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Sunday, October 23, 2016

A disappointing initial jobs report for March of only 88,000 jobs gained sent stock markets tumbling Friday. Most of the losses were erased by the end of trading, with the Dow shedding just over 40 points. But the S&P 500 still ended up posting its worst week of the year.

The most significant number in the report was 268,000 — the revised job gains number for February and one of the best jobs reports since the financial crisis ended. January was also revised up, to 148,000 jobs.

The unemployment rate fell to 7.6 percent, mostly due to the labor force shrinking by 496,000 as people stopped looking for work and Baby Boomers retired.

The March report may still be revised up, but the abrupt decline in jobs created along with this week’s surge in unemployment claims suggests that something is suddenly amiss in the economy. The end of the payroll tax holiday and the Bush tax breaks went into effect on January 1.

Hmmm. What happened in March that could have changed things?

“It is important to bear in mind that the March household and payroll surveys are the first monthly surveys to look at employment since the beginning of sequestration,” writes Alan B. Krueger, chairman of the president’s Council of Economic Advisers. “While the recovery was gaining traction before sequestration took effect, these arbitrary and unnecessary cuts to government services will be a headwind in the months to come, and will cut key investments in the nation’s future competitiveness.”

Krueger points out that Congressional Budget Office has estimated that the sequester will reduce employment by 750,000 jobs by the end of the year.

Of course, the sequester’s negative effects are not only economic. With Medicare reimbursement payments cut by two percent, some providers have begun to turn away patients. Thousands of cancer patients have already been refused treatment as the sequester makes it impossible to deliver costly chemotherapy drugs and stay in business.

Most of the other negative impacts of the sequester make only local news because the people they affect — the poor, seniors and veterans — lack the power to focus politicians and media on their plight.

The sequester hits just as the housing market is really showing signs of recovery and the economy is heating up. But the news isn’t entirely bad, says The Daily Beast‘s Daniel Gross:

Recouping all the jobs lost in 2008 and 2009 is a multiyear project. And the economy has made great progress. Since the bottom in February 2010, the private sector has added 6.45 million jobs. In the past year, the economy added 1.9 million jobs in total. And so far this year—January, February, and March—the economy has added about 500,000.


AP Photo/J. Scott Applewhite

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  • republiCONsanddemsarebothsuck

    Sequester? Really? How about the fact that the assholes in washington with the rose colored glasses are going to have to admit that we are in a depression?

    The rigged system that clinton created is soon going to bite them all in the ass.

    Prediction: DOW will start to drop 500 pts weekly soon.

    Not due to the sequester. Due to Obama’s ineptness.

    • Independent1

      What planet is that you’re living on you say?? Pluto!!

    • ralphkr

      Actually, the rigged system that Reagan (you remember voodoo Raygun and his obeying Nancy and her astrologer, don’t you?) created has been biting the US in the ass for some time nos.

    • AlphaPlus

      The word is ineptitude, not ineptness, and seems we shouldn’t be taking diagnoses or predictions from somebody too stupid to know the difference! When your prediction doesn’t come true, will you then pull your head out of your ass and admit that you are wrong?

  • Lynda Groom

    This number will be increased in a couple of weeks. The final figure will improve, however still short of what is needed to boost the economy even further. If Congress would pass something in the nature of a JOBS bill the country would be in much better shape. Don’t hold your breath waiting for them to do anything positive on the job front.

  • An insignificant drop in the Dow Index is not a sign of trouble, and should not be blown out of proportion. Along the same lines, a disappointing monthly increase in job creation is also not a sign of economic woes.

    The sequester, when compared to our GDP and the annual Federal government budget, is miniscule. Its impact is likely to be felt in our inability to invest in things we need to strengthen our economy, achieve sustainable growth, achieve full employment, and fix the things we have neglected for decades in favor of ill-conceived crusades and irresponsible fiscal policies. The USA does not need a European-style austerity program which, by necessity, would increase unemployment, erode consumer confidence, and impact our business sector. Our economy is recovering, slowly but surely. What we need is public and private sector investment.

