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About Those Initial Jobless Claims "Anomalies"
This is from Stone Street Advisors
Ever notice that when economic numbers "disappoint" its always
because of some one-time, special circumstance that seasonal adjustments
failed to account for (and why should we "adjust" for them, even if we
could?)? Over the past two years, some of the BS excuses I've seen have
ranged from plausible to impossible, and everywhere in between. Today,
the Department of Labor (via Bloomberg) tells us :
Applications
for jobless benefits jumped by 43,000 to 474,000 in the week ended
April 30, the most since August, Labor Department figures showed today. A
spring break holiday in New York, a new emergency benefits program in Oregon and auto shutdowns caused by the disaster in Japan were the main reasons for the surge, a Labor Department spokesman said as the data was released to the press.
I'm
curious - and if anyone can answer this please enlighten us in the
comments - how, on God's green earth, a (regular) spring break holiday
in New York could have possibly caused initial claims to increase at
all, let alone to any meaningful level such that it was worth mentioning
explicitly. Additionally, I'm not sure to which Oregon unemployment
program the article refers, however as far as I can tell, it is the (up
to) 6-week EXTENSION of existing benefits available to those who have exhausted all other programs, see OEB-3 details here.
There's some other curious nuggets in the Bloomberg article, like this one:
The
productivity of U.S. workers slowed in the first quarter and labor
costs rose as a growing economy prompted companies to boost employment,
another report from the Labor Department showed today.
The measure
of employee output per hour increased at a 1.6 percent annual rate,
after a 2.9 percent gain in the prior three months. Expenses per
employee climbed at a 1 percent rate after dropping 1 percent.
This
seems to be another case of a journalist (and possibly some government
type) not understanding basic math. If the above numbers are correct,
productivity did not slow; the rate of change (e.g 2nd derivative) of
productivity slowed, but productivity still increased, just at a slower
rate.
All things considered, I'm not sure why so many people
(including several who should know better) still think unemployment is
going to keep decreasing when there's little incentive to hire more. So
doing would eat-into corporate margins (and thereby stock prices), and
so long as firms can get more productivity out of their existing
employees, they have little-to-no reason to hire more.
- advertisements -
Oregon's case very simple: in the other 49 states, when UI benefits expire, most people don't bother to register as UI, and so they're "dropped off" the labor force. They no longer count. Since Oregon extended UI by 6 weeks, those "99ers" did bother to register in order to get the UI cash, hence more "officially unemployed" individuals. So, instead of fudging the numbers as usual (for all 50 states) they have only 49 to work with. There's your "UI" gain
so let me understand this. you're asking the board rhetorically to help you out on what gives with corporate or government spokesmen serving up lame excuses for why a stat didn't "meet expectations?" yet you published yesterday (and vouched for the metrics of the author/s) one of the lamest articles in recent memory postulating from a fed (they're tptb - private or gov't is irrelevant) bureaucrat that offshoring is not the primary reason for job loss in the usa. ridiculous.
if by now you do not understand what is going on in the usa you never will.
in a fair and just world may you be outsourced and jobless.
There is a difference between offshoring and outsourcing. The former does not seem to the a material cause of unemployment, although the latter may be, although to what degree is subject to much debate.
you continue to dig a deeper hole for yourself, and prove to all reasonable people that you are totally and completely and comprehensively clueless about the magnitude of job losses in the usa from both outsourcing and offshoring. you mock blue collar jobs by calling them luddite jobs from your perch (i'm assuming) in manhattan. fact is, china would be russia if it weren't for the tens of millions of jobs offshored and outsourced from the usa to build and sell products back to the usa. and that's just using china as an example. there are others, too.
actually, i kinda feel sorry for a person such as you that is so utterly without life experiences, and so unaware of the destruction and hollowing out of the usa that you lend your name to such garbage. pathetic.
and then you ask for help in deciphering lies. comical.
You assume far too much and know not of whom or what you speak. It also seems fairly clear that you haven't read anything I've written, at least not without the goggles of preconceived notion(s).
Do you disagree with the basic concept of the productivity function, that increases and advances in technology, knowledge, etc reduce the demand for unskilled and less-skilled labor?
i've read plenty of what you've published. i'm underwhelmed. besides, over the years i've had hundreds of conversations (and read hundreds of articles) with people on the two very topics that you've written about recently. plus discussion ad infinitum in grad school over the offshoring / outsourcing debate relating to usa lost jobs.
the elitist, corporate, insider, tptb, tbtf side has lost the debate - huge. it is patently obvious to all but ivy league goobers that the usa is a hollowed out, shell of country run by a bunch of money changers, insiders, lobbyists and big corporate moguls. get real. few buy your lame, weak talking points. folks see with their own eyes in their own communities the exact opposite of the lies you and the fed propogate re: outsourcing and offshoring.
again, the usa could have a highly educated work force and still not be competitive with cooly labor. and besides, taken to its logical conclusion do you expect every usa worker to be a brain worker, with no blue collar jobs? get out in the real world. a million people showed up recently for 70,000 mcdonalds luddite jobs as you call them.
it really is hard to believe you are so out of touch, and so gullible to believe the nonsense of the fed. shocking, actually.
1. Not an Ivy league elitist (er, "goober"), please.
2. I knew you were going to reply with the "logical conclusion" line. Where did I even accidently imply that we should have no blue-collar jobs? NOWHERE. Everyone who's passed freshman economics knows thats idiocy, why do you constantly revert to such straw man arguments? You keep saying I'm out of touch, yet you know absolutely nothing about me, and have yet to respond to or engage in a reasonable discussion about the merits of what I've said; in fact you've consistently ascribed to me several beliefs and opinions which I very clearly do not hold.
