but where are the jobs?

Well, in March, we had a big, big pickup of 308,000 net new jobs. But even before that, jobs were being created, albeit at a lackluster pace.

759,000 jobs in seven months is not an especially robust gain, but it is a gain nevertheless. And that 308,000 in March would seem to indicate a trend of quicker job-creation.


We'll know on Friday, when the Labor Department releases its estimate of April's job numbers. Today (Thursday) we'll probably see a spate of articles in which economists estimate Friday's number.

The expecatations game: Mort Kondracke is a pretty fair-minded and moderate guy -- he's a real political moderate, although the liberal press undoubtedly considers him a firebreathing right-winger -- but he's set the bar for success regarding job-creation at 300,000 per month, continuing in April.

Which seems silly to us; just a month ago 200,000 per month was considered vigorous job creation, and now, just because of one great month, Mort's bar for success has shot up by 50%. A little unreasonable, we think.

Some months will have a lot of growth; some months will produce a great many jobs. Some months will have little growth, or even a small retraction; some months will lose net jobs. This is the way it is during any period; it is often forgotten that Bill Clinton's "dream economy" featured numerous months of declining economic growth and declining jobs numbers. Of course, he had positive numbers on average, over time. Which is what counts.

You don't call a .341 hitter with 35 HR a "failure" because he goes a week without a scoring or batting in a run. You measure his performance not game-to-game, but averaged over the season.

Monthly numbers, in other words, are volatile.

Nevertheless, if Mort the Mild-Mannered Moderate Kondracke is now setting 300,000+ new jobs as the absolute minimum for a successful economic April, you can imagine how the actual liberals in the press are going to play Friday.

On the other hand, 241,000 new jobs -- which is actually a pretty decent number, given the burst of jobs in March -- would make it a cool million for the last eight months. Not stellar over an eight-month period, but hey, that's a million jobs created.

A million is a nice number. A million is the kind of number people recognize as "big."

What will the actual number be? We have no idea, but it seems to us that March's number was a spike of hiring, not something to be taken as the ongoing average. If a batter goes 9 for 12 over three games, you don't extrapolate that he's going to end the season with an average around .750.

100-150,000 jobs in April would mean we've averaged 150-175,000 jobs over a four-month span, which is fair job growth -- and the sort of growth considered decent, if not stellar, a mere month ago.

200,000 jobs would mean an average of nearly 200,000 jobs over four months; this is healthy job growth, maybe even very healthy, especially when you consider that the two month average would be 250,000, a half-million in 60 days.

250,000-300,000 would indicate an undeniable economic boom in all sectors, including hiring.

And more than that? Well, let's not get silly here. Businesses are very skittish about taking on costly new liabilities like workers when the nation is one major terrorist event away from going back into a slowdown. But if we get more than 300,000 jobs -- two 300,000 plus months back-to-back -- then we might as well cancel the November elections and install Bush as El Jefe Maximo Por La Viva, as Paul Krugman fears.

Well, no, let's not do that. We are firmly on the record against installing a banana-republic fascist militocracy in America, even if we think it would be awfully fun to see the look on the Diminutive Dean's face. But 600,000+ jobs in a two months is heck-a-slammin', as Prince so eloquently put it in You Got the Look, and even the supremely objective media will have a little difficulty keeping a straight face as they report, "This just in: We're all doomed. Doomed."

We figure the number will be 125-150,000. Indicating a strong economy with the normal sort of job-creation during an expansion. Not a huge number for a single month, but then, hiring needs to catch its breath again after the March hiccup. Another spike might come in May or June.

We think we'll be very well satisfied with anything like 200,00 jobs. That would produce a two-month average of 250,000 jobs, which is "solid job growth." We have it on good authority that 236,000 jobs per month during an expansion consitutes such solid job growth:

For perspective, it helps to remember what solid job growth looks like. During Bill Clinton's eight years in office, the economy added 236,000 jobs per month. But that's just an average: a graph of monthly changes looks like an electrocardiogram.

Actually, we have it on good authority that just 200,000 jobs per month would be "serious job growth," as defined here:

unless we start to see serious job growth β€” by which I mean increases in payroll employment of more than 200,000 a month β€” consumer spending will eventually slide, and bring growth down with it.

Says who? Says Clinton-loving Princeton Pixie Paul Krugman, that's sez who.

Now, that was Clinton's average over eight full years, but then, he began with a growing economy and didn't put the economy into recession until Bush's term.

If the Bush Boom manages to match the good professor's previously-defined bars for "serious" and "solid" growth creation, we have this crazy idea that Krugman will paint it as "disappointing" or even "disastrous" news.

No word, yet, on when the Democrats will begin revising their "2.3 million jobs lost" rhetoric. In fact, the last time we'd heard, they'd actually upped it to 2.6 million, despite the fact that we've been gaining jobs, not losing them, for seven months.

At some point our supremely objective press corps will, no doubt, begin to correct them.

But Aren't We Now Spinning Expectations, Downwards? Yeah, there's some of that going on here. But the media is ready to define 308,000 jobs in a month as the floor for basic, ordinary success, when it clearly is not. 308,000 jobs in a month is a smashing success, something Paul Krugman spins as "nothing special," and yet Bill Clinton only managed this "nothing special" little trick 21% of the time during his "miracle economy."

It would seem rather unfair to demand Bush achieve with 100% consistency what Bill Clinton managed just over one time out of five. We know the media has different standards for Democrats, but even they must comprehend that their ability to impose differing standards is somewhat limited when simple, irrefutable math is involved.

With the threat of terrorism still very real, it's harder to get businesses to commit to hiring than it is to get to second base with an Up With People! background dancer.

And Bush's poll numbers sort-of indicate that there probably isn't yet mad-hiring going on. The public doesn't need the media to tell it the economy is dramatically improving (although it helps; and we can't count of them eagerly putting out the message as they did for Bill Clinton in 1996). If a lot of people are being hired, one would think that Bush's poll numbers, especially on the economy and right track/wrong track, would be trending up. They're not.

On the plus side, the surging tax revenues might actually indicate some real jobs-growth. Or it might just indicate that a lot of highly-paid people are suddenly being paid a lot more and are getting massively caught by the Alternate Minimum Tax.

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posted by Ace at 07:07 AM

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