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The New Normal Paradox: All The Job Gains With Half The Hiring?
While everyone obsesses over the monthly payrolls report, which on a trailing 12 month basis is once indicating the creation of roughly 2 million jobs each year, or roughly where it was before the crisis (red line chart below), one aspect that is largely ignored is the amount of hiring.
Why is hiring important?
Because that is the actual process by which those without a job end up with a job. And as we just learned today after the latest JOLTS release, which showed that there were over 4 million job openings (4,001 to be precisely) for the first time since 2008, a far more important number is the update on Hires which at 4.5 million barely changed from last month, but more importantly, is barely a fraction of where it should be based on the number of job gains reported by the BLS monthly. The chart below confirms this stunning discrepancy: a surge in jobs with barely half the pre-recession hiring?
How does one explain this discrepancy in which the US economy supposedly is growing at its historic peak pace while hiring is at half the peak pace? Simple: the gains in nonfarm payrolls are due a decline in layoffs and other separations, not an increase in hirings: i.e., normal labor demand driven growth.
Which means that anyone hoping for a brisk increase in wages, i.e. worker leverage, is in for a prolonged shock.
The chart above simply shows that the leverage is and continues to be with the employers - instead of letting people go (or workers quitting at their volition) at anything close to a traditional pace, employers have a huge bargaining chip - a job. Because if a worker does not want to perform a job, tough: there are about 3 people willing to fight for every job opening. It also means that those who lose their job will find it doubly more difficult time to reenter the workforce as there simply is not enough hiring.
Which means that wage deflation, at least among prevailing jobs, will continue leading to declining real disposable income, a declining in personal savings and the continued use of "student loans" (since credit card deleveraging continues) to fund everyday lifestyles, at least until such time as the hiring trend has normalized.
The really bad news: while such a normalization will eventually happen, according to our back of the envelope calculations, it will take place some time in... 2020.
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When you're a fascist and the current metrics don't support your current meme, you simply change the equation by which those metrics are calculated.
Same as it ever was...
Where are you get that job?
It's called public school teacher
The coming gap collapse. It will be beautiful. Magnificent. Stupendous.
I've acquired a few good drones and robots to do all my menial work.
Propaganda
Hey Boris,
What do the folks in the ukraine drink when working?
Working?
I'm still trying to figure out the unemployment numbers they posted a few days ago. Let me see if I can get a grip on those unemployed numbers. This month they revised the seasonal numbers for 2 months ago and gave us that seasonal number this month to calculate last month’s numbers. The seasonal adjustment for last month was different from a year ago because of ± weather conditions (and other factors) and holidays (?) and possibly a revised YoY seasonal adjustment revised number. You still with me? OK, you looked confused for a bit. These seasonal number adjustments can have an error of up to ± 15%, or was it 5.xx%, lets go with 15%, sometimes more, sometimes less. They don’t know until they get all the numbers anyway, and then adjust them before the revision. So lets use an easy round number like 300,000, could be up to 345,000 or down to 255,000, because of the ± error that’s before the revision. So, you have seasonal adjustments that have an error in them. Then you have revisions that have errors built in. And there’s one more calculation they throw into this bowl of error numbered soup… it’s the birth/death adjustment, and, I’m guessing they have revisions and adjustment and errors in them also. So month after month we follow these adjusted revised numbers that have errors built in (thinking they're right, or close to being right), only to find out ALL of these horseshit numbers are revised, again, once annually! There's got to be an easier way!
There sure is, ignore them completely and hedge under the assumption that it will be seen as "good news."
Oh, and drink early. And often.
"There's got to be an easier way!"
There is. Call Winston Smith in the Records Department of the Ministry of Truth. The numbers will then always be doubleplusgood.
Big Brother is increase reduced chocolate ration while war is rage in Eurasia. Please to report room 101.
Here's the U.S. Ministry of Truth
False job numbers: Did the White House know?http://nypost.com/2013/11/23/cooked-census-reported-to-obama-and-rahm/
Orwell learned the hard way but to his credit he learned and tried to warn...
The BBC declined to have a statue of George Orwell outside its headquarters. Quite right - his genius deserves bettersnip...
"Orwell's Socialism was literally knocked out of him by his appalling experiences in the Spanish Civil War. Going out to Catalonia to fight Franco's military revolt against the Spanish republic, he was shot through the throat by a sniper, and while recovering, was caught up in a bloody purge launched by Spain's increasingly Communist-controlled Republican Government.
The experience of being hunted by the secret police and seeing his comrades arrested, tortured and killed by the Spanish Stalinists and their Russian bosses gave Orwell an abiding horror of Marxism, Soviet Communism and Stalin's many British apologists - including his own publisher, Victor Gollancz, who refused to publish Orwell's account of his Spanish experiences 'Homage to Catalonia' for fear of upsetting the Communists. Finally, Orwell saw what crimes could be committed in the name of 'socialism' and devoted the rest of his literary life to denouncing the perversion of the humane socialism he stood for."
http://www.dailymail.co.uk/debate/article-2191984/The-BBC-declined-statu...