When you'd like to have a civil discussion, please come with it. If you're just going to fling disparaging remarks and respond to arguments I havent made, please save yourself the time and effort and just don't respond at all.
actually you bore me with your fancy class room theoretical rejoinders as you debate brain jobs versus luddite (your words) jobs in a hollowed out, aimless usa. i have engaged your remarks which were hidden behind what you perceive as a prestigious institution, the fed, and called them garbage. even you went back to the fed, you said, for clarification. and i didn't say you personally were ivy league although a reasonable person might infer i did.
the point is that you sallied forth with bogus points on a website known for feisty comments. zh is fight club after all. and then you get your panties in a bunch when someone calls you out. so if you can't take the push back then don't read the comments or ignore them. but to tell me not to respond to your comments tells me you're quite sensitive, immature, green behind the ears and an armchair theoretician.
You are getting some responses that even cause me to scratch my head.
Good posts. Carry on.
Stone Street's opinion aside, one thing not even our "government" is going to be able to one-off explain away are the 1-2 million (YES! MILLION!) educators and support staff that will be officially without renewed contracts beginning in June and extending through July. the employees of the various school districts across the country are already aware of the impending catastrophe for themeselves, their families, and their communities. If you aren't aware of this coming event that will devastate the economy this summer, ask around, as you all must either have an educator in your family, know one, or know someone who knows one. This is the real deal. Get ready.
Do you really think the Govt is going to let "1-2 million" educators go without contract thereby causing the sort of damage you expect? I realize the Govt doesn't have THAT much left in its arsenal, but I think your concern may be a bit out of proportion.
"The government" you refer to is a collection of about 17,000 self-governed school districts around the U.S. Our district alone is laying off about 2000 (we are large). What if the average is about 100 layoffs per district? Do the math.
what school district is laying off 2,000 teachers in one fell swoop preytell?
Wasting time disecting bullshit.
Exactly. fraudulent numbers and analysis, are just that, a fraud. Get back to work and be more productive already.
Jobless anomalies and transitory inflation. This is how the easily explainable becomes unexplainable...or vice versa. Anyway, at least I'm learning how to spell a lot of big words.
one wonders how much attention further commentary from 'stoned street advisors' might warrant given the [initially] wholly illegible and nonsensical offering [multinationals would never outsource] they presented regarding the offshoring of labor that the large multinationals aren't engaging in. going forward i myself will be paying every bit so much attention to them as i do to leo.
the sad fact is that once one opens one's mouth in public, removing any doubt as to one's idiotic disposition, one gets few chances for redemption.
cheers
1. The info was from the Federal Reserve Bank of Atlanta. If you have a problem, take it up with them. I've reached out to the author of the source document as to how outsourced jobs come into play, but have not heard back. We never implied firms do not outsource, so I'm not sure where you're getting that from.
2. The images worked fine in the original post on our website, when I realized they weren't showing, I fixed the problem.
3. Any other concerns?
"In the 10-year period from 1998-2008, we saw 1.9 million manufacturing job “losses” domestically, while only 242,800 such jobs were “created” abroad by U.S. multinational firms (i.e. this ignores multinational firms based in other countries). "
clearly the companies that are shutting down domestic factories in the US are shifting labor overseas. in some instances they establish foreign located divisions which take over the over the work formerly executed 'here'. in many other cases [foxconn for example] the work is simply shifted from US factories to large offshore entities in an effort to offshore AND to outsource.
furthermore, the figures are distorted even more by the lack of 1:1 correlation between the work completed 'here' vs 'there'. one US employee might work one shift of eight hours. one foxconn employee might work one shift of 35 hours. that right there implies a 4:1 leveraging of the employee base.
cheers
I agree, and I have asked the Fed specifically about how they consider outsourcing co's like Foxconn (I mentioned them specifically, actually). I think its pretty clear that the 1 million+ Foxconn jobs in China alone are largely for the explicit purpose of building/assembling goods for export outside of China. The logical error many commentors make though is in assuming that (with or without the "leverage factor" you mention) if Apple didn't make iPad2's by contracting with Foxconn and its million+ China employees, they would make iPad2's themselves in the U.S, which I think is a patently ridiculous claim. For Apple to maintain its margins and volume while paying U.S. employees to make said iPad2's, just back of the envelope here, employees would be paid sub minimum-wage/hour.
As a profit-maximizing entitiy, should Apple feel particularly compelled to accept lower margins and lower revenues out of some patriotic duty? Perhaps, to a point, and that's one reason why not every job is outsourced to a developing nation. But I don't see much merit to arguments that corporations should be somehow "made" to bring jobs back to the U.S. Indeed, firms don't want to and shouldn't "bite the hand that feeds," but how do you balance that with their legal and fiduciary obligations?
Are we to impose grossly protectionist measures and punish firms for fulfilling their obligations to shareholders? Simply, if the quantity of labor supplied at their (e.g Apple's) price is significantly below the quantity of labor demanded. Firms could easily "bring back" jobs outsourced - and I'm sure they would love to, to minimize agency costs and control issues - but we don't want to give up our standard of living. This is true of both blue and white collar workers and everyone in between. Eventually developing countries will catch up (and we very-well may fall back some), to the point where the effective cost of labor is the same both domestically and abroad, but that is still some time off, and until then, firms will minmize (certain) labor costs where they can.
Surely there are policy and other measures to encourage firms to employ people in the U.S. instead of abroad (directly or via contract/outsourcing agreement), but that is another conversation for another time (an important one, no doubt).
Thare are far more complicated arguments than can be discussed in a blog comment, and the above is merely scratching the surface thereof, and should not be considered representative of my conclusive thoughts.
Yes. Vote Gold 36000 for president because I will make everyone pay.