New Hires Rate WORST IN HISTORY
Entrepreneurs and business managers are frozen
It's not enough for most people to know what the unemployment rate is and whether it's going up or down. It's not enough for investors and entrepreneurs living during some of the strangest times in American financial history. And it's not enough for citizens trying to decide whether the policy proposals now in Washington are worthy of their support. If you fall into any of these categories, you need to know more about the labor market than the headline numbers. In particular, you need to know the JOLT.
Last week we learned that non-farm payrolls dropped by "only" 247,000 and that the unemployment rate decreased a tick from 9.5 percent to 9.4 percent -- important statistics both. This week, however, a lesser-known but no-less-vital jobs indicator arrived: the Job Openings and Labor Turnover Survey (or JOLT, to its friends). This survey breaks down the ins and outs, literally, of our dynamic employment system. It tells us how fast we're hiring, firing, quitting, and offering gainful employment. Critically, it tells us the hires rate.
You know how, when Obama says we're turning the corner he just doesn't FEEL RIGHT?
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Economic minds on the political left might reflexively counter that the blame should fall on the greedy businesspeople who are not hiring. But even if we concede that business owners are greedy (which we do not), was there ever a point, across the hundreds of months during which the hiring rate has been reported, when they weren't greedy? Weren't they greedy when they went on a hiring spree following passage of the Bush-Cheney (or is it the other way around?) tax cuts of 2003? Did Obama make them greedy? No, but Obama has made them scared. Everywhere I go I hear the same story. Business owners know the little details that academics and pundits don't, and they know what not to do. They know, for example, that payroll taxes are not only scheduled to rise, but already have risen. And they know all too well that government-mandated unemployment compensation is funded by employers through an unemployment-compensation payroll tax. As a result, they know not to hire.
This is certainly NOT an argument against unemployment compensation ...in fact one of the valid uses of govt in a situation like this MUST be to extend this, but the question of recovery is not a matter of executive claims and faux optimism to raise the investment feelings.
The basic problem for this nation is that the industrial base which MADE THINGS for a profit has eroded since the 70's beginning with the industry's urge for subsidies for the steel. Wages overseas made production costs a fraction of ours as industries there reached a threshold of capacity to compete.
Very high end software, medical, and other niche production has ameliorated this somewhat, but when you call for tech support and the phone is answered in Hyderabad .....
I don't expect Americans to say, 'okay I'll work for what they make in Bangla Desh'. But I do expect SOMEONE in authority to point out the basic issues. So we can begin to think.
This nation (and the world via us) got away with 2 generations of growth on the equity explosion in real estate values which allowed us to spend money not made on production of things for profit, but in a very large way - on that equity. Nations around the world benefitted as the money spun around.
Now as we look around, one has to wonder how and what americans can produce for a profit ..whether that be software, services, plywood, fusion energy, or WHAT?
Maybe entrepreneurs turned loose like this?
Or will it be the force of nature known as capital which compels us all to a ONEWORLD?
It's time to think UNSPARINGLY