One must respect that Orwell put his blood on the line for his beliefs. If more of these "intellectual" cocksuckers would do the same, the world would be a much better place and more peaceful too. If they are fortunate like Orwell, and don't get killed, they will learn how full of shit they are.
"Mr. President, your daughters report to the front-line tomorrow to support your agenda."
"Mr. President, your daughters report to the front-line tomorrow to support your agenda."
I hope it's the agenda where we invade another country because they want to sell their oil for gold instead of the USD, and I hope it's the actual front line of that particular invasion.
There is.
Give me access to IRS databases, the actual data, and I can give you accurate stats. I fail to understand why they don't use this data. It's there.
It's almost like they want us to beleive the lies.
5 out of 4 people use statistics incorrectly.
That doesn't seem like a lot in a country of 315,000,000.
At least we aren't France, which is nice.
in Roman times, people used to work about 100 days a year... so in a way...
People....you mean Roman citizens? The lucky few? Most people living in Rome worked 365 days a year..........
The NSA spies on our enemies.
The NSA spies on you.
Pay your taxes.
More chocolate ration for all!
Nice! will it be an increase to 25g from 30g? Double-plus good!
Today is a friday. Therefore, as I have come to expect, there was no traffic on the roads this morning. Many people no longer work on fridays.
Just at TGIFridays...
Boris favorite day is "So Happy Is Thursday" day. Younger day is get "So Happy Is Thursday" face.
you mean you're from washington right?
Ah, yes. The new normal. 4 day, 30 hours weeks. Oh, and you are doing the work of two or three pre-dep/recession employees, you better have good Obamacare since you no longer qualify for company insurance, now reserved for the important, exempt staff.
Oh, yes. Please buy our products. You can borrow the money - just say you're going to school in all your spare time.
And, did I mention, you are going to have to work some extra time, but not clock-in. You don't want to do that? Well, there are 3 or 4 hundred unemployed people who will gladly replace you.
Whadda time... we'll look back on these days and laugh...
Craig
Not where I am. I had took 45 minutes to go about 20 miles on the interstate starting at 9 AM this morning. The road into the city was jammed. Stupid accident didn't help but there were still enough cars on the road to back it up for about 10 miles.
The NSA spies on enemies.
The NSA spies on you.
Pay your taxes.
It's a math thing...
I would like to explain it to you but it would be tot echnical for ya...
you'll just have to have blind faith...
Its a "V" shaped recovery for the multi-millionaires and a whatchamacallit recovery for the workers.
V-shaped in nominal terms, L-shaped in real terms.
I like Y-shaped.
( . Y . ) The best Y-shape.
For the rest of us, it is shaped like this:
\
:-}
Craig
my back of the envelope calculation says this baby is gonna blow in 2014 unless they can recreate one last housing bubble. Then give it just 36 months more.
I can no longer afford envelopes. Had to grab a napkin at Starbucks. I buy coffee there to help support the last American enterprise.
Craig
You only get Kona?
The NSA spies on enemies.
The NSA spies on you.
Pay your taxes.
They're working on blowing that bubble again...
New Mortgage Rules Another Empty Obama Promisesnip...
About the only thing the new rules require is income documentation and debt limits for borrowers.
But they at the same time let borrowers count welfare payments as qualifying income and exceed the 43% debt-to-income threshold if they get their loan guaranteed through a government mortgage agency.
Since Fannie, Freddie and FHA now control 90% of the mortgage market, that won't be hard to do.
plain BS! ( bull shit)
A reminder to hiring managers who believe hiring that the cheapest workers is a good thing: Like Chinese trinkets, cheap things tend to fall apart. When one hires the stupid and the cheapest, rather than quality workers, one's business tends to eventually fall apart.
is intelligence a prerequisite to be a manager? i don't think so. Nor is independent thinking or -god forbid- imagination. MBA'rs are taught means and methods how to legally discriminate, how to legally cheat, and always project a low figure so you can surpass your goals in between kissing the higher up's arse.
I wouldn't say we were taught the means and methods to cheat in our curriculum -that ability was already there for many, and that information alone would actually be useful. Though I would say that for the majority of our courses we were taught from a textbook by apathetic professors that wanted to rake in extra dough for their retirement.
The textbook was mostly expensive bullshit, of course.
Yeah the huge travesty over the past decade or so was actually allowing "hiring managers" to exist. Usually trained HR professionals, not even familiar with, or possessing domain expertise in the area of work. No wonder the workforce/workplaces are generally so messed up, and competent people find it hard to be hired.
The government doesn't need jobs, it just changes the employment stats and spends more to take up the slack in demand.
The Federal Reserve is the great enabler by buying up the debt. Soon the Fed goes from owning 30% to owning 50% or more. The Fed probably cooks the balance sheet so it doesn't report off-banace sheet purchases.
In your dreams it will take place in 2020. Only if there is not a crash in the interim. Otherwise, maybe 2040?
Craig
Surely you know that the answer is '42.
It is isn't 42 you are asking the wrong question.
Take This Job (Reporting) and Shove It...
With apologies to Johnny Paycheck: http://www.youtube.com/watch?v=EzGoDtmTllg
Bureau of Lies and Statistics (But I Repeat Myself)
If true, this is great work and a great catch by ZH.
