Some good news on the economy front....

[Rob67]

One thing to remember is that the state of the economy is a bipartisan issue and we should all be happy at the signs over the past months that have shown a lot of recovery from the recession helped by 9/11. It doesn't all get better overnight, folks! Let's hope things keep getting better. Even some of the airlines are starting to straighten up again....

Here's a decent piece from the Post-Gazette:
_____________________

308,000 jobs created in March
Unexpectedly large increase, biggest in 4 years, a boon to Bush
Saturday, April 03, 2004

By Steve Massey, Pittsburgh Post-Gazette

Jobs, the 2-year-old recovery's missing ingredient, finally appeared yesterday with the government reporting the nation's businesses added a whopping 308,000 workers in March, the biggest jump in four years and nearly triple what economists had been expecting.

The gains cut across a swath of industries save manufacturing, which didn't grow but, for the first time in four years, didn't shrink either, the Labor Department said.

Adding to the March surprise was a sizable upward revision in payroll employment gains for January and February, bringing the total number of non-farm jobs added in the year's first three months to 513,000, or an average 171,000 a month. Employment has now expanded seven straight months.

"We can finally kiss this talk of a jobless recovery goodbye," said Stuart Hoffman, chief economist of Downtown-based PNC Financial Services Group.

The news was welcomed by the re-election campaign of President Bush, who has faced criticism that his persistently upbeat talk about the economy rang hollow in the face of tepid job growth.

Speaking in the battleground state of West Virginia, which narrowly went his way four years ago and where polls show him in a tight race, Bush basked in the Labor Department report.

He told a friendly audience at Marshall University in Huntington that the jump in hiring served as evidence that his "policies are working. ... This economy is strong. It is getting stronger."

Presumptive Democratic nominee John Kerry, in a statement released by his campaign, also called the March job figures "welcome news for America's workers. I hope it continues."

But, he added, "for too many families, living through the worst job recovery since the Great Depression has been, and continues to be, far too painful."

The jobs issue has been crucial in this year's presidential campaign.

Bush is on course to be the first president since Herbert Hoover to end his first term with employment below what it was when he came in. Republicans fear a replay of what happened to his father, who lost his re-election bid in 1992 largely on an economy that appeared to barely be creating jobs.

That view ultimately was proved wrong, but too late for the elder Bush, noted Mellon Financial Corp. Chief Economist Richard Hoey. Subsequent revisions after the 1992 election showed job gains that year to be far more robust than first reported. Hoey believes that will happen again in 2005, when government statisticians revise this year's tally.

The problem, Hooey and others have noted, is that early in economic recoveries, the Labor Department tends to miss the creation of new businesses and the hiring they undertake. Only after reviewing payroll tax data and other evidence is it able to do a more accurate count, and almost every time, the revised job figures are higher.

Despite March's surge in payroll jobs, the jobless rate rose a notch, to 5.7 percent from 5.6 percent in February, and the number of people working part-time who would prefer to work full-time but couldn't find such jobs rose to 4.7 million, the same level as in January, the Labor Department said.

The labor force -- defined as people working or seeking work, and based on survey of households, not businesses -- also remained unchanged. A stagnant labor force is viewed as a sign of sluggishness. It tends to swell when people are encouraged enough to start seeking work again, something that has yet to happen.

Still, yesterday's monthly report provided what economists said was a vital piece to ensuring that an economic expansion that's into its third year will continue.

Tax cuts and record low interest rates that have spurred record home refinancings have put money in consumers's pockets, which they have spent freely throughout the economic slump, help making the 2001 recession one of the mildest on record.

In the past year, businesses also have stepped up investment, both on equipment and in restocking pared inventories, causing factory orders to rise and manufacturing activity to rise. The nation's economy grew at 6.1 percent in last year's second half, the fastest pace since 1984.

But economists have feared that without adequate job and thus income growth, consumer spending will run out of steam, causing the expansion to falter. Yesterday's report put those fears to bed for many.

"The way I like to put it is, the kindling for stronger growth was the tax cuts, and the interest rates cuts and the refinancings and the lower oil prices of a year ago," PNC's Hoffman said. "All that kindled the economy's fire. Now the jobs are the logs that will keep the fire going."

[gldstwmn]

Originally posted by DeeGeMe
The unemployment numbers also don't count folks whose eligibility for unemployment has run out but still can't find a job. All I know is that the state I live in has one of the four worst unemployment rates in the country. Even McJobs are hard to find here.

