At the end of the day, that's always the question than hangs in the air. The Bureau of Labor Statistics report today showed jobs actually created easily beat the expectations of 165,000, however, the unemployment rate was supposed to drop to 7.5% but held at 7.6%. So somehow we had 30,000 more jobs created than expected and yet the unemployment rate didn't drop.
The market likes these numbers as you would expect. However, part of it seems to be that markets are pleased that there weren't enough jobs created to lead the Fed to slowdown bond purchases. These days this is the prism that job numbers are looked through-less on their own terms than what they imply about Fed action.
"U.S. job growth accelerated in June thanks a big jump in hospitality and service workers, according to a report that is likely to trigger more debate about how aggressively the Federal Reserve will begin pulling back on monetary easing."
The market likes these numbers as you would expect. However, part of it seems to be that markets are pleased that there weren't enough jobs created to lead the Fed to slowdown bond purchases. These days this is the prism that job numbers are looked through-less on their own terms than what they imply about Fed action.
"U.S. job growth accelerated in June thanks a big jump in hospitality and service workers, according to a report that is likely to trigger more debate about how aggressively the Federal Reserve will begin pulling back on monetary easing."
"Unemployment steadied at 7.6 percent for the month, as nonfarm payrolls grew by 195,000, according to a closely watched Labor Department report Friday. Economists expected 165,000 more jobs and a decline in the unemployment rate to 7.5 percent."
"Big economic reports such as the nonfarm payrolls data are viewed nowadays primarily through the prism of how they will affect the Fed's zero interest rate policy and its $85 billion a month in bond buying."
However, I notice that the market is now basically flat again. This might mean that there's worry that these numbers-which are the last one the Fed will see before it's July meeting- will be strong enough to enable the Fed to at least start tapering off.
"The taper is on," said Kathy Jones, fixed income strategist at Charles Schwab. "This is the last payroll report the Fed will see before their meeting at the end of July. With the upward revisions to the previous couple of months, it soldifies the idea that they will announce some tapering, probably in September."
As Sumner says, the markets want good numbers that the Fed won't think are good. It's the ultimate Zizekan desire that the Big Other not know the truth; to prevent the Other from knowing.
Mind you Sumner has written some catty stuff since that which I will look at in future posts. For one thing, I knew he'd be hating on Krugman for coming in first onh Wall Street Journal's most influential business thinker list.
I knew Sumner would have something to say about that. If I know nothing else, I know Sumner.
The fact that the job numbers were pretty good at 195,000 can easily disguise the fact that the market isn't necessarily so good. There are jobs but what about quality jobs-that actually pay anywhere close to a livable wage?
"The numbers provided a mixed bag of news: While the actual employment level grew by 160,000, the unemployment ranks increased as well, by 17,000."
"Those working part-time for economic reasons also jumped, growing 32,200 for the month."
"That pushed a more encompassing count of unemployment that includes discouraged and underemployed from 13.8 percent to 14.3 percent."
"Moreover, the quality of jobs was weak."
"The bulk of the gains—75,000—came in the hospitality industry of bartending and waiters."
"Professional and business services was the second-best growth area, adding 53,000 and retail grew 37,000."
"It's so hard. Unless you know somebody you can't get a job," said Sharon MacGregor, 43, of Patterson, N.J.
If you don't know somebody you can't get a job. The problem of job quality has been a long term problem Ever since the 2001 recession even, when we make up job losses so much of it is poor quality jobs. Many think that this is due to the Internet and data revolutions. What this really did was make many white collar jobs redundant-unlike the 1980s and 1990s downsizing which was more about the loss of blue collar jobs.
Even at the height of the 'Bush Boom' things were not too good for most Americans. Maybe unemployment was 5% but so many of the jobs were in the low paying service sector.
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