THE SPIN IS IN – AT 8:57 A.M. ET: New jobs figures are out, they appear good at first look, and some in the mainstream media are already spinning this as proof that we're recovering. But the devil, as always, is in the details, the the devil lives. From Bloomberg:
Employers added more payrolls than forecast in September, job gains were revised up in the prior two months and hours and earnings increased, helping ease concerns the U.S. labor market is deteriorating.
Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. The median forecast in a Bloomberg News survey called for a rise of 60,000. The gain reflected the return to work of 45,000 telecommunications employees. The jobless rate held at 9.1 percent.
Whoops. Little problem there. Those 45,000 returnees really shouldn't be counted because they don't really represent job growth. And the jobless rate wasn't dented at all.
Faster job growth is a sign employers remain confident the U.S. will avoid a renewed slump, even as unemployment is forecast to remain above 8 percent through 2013. The risk that the world’s largest economy may fall back into a recession has prompted the Federal Reserve and President Barack Obama to announce further measures to sustain the expansion.
Maddening journalism. The fact is that, even if you take these numbers at face value, they don't come close to reversing our economic decline. This country must produce 150,000 new jobs each month just to keep pace with the growing population. So I see no reason for cheering. But we're approaching an election, and some members of the media will cheer the news that a local diner hired an extra part-time waitress.
In the real world, there is this, from London's Telegraph:
The world is facing the worst financial crisis since at least the 1930s “if not ever”, the Governor of the Bank of England said last night.
Sir Mervyn King was speaking after the decision by the Bank’s Monetary Policy Committee to put £75billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession.
Economists said the Bank’s decision to resume its quantitative easing [QE], or asset purchase programme, showed it was increasingly fearful for the economy, and predicted more such moves ahead.
Sir Mervyn said the Bank had been driven by growing signs of a global economic disaster.
“This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”
COMMENT: Pretty blunt talk, reflecting the possibility of a series of European national defaults. The Chinese have an old curse: "May you live in interesting times." And we do.
October 7, 2011