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Unexpected Job Rise Calms Recession Fears

From those cockeyed optimists at Reuters:

July payrolls rise soothes recession fears

By Lucia Mutikani
August 5, 2011

WASHINGTON (Reuters) – U.S. job growth accelerated more than expected in July as private employers stepped up hiring, a development that eased fears the economy was sliding into a fresh recession.

Nonfarm payrolls increased 117,000, the Labor Department said on Friday, above market expectations for an 85,000 gain.

Yippee!

The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force.

Oh. Never mind.

The payrolls count for May and June was revised to show 56,000 more jobs added than previously reported. The report was the first encouraging piece of economic data in some time

Which shows how desperate the news media is getting.

Fears that the U.S. economy might be sliding back into recession, coupled with Europe’s inability to tame its spreading debt crisis, have roiled global financial markets. Economists see the odds of a U.S. recession as high as 40 percent…

Would you get on a plane if you thought it had a 40% chance of crashing. (To use the argument for huge spending on ‘global warming.’)

U.S. stock index futures rallied more than 1 percent on the report, while prices for Treasury debt slid. The dollar trimmed losses against the yen.

"More than 1 percent"?! Oh, happy day!

Top policymakers at the Federal Reserve will sift through the report when they meet on Tuesday but are not expected to announce any new measures to support the sputtering recovery

Which is really what has "roiled the financial markets." No QE3. No more printing of money.

A stand-off between Democrats and Republicans over raising the country’s debt ceiling poisoned the atmosphere for employers and consumers.

Sure it did.

The economy’s poor health has eroded President Barack Obama’s popularity among Americans and could hurt his chances of reelection

And we can’t have that!

PRIVATE HIRING STEPS UP

All the gains in non-farm employment in July came from the private sector, where payrolls rose 154,000 — an acceleration from June’s 80,000 increase and more than the 115,000 expected by economists

And never mind that the first paragraph of his article claims they expected an increase of only 85,000.

This article was posted by Steve Gilbert on Friday, August 5th, 2011. Comments are currently closed.

19 Responses to “Unexpected Job Rise Calms Recession Fears”

  1. Reality Bytes

    Oops! Spoke to soon. Market’s down again 18pts. Not sure if you saw this link on Drudge but it pretty much sums up what liberal loonacy has done to America & the rest of the world.

    http://www.cnbc.com/id/44031717

    Interesting that Faber predicts the final solution to prop our currency; get into a war.

    • tranquil.night

      It’s fighting a sharp trendline after breaking down so rapidly from that head and shoulders pattern. It’s going to take more than milder than expected jobless numbers to remove the fear out there. Hearing these media apparatchiks on tv and radio try and talk up the markets on this news is hilarious. They have no idea how traders work, they just think it’s a big game of chance.

  2. proreason

    Buried near the end of the report “Within the private sector, most of the job gains were concentrated in the services sector”

    Services jobs are jobs like waiting tables and fixing cars. Nothing wrong with that type of work, but services jobs that are unaccompanied by jobs that aren’t services jobs are more of a reflection of population growth than economic expansion.

    A service job is pretty much an even trade within an economy. I change your oil; you cook me a meal. An exception is when the service is new, innovative, and something people desire. For example, the development of the fast food industry, much as it is maligned, was something that created wealth in this country because people quickly found that service to be desirable; it meant that they could spend less time cooking, and more time doing other things they enjoy more than food preparation. But back to the main point, for the most part services jobs are an even swap, and don’t really add any wealth to an economy. Moreover, as the number of people grow, more mechanics pretty much have to be added, as well as short-order cooks.

    Another thing about service jobs is that they are a pretty good indication of the wealth of a country. If a country (like the US) has lots of mechanics and short-order cooks relative to other jobs, then that country is wealthy, because it can afford to dedicate a substantial portion of its labor force to performing tasks that in other countries are performed by people for themselves (or not at all, because they don’t own cars or don’t go to restaurants). There aren’t many mechanics or short-order cooks in Bangladesh. Take my word for it.