    Our fiscal and economic problems not caused because we are spending too much, they are caused because we refuse to pay for what we need and because instead of investing in projects that help us grow as a nation, and be competitive, we waste it in ideological quests and in helping the top 2% who already own 2/3 of our national wealth.

    • republiCONsanddemsarebothsuck

      Thank obama for the great job he has done over the past 5 years.


      • Yeah, George W. Bush did such a great job.

        The Right Wingers just can’t stand to give President Obama credit for anything, particularly job growth.

      • The unemployment rate in January 2009 was 7.8% and climbing. It is now 7.6% and dropping. The DOW was at 6,500 points, it is now over 14,000 points. Our financial institutions were on the verge of collapse, and taxpayers money was needed to save them. Our financial institutions are now solvent and making a profit. GM and Chrysler were facing bankruptcy, both are now profitable. Bankruptcies and foreclosures were at record levels, they are back down to normal levels. Construction had come down to a halt, it is again flourishing and real estate sales are up. We are out of Iraq, and will be out of Afghanistan by next year. And the list goes on.
        It must be hard for a Republican to accept the reality of their follies and the incredible accomplishments made by the Obama administration, in spite of all the obstructionism put in front of him to ensure he cannot govern, to ensure our economy remains unstable and the unemployment rate remains higher than it should have been, had it not been for their overt hatred, intolerance, greed and ideological obstinacy.

        • sigrid28

          Another reason for the continuing drum beating against growth under Obama, is that Republicans hope the public will not notice that higher real estate sales may be a feature of the higher Dow and other indices, measuring not how well the 98% are doing but how well the 2%–who invest in the stock market–are doing. Banks and pension funds are big investors in real estate, but banks are still holding back on lending, supposedly because of uncertainly about economic recovery. They will publish that canard until they own a substantial amount of the real estate they could not grab through foreclosures. When the 2% has grabbed up all it possibly can, enriching already thick portfolios with more stocks, bonds, and real estate–and locking up as much as it possibly can in off-shore accounts–the corporate branch of the 2% may start hiring in a modest way, causing a slight improvement in the job market, just enough to make the poor suckers in the 98% think that economic recovery has finally come their way.

    • Independent1

      Dominick, you mentioned the European-style austerity program not being what America needs. So just to confirm for our readers here that you are so correct, here’s just a brief excerpt from a Huffington Post article of April 4th to give everyone a brief picture of what Europe’s austerity program has done for them over the past 6 years (a picture of exactly what it would have done for America – Europe still has 20 million unemployed):

      Historians will look back to chaotic financial events in late March/early April 2013 on the tiny island of Cyprus as the start of a new and more dangerous phase in Europe’s crisis. Now, after years of mounting debt and economic problems from Portugal and Spain to Greece and Italy, Europe is entering what may be an era of rising challenges to its democratic institutions.

      A period of political turmoil could lie ahead. The fundamental cause is a lack of public trust in the ability of elected politicians to revive economic growth and employment, combined with pervasive skepticism about the honesty of many of those wielding power. Unemployment across the European Union exceeds 20 million people and coming months will see the total rise. The outlook for growth — even from what many experts would consider to be the most optimistic of sources, the European Union’s own experts (see table below) — is so dismal that it offers absolutely negligible hope for a serious rise in employment in any of the major economies and those in biggest current difficulty. No wonder that there is political unrest.

  • docb

    Dbet is money ALREADY spent..$11 Trillion and counting on two unnecessary Wars..etc! The repubs just do not want to pay for what they racked up…Where the real pay of the repub sequester is is in the mot vulnerable..t=The rich are already hiring private security to shore up their compounds..and the rest won’t be a problem for them!

    • ralphkr

      The best thing is that the Republicans stacked up huge amounts of debt OFF THE BOOKS that went on the books after Obama took office and now they can blame their debt on Obama.

      • docb

        That obviously is not selling to those like us, ralph! The majority, 72%, disapproves of the repub baggers!