The other glaring question I saw in the report is how can the number of jobs increase while the total number of hours worked declined? There's some fancy math going on there.
Everybody I spoke to about this report, including people in the financial community, think it's a complete whitewash. There is also speculation that the numbers were leaked in advance and that's what caused the volcanic reaction in the bond market. I understand the traders were pissed. Look for the numbers to be quietly revised downward here in about 2-3 weeks.
Also, if they keep posting these kind of inflated numbers, The Fed is going to have no choice but to raise the prime lending rate and that will spell doom for the construction market and have a ripple effect on all of the other industries tied to it.
Bush will have no chance of reelection in an economy with rising interest rates based on historical precedent.

[gldstwmn]

http://www.scoop.co.nz/mason/stories/HL0404/S00029.htm

Are The Gobs Of Jobs Here Or There?

by PATRICIA JOHNSON
WOW! U.S. non-farm employment rose by 308,000 for March while January and February 2004 figures were revised (click here) by 159,000 and 46,000, respectively. Now that we’ve heard the oohs and aahs, let’s get down to the looking at the real numbers.

The civilian labor force (Household Data) increased by 179,000 from 146.471 million in February to 146.650 million in March, which is comprised of the following:

-A decrease in employment on the Household Data of (3,000)
-An increase in the number of unemployed persons of 182,000

The number of persons employed in the US, per the Household Data Survey [this is the survey that is mailed out to approximately 60,000 US households by the Census Bureau] went from 138.301 million in February to 138.298 million in March, which indicates that 3,000 fewer people were employed during the month of March than in the month of February.

The number of unemployed persons, per the Household Data Survey, increased from 8.170 million in February to 8.352 million in March. So, while we’re all cheering about the possible ½ million new jobs created over the past three months, another 182,000 people are out of work.

The reason I used the word possible ½ million new jobs is simple. For some reason the BLS is using preliminary figures for both the month of February 2004 and the month of March 2004.

Let’s take a look at these “preliminary” figures and see if we can determine what’s happening.

The report is indicating that the largest increase in jobs is in the construction industry with a gain of 71,000, and a note that it is an “unusually large gain”. We’ll put our “unusually large gain” on hold for a minute, while we review the balance of the numbers.

The next highest gain is in retail trade with an increase of 47,000 jobs. We know for a fact that 13,000 of these jobs were in food stores, indicating that striking workers have returned to work.

Health care and social assistance fields accounted for a 36,000 job increase, with major changes indicating hospitals gaining 12,000 employees, physician offices 9,000 employees and residential care facilities 7,000 employees.

Financial services added 11,000 jobs with the majority in credit intermediation. This increase is a reflection of an increase in mortgage refinancing.

Professional and business service fields gained 42,000 jobs in March. This is the same sector that added 212,000 temporary jobs over the past eleven months.

The final large increase is in the leisure and hospitality sector indicating an addition of 27,000 jobs in food services and drinking places.

The one area where jobs are desperately needed in this country is unchanged. Manufacturing jobs for the month of March remained at 14.3 million, which is most unusual since manufacturing jobs for the month of February 2004 were also exactly 14.310 million.

The jobs appear to be spread out pretty evenly across the various employment sectors so now all we have to determine is where all these jobs are. If there are 308,000 more jobs in March, why are there 182,000 more people unemployed in this country?

Perhaps the jobs that we are jumping up and down and cheering about aren’t even in this country and may not even be held by Americans.

What do we know for a fact? We know that the U.S. Congress appropriated 18.4 billion dollars for the reconstruction of Iraqi infrastructure. We know that in January of 2004 2/3 of this money, or 12.4 billion dollars, was earmarked for 2,300 different construction projects in Iraq (click here). We also know that in January of 2004, the Project Management Office (PMO) of the Coalition Provisional Authority (CPA) began work on the Tadji project.

The Tadji project is a $28.3 million dollar project for the renovation of the Tadji Military Base and Iraqi Armed Forces Recruiting Stations and includes building renovation, renovation and construction of medical facilities, repairing a wastewater treatment plant and installing sewage distribution lines. The work is being performed at the Tadji Military Base and the Iraqi Recruiting Stations at Al Hillah, Kirkuk and Baqcuba and is scheduled for completion in early June 2004. Parsons Infrastructure & Technology Group of Pasadena, California is the prime contractor and it would be safe to assume that whether the construction workers are American or Iraqi they are on Parsons payroll.