    So, bottom line, if the growth is in service jobs, it isn’t really growth, it’s running in place, for a while, and an indication of economic weakness, not economic strength. Unless the economy begins to create jobs that create products that people want to buy, our national wealth will decline. The number of waiters and mechanics will decline as well, as people revert to cooking at home, and figuring out how to keep their cars running themselves. This has already happened big-time, btw, despite this month’s bump in services jobs. It is highly unlikely that the % of new services jobs matches the demographic growth of the country.

    • JohnMG

      Many are the factors influencing those service jobs. High school graduates working summer jobs prior to fall enrollment comes to mind. And for a lot of folks who have been refraining from spending on things such as dining out for long periods of time, the occasional splurge as a treat to one’s self will eventually take place. A lot of people take late vacations (perhaps their first in a couple of years) prior to school starting up in the fall. Some pent up urges will ultimately be indulged merely out of long-term frustrations. Kind of a last hurrah, so to speak.

      Mrs. MG and I saw this first hand this summer while out West. It may have taken families three years to finally take “that trip”, but they were doing so because: a) it has been a long, dry spell, and b) who knows when the next opportunity will avail itself. Many of the people we encountered weren’t about to be denied that one last fling.

      But such things are only temporary–a momentary spike in an otherwise dismal marketplace. You’re right, Pro, those slight numbers are mostly in the tit-for-tat realm–money (goods and services?) moving laterally but not doing much, if anything, for growth.

      My own business is in limbo. I survived the last couple of years by loaning my retirement savings into my business to keep it solvent. Things picked up briefly in April and May, but I’m back to living hand-to-mouth again.

      Silly me. I thought a business was supposed to support its owner, not the other way around. With a business climate like the one we’re living through, is it any wonder people are hesitant to invest their liquid assets in an uncertain future?

  3. Reality Bytes

    Down 114. You’re right TN. Insiders have been selling the past month. Cause, when you just can’t fix stupid, you sell. And the stupid are coming from Washington.

    BTW – happen to catch D student Kerry’s remarks about not covering the T party. What a Goon!

    • tranquil.night

      “Yet if we do the right thing and vote [the debt ceiling compromise] down? Why, the fury of the market gods upon us!”

      http://sweetness-light.com/arc.....ent-203258

      Dylan Ratigan: Why the Market gods are Angry (via Huffing and Puffington):

      We have a broken financial system, and capitalism has been broken in this country for some time,” said Seattle-based hedge fund investor Bill Fleckenstein. “Folks need to take a step back and realize that this reaction that happened today was not a reaction to the debt ceiling. We’ve done that dance many times before.”

      Over here, [Federal Reserve Chairman] Ben Bernanke stopped QE2 and has convinced people that he has their back. Now, they’ve got a gun to his head and the markets are saying ‘give us more QE3 or we’ll melt the markets down by Wednesday. The markets are going to force the politicians to deal with these problems… we have to admit these things and solve these things.”

      I’m in a new twilight zone universe when the Left and I are saying the same thing. Of course they probably look at it and think the problem is capitalism and not enough State control. The problem isn’t the system, but it is systemic.

  4. Reality Bytes

    minus 182. a good indicator of Wall St’s take on the “budget deal”.

  5. Reality Bytes

    +124 / -185 / + 124! Volitle no? It reminds me of a plane flown by terrorists. Ironic metaphor don’t you think?

    • proreason

      The market action is eerily similar to the early days of Sep – Oct 2008.

      That one resulted in a 35-50% drop, depending on the specific market.

      I wonder if this isn’t the next “crisis” that the Moron needs.

    • tranquil.night

      Well the Financial realm is doing all they can to hold it together. The European Central Bank is embarking on it’s own quantitative easing which is another short-term Band-Aid.