  • charleo1

    The Federal Reserve has been engaged in something called, “quantum easing?”
    Something I’ll admit, I had never heard of before they were already doing it.
    But, if I understand the concept, the Federal Reserve is buying huge chunks of
    collateralized debt, still on the books of major financial institutions. Mainly because,
    the market has yet to attach a value to it. And the institutions which were supposed
    to set up a kind of open air market and establish a baseline price. And resolve this,
    “toxic assets,” hangover. Thereby rebalancing their debt to assets ratio, and freeing
    up monies to loan to businesses for expansion, and so forth. Have not done so,
    because the large holders have simply refused to sell at any price below what they
    originally paid at the height of the housing bubble. Uncle Sam has allowed them to
    keep the huge liabilities on their books, by essentially giving them all the money they
    need at zero interest, to preform their primary function of loaning money. While
    pretending the huge globs of debt down in their basement, so to speak, doesn’t exist.
    This is what the Fed has been buying, in order to make more money available.
    The reason all efforts to stimulate the economy by injecting cash in this manner
    have only resulted in minimal improvements, is the system of wealth distribution
    in the economy itself, is so structured to funnel money to the top of the food chain,
    where about 80% of it sits in the bloated bank accounts of only a few thousand
    people. Whereas, in the past, this mixture of low interest rates, and cash injections,
    would have set our former economy on fire. Surely brought on a round of inflation,
    and called for immediate measures to cool down an over heated economy. Yet,
    the enormous amounts of Federal Reserve dollars, other than weakening the
    buying power of the dollar on commodities like oil, who’s price is set globally.
    Have barely registered a blip, in terms of increasing the GNP. For the single, unavoidable, reason, 80% of our economy is running on 20% of the available
    capital. And, the direct routes of priming the economy, and getting capital into
    the hands of consumers, have been cut off, by a political process, bent on austerity.
    the money never reaches 80% of the economy.

    • ralphkr

      Presented for your consideration, charleo: If instead of handing over billions to financial institutions we had doubled unemployment, SS, and VA payments. Well over 90% of that money would have been spent and depleted stock available which would have cause factories to fire up to replenish supply lines. We would have a pretty good economy now with lots of workers paying taxes. Instead that money was used to buy back stock, buy other businesses to be folded in (laying off workers), invested overseas, or just socked away. US businesses have a huge amount of cash idle in their coffers because there is little demand for product due to fear of purchasing by the employed and the inability to purchase by the jobless.

      No, I do not get unemployment, SS, or VA but do have investments in the market.

      • charleo1

        It makes sense to me! And, I don’t consider myself an expert, or
        particularly bright, as far as that goes. But, we have this highly
        reconfigured, and slanted system, where, $8.00, of every $10.00,
        not directly placed into the hands of the average person. Either by
        unemployment/Social Security/ VA/ benefits. etc. Never makes it’s way
        into the general economy. So, we’ve got this one group constantly
        calling for more money to be placed, and kept in the hands of probably
        less than a thousand people. Counting the CEOs, of the largest retail,
        financial, manufacturing concerns in the Country. The, “job creators,”
        they call them. Then, the other group, that more or less agrees, that
        regular Americans, need to make do with less. Less SS., less healthcare,
        and lower wages. Just not as little, or as low, as the first guys insist. While both, seem to agree, that 8 dollars, out of every 10, is very thin gravy, for
        such an elite group. But, they will just have to suffer along, with their record
        profits, made at the expense of the American Middle Class. Until the Middle
        Class in Southeast Asia, and China, develop into the largest consumer
        based economy, in world history.

  • MrBeale

    “Thousands of cancer patients
    have already been refused treatment as the sequester makes it
    impossible to deliver costly chemotherapy drugs and stay in business.”

    And yet, it seems 90% of the stories about the effects of the sequester focus on the White House tours.

    Screw you, MSM.

    • ralphkr

      That is because the White House tours are easy to cover but poor people not being treated are of no interest to the real citizens, i.e. the top 10%.