Three other projects were awarded in January to U.S. companies. A $10.3 million dollar project was awarded by the PMO to Weston Solutions, Inc. located in West Chester, Pennsylvania. This contract is for building renovation, construction of electrical, water and sanitary sewage systems, security improvements, dock repair and dredging at the Iraqi Naval Base located in Umm Qasr. This project is scheduled to be completed by mid-May 2004.

Shaw Environmental and Infrastructure, Inc., Baton Rouge LA, was awarded a $46.7 million dollar contract to renovate the Al Kasik Army Base. By mid-March the work was expected to be completed to support one Iraqi Army brigade, with additional work to be completed by mid-May to support a second Iraqi Army brigade. This work is being done at the Al Kasik Army base which is located in northern Iraq, west of Mosul.

The largest, of the initial contracts, was awarded to Earth Tech, Inc. of Long Beach, California for $65.4 million dollars to rebuild the Iraqi military base at An Numiniyah, which is located southeast of Baghdad. In addition to renovating existing facilities and infrastructure, there will be construction of new facilities to support operations and training, as well as work on water supply, wastewater treatment and power services. This job is scheduled for completion in mid-April 2004.

Is it any wonder that the payroll figures from the Establishment Survey would increase dramatically after we awarded more than $150 million dollars in contracts, to be completed no later than mid-June 2004?

The BLS Employment report for the month of March 2004 provides a few additional keys that indicate the job increases may not be in the U.S.

The average workweek decreased by 0.1 percent in March for production or non-supervisory workers, and the average weekly earnings fell by 0.2 percent, which certainly is not indicative of a booming economy. The number of discouraged workers increased by 40,000 and, the unemployment rate increased from 5.6% in February to 5.7% in March.

We may be anxious to get the bells and whistles out in celebration, but the 308,000 increase for March may simply turn out to be wishful thinking, a calculation error, or the end result of spending the first $150 million on Iraq contracts.

[gldstwmn]

http://www.nytimes.com/2004/04/07/op...07KANE.html?th

Labor's Lost Jobs
By TIM KANE

Published: April 7, 2004

ASHINGTON — Friday brought good news on the economic front, with the Labor Department reporting that 308,000 jobs were added last month. But total payroll employment still appears sickly if one looks back over the last three years. There have been two million jobs lost since March 2001. Or have there?

It depends, as usual, on which statistics you use. And there is reason to doubt the numbers from the payroll survey, which the Labor Department has used since 1939, because they give a misleading picture of the 2004 economy.

The payroll survey counts jobs, not workers. But counting payroll jobs is a questionable way of measuring America's evolving work force, especially in light of declining job turnover. The payroll survey's biggest problem is that it systematically double counts workers when they change jobs. Since somewhere between 2 percent and 3 percent of the work force changes employers every month, payrolls tend to be noisy. The illusion of lost jobs in recent years occurred because job turnover declined after 2000, first with the recession, then even more sharply after 9/11. As a result, 1 million jobs have been artificially "lost" in the payroll survey since 2001.

Despite last month's jobs surge, the payroll survey remains stubbornly out of whack with other economic indicators, even other labor indicators. Unemployment has been very low and is now near what economists call a "natural" rate. Real earnings rose by 3 percent over the last three years. Jobless claims are 10 percent below their historical average, and that's without adjusting for population.

The sharpest contrast can be seen by looking at the Labor Department's household survey, which shows a record high level of total employment. This survey reported an employment level of 138.3 million as of March — 600,000 more working Americans since President Bush took office in 2001.

Since the recession ended in November 2001, the payroll survey has reported 323,000 fewer payroll jobs, but the household survey has found 1.9 million more overall jobs. Common sense tells us that payroll jobs aren't the end-all, be-all of jobs in the new economy. Economists reflexively like payroll data because it has a bigger sample, but quantity doesn't always ensure quality.

An even bigger problem with the payroll survey is the evolution of what constitutes work. We can think of the payroll survey as counting all workers at traditional firms, plus some workers at start-up companies who have payroll records. But the payroll survey doesn't count individuals who are self-employed — despite the fact that their ranks have surged by at least


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