      The History of the Eurozone contagion is interesting because usually with each newround of crises there, wealth has fled to the relative safety of American markets. This game of Ping-Pong has gone on with money exiting along the way into safe assets, stronger currencies. and emerging markets that embraced more free-market policies after the 2008 collapse.

      That isn’t the case this time, this is more chaotic like 2008 which is probably why the ECB took emergency measures. Action is probably still in Bernanke’s court since nobody expects economic or political conditions to get better. We’re still not bucking this weekly trend of fierce downward pressure.

    • proreason

      How long will it be before the Boy King feels compelled to hold a press conference blaming this new crisis on the lack of a Balanced Approach?

      Over / Under says August 11.

    • tranquil.night

      Heh, the “Political Futures Market” – bet on what Obama will do to turn the next crisis into an election advantage! Stay tuned for more Winning the Future 2012!

    • Rusty Shackleford

      Along with Jay Carney letting it slip that “the government doesn’t create jobs”. Oh….he’s gonna get it.

      http://www.politico.com/politi.....c0212.html

    • Petronius

      Fear is beginning to enter the European money markets as the sovereign debt problem in Europe — and especially Italy — has grown worse. Yields on Italian and Spanish bonds have hit 14-year highs. Italy has accepted terms from the Eurozone central bank to include an austerity plan, with cuts to welfare and labor, and a balanced budget amendment to the Italian constitution. But nobody knows if it will work.

      European banks (and some big US banks) may be left holding the bag. Shares of financials have become high risk again. Barclays shares (to take one example) have fallen about 37% this summer. We may see a run on the banks in Europe. Already many depositors have switched out of euros and into Swiss francs, gold and silver.

      The Swiss government intervened to slash the interest rate to zero, in an attempt to halt the rise in its currency. Nevertheless, the Swiss franc has continued to climb as investors and depositors scramble for a safe haven. The Japanese central bank also intervened to halt the rise in the yen. In addition to the franc and the yen, the Norwegian krone, Swedish krona, and even the US dollar have also benefitted.

  6. Rush said today that fewer people were working in July than in June. Or as the article says, the drop in unemployment claims was mostly a result of people leaving the workforce.

    We can’t expect to compete in the global economy if nobody is working. Especially considering the war against entrepreneurs being waged through excessive regulation.

    • Petronius

      Rush is correct (as always).

      Employers added 117,000 jobs in July. This number is insufficient to absorb half of the new entrants to the workforce from immigration (legal and illegal) and natural increase. In other words, more people are out of work now than in the prior month (June). The unemployment rate fell slightly to 9.1% due to the fact that 193,000 unemployed people stopped looking for work, and as a result they are no longer counted as unemployed.

      The government’s numbers only count people who have applied for a job within the last four weeks. But over 5 million Americans have been unemployed for over one year. When we count unemployed people who have applied for a job within the last six months, and those 8.5 million people who are working part time but who want a full time job, the true unemployment figure would be 16%. When we add those people who have given up and stopped looking for work, the real unemployment rate is considerably higher, probably about 20%.

  7. yadayada

    am I missin’ sumpin’ here? I know I’s ignerint n all, but I don’ unnerstand….

    how the hell does this sentence make sense?–

    -”The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force.”-

    people leaving their jobs makes UNemployment rate go down?????? if this is how mainstremers and politicians think, it’s no wonder our economy is in the crapper.

    • proreason

      The stats are rigged to allow the government to look as good as possible.

      If they declare a person has stopped looking for work, than the person has “left the workforce” and is no longer used in the statistics.

      So, if everybody stops working or looking for work, unemployment is 0%.

      See what magic your government can do?

    • Liberals Demise

      You talk as if all this is supposed to make sense.
      I was at work during lunch when some one asked if there was anything dingleBarry did
      as President that was memorable. Even the black people were quiet.
      Almost 3 years and the decline of America has set sail.
      What an accomplishment.




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