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What Major Media Got Wrong About That August Jobs Number

What Major Media Got Wrong About That August Jobs Number

Reprinted with permission from DC Report

"Disappointing" is the consensus of newscasters about the August jobs report. They are wrong.

The economy added 235,000 jobs as Covid made a big comeback, especially in the South where governors spurn science and people stay away from bars, restaurants and shopping malls.

Most news reports lacked context about how rare it is to add that many jobs in a month. Most of the reports I read also failed to note that under President Joe Biden jobs are growing at more than triple the rate under Trump before the pandemic began.

Overall, the American economy is growing even faster than the six percent that Trump promised voters. Pre-pandemic, Trump delivered barely half that growth rate.

July was excellent with more than a million jobs added. In June, the economy added 962,000 jobs. That makes the August number seem small, but only by very short-term comparison.

Under Biden, the economy has added an average of 636,000 jobs per month, the federal Bureau of Labor Statistics "all employees" report CES0000000001 shows. That's close to 4.5 million jobs added since Biden became president on Jan. 20.

On Donald Trump's watch – before the pandemic – the economy added only 188,000 jobs per month. President Barack Obama did better than that once the collapsing economy he inherited turned around in early 2010; more than 200,000 jobs per month on average were added.

Genuinely Awful

Looking at Trump's entire time in office, his jobs performance was genuinely awful. On Trump's watch, the economy lost an average of 2.8 million jobs per month. That's primarily because in March and April of 2020 the economy lost 22.4 million jobs.

Since Ronald Reagan assumed office four decades ago, only one president has added an average of more than 235,000 jobs a month. That was Bill Clinton. During Clinton's eight years, the economy added an average of 242,000 jobs per month.

Clinton did even better than those figures suggest because there were about 62 million fewer Americans on his watch. Adjust for that smaller population and the Clinton economy added the equivalent of about 297,000 jobs per month with today's population of 333.3 million people.

In August, the economy added 37,000 manufacturing jobs. Under Trump 1,800 more factories closed. Thousands of factory workers lost their jobs, primarily because of his disastrous and ill-informed tariffs.

The most interesting August job developments were in the delivery of goods compared with the traditional retail trade and in services like bars and restaurants.

Jobs in transportation and warehousing, which benefit from the home delivery of products, grew by 53,000 and brought the total to a modestly new high with 22,000 more such jobs than before the pandemic.

Retail employment – think clerks at malls – declined, with 29,000 fewer jobs in August and 285,000 fewer than in February 2020, before the pandemic.

Bars and restaurants shed 42,000 workers, evidently because fear of coronavirus infection is keeping more people at home. That number may worsen in the months ahead as the anti-vaxxers, sheep worm remedy users and mask refusers spread more gratuitous disease and death.

Trump Faltering In 2019

The Trump economy was faltering even before the pandemic, as I reported here citing official government data. Trump's overall economic performance was subpar, as I detailed from official government data in April 2019 when I gave Trump a grade of C for economic performance.

Candidate Trump repeatedly said he would produce 6% annual economic growth. He only got above 4% for one quarter. Even that was only because businesses stepped up purchases ahead of his disastrous tariffs.

After three years in office, economic growth under Trump was worse than every other president after Harry S Truman except for George H.W. Bush.

Under Biden, the economy grew at a 6.5% annual rate from April through June, the second quarter of this year. the Congressional Budget Office estimates that "real GDP will grow by 7.4 percent in calendar year 2021."

Happy Go Magic Land

Many Trump fans refuse to accept that Trump was bad for the economy and jobs even before the pandemic. These Trumpers seek solace in the childish fantasy world of Happy Go Magic Land.

And don't forget, Trump ran in 2016 promising to pay off the entire federal debt in eight years. Instead, during his four years, it grew and grew, in good part due its use to finance tax cuts for the wealthiest Americans and large corporations.

