The latest employment numbers are out, and they are dreadful. Those commentators who saw “green shoots” out there had been focusing on the fact that in May, the economy “only” shed 322,000 jobs, which is good news when compared with the fact that the economy had been losing over 600,000 jobs per month in January, February, and March. Squint hard enough at the black line in my chart, and you can see why many were hopeful that job losses were slowing down.
But counting the number of people who lost their jobs misses an important part of the story. Focus instead on the purple line, which is the index of aggregate weekly hours worked and also counts those who’ve lost only part of their jobs. The decline in aggregate hours worked has been frighteningly consistent over recent months. Any evidence of “green shoots” appearing in recent months disappears in this broader measure. The recession continues apace. If current trends continue, we are in for a frightening time.
It’s time to start talking about a second fiscal stimulus.
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@iratecat:
All payrolls are seasonally adjusted, but farm payrolls are left out because their payrolls are seasonal to adjust. Hope that helps!
Moving from a discussion of bad job numbers to calling for a second stimulus is a non sequitur.
I’m not sure a second stimulus would work. One thing that this recession has revealed, is that the amount of sheer, unadulterated incompetence in both the financial and political worlds is staggering. The housing bubble and sub-prime mortgage crises were both forseeable, yet they happened nonetheless, because those who were able to stop it, didn’t see the danger, and the only ones raising alarm bells, were not numerous enough to be listened to.
Are we to assume that the same businesspeople, pundits, and politicians who have already proven themselves incompetent both by failing to prevent the disaster and by cooking up a stimulus that didn’t work, are suddenly going to summon the will and the ability to create one that will?
Sorry but I don’t for one moment believe that’s possible.
At this point I conclude that it will be much better to incur no additional costs — either in terms of direct government spending that the ideological Left wants, or in deferred or indirect expenditures such as tax cuts that the ideological Right clamors for. Whatever is spent in either fashion, will just go down the vast sinkhole of rampant incompetence which has already consumed previous stimulus packages.
The only way I’d support any more “stimulus” is if new people were in charge of both the government and the corporate world … people with demonstrated competence and willingness to actually do something effective. Since neither will change hands any time soon … forget it.
Um, how about, no?
The reason that state workers are taking unpaid furloughs, overtime is non-existent and part-time workers are getting cut back is that businesses, governments and employees want the freedom and flexibility to adjust to MARKET conditions rapidly.
When furloughs stop and hours are added, then we know the economy is recovering. Then employers will gain the confidence they need to take the necessary risks that come with expanding the workplace. Any “stimlulus” to “get people back to work” might cause employers to add hours, but I doubt it’s going to inspire much confidence.
You start from an implied and false premise: that the January 2008 numbers are where the economy should be.
The January 2008 numbers are artificial – they were inflated by a decade of criminally reckless mismanagement on Wall Street, in the White House and in Congress. Madoff is just a useful scapegoat. Several thousand others should be joining him.
The debate should be about how to build a well functioning economy for the long term.
Some government agencies are still waiting for their stimulus money to even arrive (thanks, Congress!!). Time to take care of that, THEN think about next steps.
Maybe we’re just getting way more efficient with how we use our ‘work’ hours?
@13. Right on. There’s that Faith and Trust violation problem. The more crooked executives put behind bars, the faster the economy will recover.
I used to have a tax man who told me, “We try to be honest but when push-comes-to-shove I just ask myself–’What would Richard Nixon do?’. That usually clears it up for me.”
So the economy “only” shed 322,000 jobs. What happens in Zimbabwe when everyone who could possible get aids has already gotten it?–the monthly increase in new aids cases goes down. Perhaps we will soon get to the point where nobody else can realistically get fired and the unemployment numbers will fall sharply.
Now won’t that be special….