No you guys have it all wrong. You don't need to be hired to have a job anymore. You just show up and get a check. I think i'm going to walk into Goldman Sachs and just sit at a computer and start working. Then in two weeks I'll go to HR and say I didn't get my check. When they ask me what department, I'll just say high frequency trading programming amd data interpretation. Salary of $250k.
Yes this new economy is awesome. Just think of the potential when you can get a job without being hired first.
Translation: Companies are running out of places to cut costs.
Lots of job ads are fake. For instance, the tech sector employers apparently have lots of job openings advertised on their websites, but most don't even respond to qualified applicants. They just post them either for immigration compliance reasons, or simply to mislead their competition as to the future direction of their company. I've even heard that some VC's like to see their companies have tons of "job openings", simply to increase the hype around the company's growth.
Is that the classified ads wadded up in your pants, or are you just happy to see me?
Wow, I'm sure I wasn't the only one thinking this was also true. Tech job postings are akin to the empty Chinese store fronts. 500 applications and counting 3 interviews, no offers so far...very qualified. Serious joke, I can see why people just stop now.
Sorry, I could ONLY mark pitz up 1 point, not 1 trillion!
This is exactly right and a two-fer, it is usually for both reasons.
Back in the early (?) 1990s, a tech company in the Seattle area, Traveling Software, had a rather suspicious story in the biz section of the Seattle Times, claiming that they spend six months in a lengthy interviewing process before deciding to hire anyone (six months at a tech company?????).
The reason this was suspicious? Traveling Softeware, several weeks prior to giving this so-called interview (or rather planted story) had laid off over half, that is more than 50%, closer to 60%, of their employees.
It was to give the impression to their investors that they were going strong, the exact opposite of the reality!
And, by law, although said law is completely violated by the companies on many levels (not even county Equal Employment Opportunity rules, regs, and those laws which apply to them in the private sector), companies must advertise before utilizing foreign visa scab workers, and those adverts are obvious to anyone and everyone who have been in the IT biz for any period of time.
So, supposedly in Amerka, where EOE laws are in effect, they can lay off ALL the American workers, and replace them with ALL Indian (or other group) workers!
It really is almost hopeless today.....(and Drone Master Obama, with that TPP and other "Freak Trade Agreements" will make it even more hopeless!
Wells Fargo pulls the same exact shit. They post jobs when they only intend on hiring internal candidates (if at all) and drag people through high communte expenses ($10 bart fare or parking, etc.) only to reject you.
I know that Robert Half also posts FAKE ads. I've already raised hell about their discriminatory practices in certain cities.
NASA also pulled the same shit when Obama was elected. I applied for an admin position only to get notice MONTHS later that the position had been cancelled (due to lack of funding)- yet their NEPOTISTIC newhires get subsidized housing for being employed with them. NASA is on agenda for Goldman Sachs' stupid unregulated Chicago Climate Exchange Carbon Credit ponzi scheme anyways- not innovation.
There ARE some employers who have let people go after 3 hours of work. This is after being grilled on excel performance during an interview, driving an hour plus traffic out of my way to meet the owner who only wants to hire someone on a contractor basis so they didn't have to pay unemployment. Like how the hell are we going to pay for that? The employees have these titled but proved to be affirmative action trophies who screw up all the time.
Oh and the Wealth Management assistant position in Beverly Hills was offering a whole $10/hour part time position. IN BEVERLY HILLS! The nearby rents in a SAFE neighborhood in LA go for $800/bedroom + first/last/security deposit thanks to the teaser rate aided property owner/flipper monopoly with that 1035 tax break to rob people in need of shelter.
Meanwhile- starting your own business COSTS MONEY.
WTF! Thanks kleptocratic baby boomer enforced white trash caste system! China funding the U.S. Treasury only with a barrier to entry in the U.S. financial sector isn't really doing the employment situation any good.
And I HATE Obama. I hate Bill and Hillary Clinton, I hate George W. Bush, I hate Obama, I hate lobbyists and delegates, I hate the bankers because the cream did inot rise to the top, I hate the self loathing idiots who thrive on negativity because they're too big of pussies to not thrive on negativity-I HATE the threatened boomers who did nothing to gain credentials and think they're entitled to everyone else's money- and I hate politicrats and their sycophants.
Yes I've always wanted to work at slave wages for the benefit of criminal bankers. Thanks Boomercrats. YUCK. parasites. gross.
Family I know has Mom who works at a billion dollar company; the CEO has steadfastly refused to his creation public. Mom's in finance department. Dad hasn't had a telephone call for a job interview in 3-4 years. Makes stop-gap income restoring and mechanicing cars. Has no garage, has been banned from car mechanicing on certain parking lots, can't work outside, on the asphalt when the weather is too cold. Son is a graduate of an evangelical university. He cannot find a church in the United States, because that's how stagnant the US job market is, even for positions in evangelical churches.
The university affiliated with the church is creating a job of the son in Wales. And the entire family continues to vote Republican in the belief that "tax cuts create jobs." If the son votes by absentee ballot, I'm betting he'll vote Republican. In the US, there is no law against being dumb.