So read the 235,000 jobs added in context. It's a sharp fall from June and July, but that's mainly due to Covid making a comeback in states headed by Republican governors who deny science and thus kill their own citizens.

Viewed in context, the 235,000 jobs created in August are a clear positive for America.

Kellyanne Conway

Kellyanne Blasted When She Pops Up To Mock Jobs Report

Reprinted with permission from Alternet

Former Trump White House senior counselor Kellyanne Conway is getting blasted for gloating over a disappointing jobs report.

235,000 new jobs were created, and unemployment fell to 5.2 percent, the lowest in 18 months. President Joe Biden spoke about the report Friday morning, saying it "means that we have been adding an average of 750,000 jobs per month, on average, during the past three months."

"And in the three months before I became President? Well, we were adding 60,000 jobs a month," he noted, calling the "total job creation in the first seven months of my administration ... nearly double — double any prior first-year President."

But to Conway, it was all bad news – which appeared to delight her.

"Read it and weep," she tweeted, along with other remarks.

Many were angered by what they saw as her rooting for the economy to fail in order to prop up her former boss's horrific record.

In a rare moment of apparent anger, MSNBC host Chris Hayes unleashed his fury on Conway's comments, saying she worked in a White House "that was objectively pro Covid and helped get many many people killed unnecessarily."

"I hope," he added sardonically, she is "not spiritually haunted by the mass death and misery she so blithely facilitated."

Hayes was responding to Washington Post columnist Catherine Rampell, who noted that "this is a strange thing to gloat about. the slowdown in hiring is driven by people refusing to get vaccinated and thereby enabling delta to spread (and kill people) faster."

Those "people refusing to get vaccinated" are in large part almost entirely Trump supporters.

Hayes and Rampell were far from the only ones angered or perplexed by Conway's remarks.

U.S. Stocks Lower After Disappointing Jobs Report

U.S. Stocks Lower After Disappointing Jobs Report

New York (AFP) — Wall Street stocks Friday moved lower in early trade after the Labor Department reported the U.S. economy added just 142,000 jobs in August.

About 50 minutes into trade, the Dow Jones Industrial Average dropped 35.69 points (0.21 percent) to 17,033.89.

The broad-based S&P 500 shed 4.30 (0.22 percent) to 1,993.35, while the tech-rich Nasdaq Composite Index lost 10.71 (0.23 percent) at 4,551.58.

Analysts had expected the U.S. economy to add well more than 200,000 new jobs in August, to maintain a six-month streak over that benchmark. This would have demonstrated consistent strength in the US economy.

However, the weak jobs report “may be keeping concerns about a sooner-than-expected beginning of rate hikes by the Federal Reserve at bay,” said a market note from Charles Schwab.

Dow component Merck rose 1.1 percent after the U.S. Food and Drug Administration approved its pembrolizumab drug to treat metastatic melanoma.

Apparel retailer Gap dropped 4.1 percent as August comparable store sales fell two percent from last year.

Apparel maker and retailer Michael Kors Limited fell 4.1 percent to $76.67 as it announced the sale of a 5.7 percent stake held by Sportswear Holdings Limited. The offering will price at $76.75 per share.

Supermarket chain Kroger rose 0.4 percent on news that it will hire 20,000 employees as it pursues growth.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.43 percent from 2.45 percent Thursday, while the 30-year fell to 3.20 percent from 3.21 percent. Bond prices and yields move inversely.

AFP Photo/Spencer Platt

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August’s Weak Job Growth Appears To Be Anomaly, Economists say

August’s Weak Job Growth Appears To Be Anomaly, Economists say

By Jim Puzzanghera, Los Angeles Times

The disappointing 142,000 net new jobs added to the economy in August — the second straight month of slower growth — appears to be an anomaly and is not reason to panic that the recovery is faltering once again, economists said.

Although the Labor Department figures released Friday were the worst since December, it still was just one bad month after the best job creation streak since the dot-com boom, they said.

And there are some key reasons why the August report might have understated the health of the labor market, such as a grocery store strike in New England and seasonal adjustment problems with auto manufacturers.

“I don’t want to sugarcoat it. This this wasn’t a good report,” said Gus Faucher, senior economist at PNC Financial Services Group. “But I do think the economy is better than this and the labor market is better than this.”

The Obama administration echoed those sentiments Friday.

“Although the pace of job gains in August was below recent months, the broader trends are moving in the right direction,” said Jason Furman, chairman of the White House Council of Economic Advisers.

But Douglas Holtz-Eakin, a former Bush adminstration official who was a top economic adviser to 2008 Republican presidential nominee John McCain, said the report was bad news for the recovery.

“The spin will be to ignore this as a data anomaly, but the reality is that it is another piece of evidence against the notion that the economy will accelerate significantly in 2014,” said Holtz-Eakin, president of the American Action Forum think tank.

Job growth in August was well below economists’ expectations for 230,000 net new jobs and at least temporarily dashed growing optimism that the labor market finally had settled into strong and consistent growth.

The economy had added more than 200,000 jobs for six straight months, the best stretch since 1997.

The Labor Department also revised down job growth for June and July by a total of 28,000 positions.

The unemployment rate dropped a tenth of a percentage point to 6.1 percent last month, as expected.

But the drop came because the labor force participation rate also fell. It ticked down to 62.8 percent, matching the lowest level since 1978. The number of discouraged workers rose by 34,000 to 775,000.

Some key sectors had poor showings in August, led by retail.

The industry shed 8,400 jobs after adding nearly 21,000 in July. A key factor was the loss of 17,000 jobs at food and beverage stores in August.

But the Labor Department noted the industry was affected by a strike at the Market Basket grocery store chain in New England, which has 25,000 employees.

The strike ended last week.

“The strike did take people out of the workforce and the strike was settled,” said Jack Kleinhenz, chief economist at the National Retail Federation.

He said it’s not time to panic about the jobs market, noting other indicators imply the economy is doing better.

“When you think about the economy as a jigsaw puzzle, this is a puzzle piece that just doesn’t fit,” Kleinhenz said of the August jobs report. “I don’t believe it’s a cause for alarm, or that the direction of the economy is changing.”

In a positive sign for retail, the Kroger Co. said Friday it would hire 20,000 workers. It’s the nation’s largest grocery store chain.

Initial jobless claims have been averaging about 300,000 a week, a low level that indicates a healthy labor market. And private readings on manufacturing and service sector growth have pointed toward strong growth.

“There’s been nothing out there right now flashing a red light saying expectations need to be scaled back,” said Mark Hamrick, Washington bureau chief of Bankrate.com, a financial information website.

“I really can’t find any reason to believe that this is something that is more than a one month occurrence,” he said.

After adding 28,000 positions in July, manufacturers last month did not increase their payrolls at all for the first time in more than a year.

A key reason was employment at motor vehicle and automotive parts factories falling by 5,000 after an increase of 13,000 positions in July.

But those numbers appeared to be misleading.

Auto sales have been strong and that led to changes in when the industry shut down factories for the annual summer retooling, which affects the Labor Department’s seasonal adjustments to the jobs numbers.

“Firms in this industry laid off fewer workers than usual for factory retooling in July and recalled fewer workers than usual in August,” said Erica L. Groshen, commissioner of the Bureau of Labor Statistics. “This contributed to a seasonally adjusted increase in July and decrease in August.”

Some economists expect August’s job growth numbers to be revised up next month.

Faucher predicts the number will end up closer to 200,000, which he believes is the underlying pace of job growth.

“It was going to be difficult to keep up that 200,000 (job growth) streak, but I don’t’think its going to be difficult to keep up that 200,000 pace,” Faucher said.

Although the economy might fall below that figure for a month or two, that should be the average going forward, he said.

Even with August’s poor performance, job growth is averaging 207,000 during the past three months.

AFP Photo/Justin Sullivan

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