Private employers hired more workers than expected in August, lifting hopes for the weak U.S. economy, but the nation’s unemployment rate rose for the first time in four months, suggesting the economy will struggle to grow through the rest of the year.
Private employers added a total of 67,000 jobs last month, according to the Labor Department’s August jobs report released Friday. That number was below the amount of jobs needed to keep up with population growth, but was better than expected. Both July and June’s private-sector job figures were upwardly revised. msnbc
Christina Romer gives the rundown on her last day at the White House -- no new stimulus is being considered:
There are all kinds of rumors flying. Would we expect anything less? Christina Romer explains why she's resigning her post as an economic adviser:
From the White House:
WASHINGTON - Dr. Christina Romer announced today her plans to step down as chair of the Council of Economic Advisers, effective September 3rd, to resume her position as professor of economics at the University of California, Berkeley.
President Obama said that Dr. Romer had long stated her desire to return to California, where her son will be starting high school in the fall.
As CEA chair, Dr. Romer is one of the key economic advisers who has met with the President on almost daily basis to help chart the response to the deepest recession since the Great Depression.
“Christy Romer has provided extraordinary service to me and our country during a time of economic crisis and recovery,” the President said. “The challenges we faced demanded more of Christy than any of her predecessors, and I greatly valued and appreciated her skill, commitment and wise counsel.
“While Christy’s family commitments require that she return home, I’m gratified that she will continue to offer her insights and advice as a member of my Economic Recovery Advisory Board.”
Dr. Romer said it has been the “honor of a lifetime” to serve the country and the President through such a critical time.
“While I look forward to returning to research and teaching, the opportunity to help shape economic policy these past 20 months, and to work with the other members of the economic team and my colleagues on the CEA, is one I will always cherish.”
Under Dr. Romer’s leadership, the CEA has provided the detailed analysis of economic developments and data critical to the development of the President’s economic policy.
Dr. Romer and the CEA’s careful analysis of the effects of health care reform on the overall economy, small businesses, and state and local governments were instrumental in crafting a better bill and making the case for its enactment, and she has been a powerful voice for sound, evidence-based economic analysis on a wide range of public policy issues.
As one of the most public faces of the administration’s economic policies she also has been a forceful and tireless advocate of additional measures to support the recovery and help the unemployed, including additional fiscal relief to state governments to prevent the layoffs of hundreds and thousands of teachers.
The trajectory of job growth is up, but the pace of growth is slow. Most of the 431,000 jobs for May were Census jobs, and in many people's minds, those jobs don't count because they're government jobs, even though Census workers could buy things and add to our economy because they had a job.
The Economic Report of the President is an annual report written by the Chair of the Council of Economic Advisers. An important vehicle for presenting the Administration’s domestic and international economic policies, it provides an overview of the nation's economic progress with text and extensive data appendices. Read the report here.
From Christina Romer's blog at the White House:
The economic challenges facing the Nation when President Obama took office were among the greatest in our history. Last January, the American economy was truly in freefall. Real GDP was falling at an annual rate of more than 6 percent and the U.S. economy was losing jobs at the devastating rate of almost 800,000 per month. Our financial markets, having narrowly avoided collapse in the financial panic of the early fall of 2008, were paralyzed with fear, and borrowers of all sorts, from households to small businesses to large corporations, were having trouble accessing the credit necessary for normal economic activity. As a scholar of the 1930s, I can say that the threat of a second Great Depression was both genuine and terrifying.
But as great as the immediate challenges were, our country’s economic problems were also deeper and more long-standing. For nearly a decade, typical American families had seen their incomes stagnate, instead of rising steadily as they had for generations. Much of the economic growth that the United States experienced in the past decade was fueled by consumers and the government running up large debts, aided by a financial system better at making short-term profits than managing long-term risks. Rapidly rising health care costs were squeezing both family incomes and the government’s budget. And as a country, we were failing to invest as we needed to in education, new energy technologies, and basic research and development. Read it all
Watch Obama speak about the budget here. Peter Orszag says health reform must get done in order to reduce costs. Without reform, the nation faces long-term deficits.
What's the higher priority: jobs or deficit. And the answer is: jobs, at least for the short term.
Q Has he chosen the need to fight the recession to create jobs as a higher priority than fighting the deficit?
MR. GIBBS: In the short term, absolutely. We have to get our economy moving again because one of the reasons that we've seen the budget deficit grow is that the economy has slowed down. We all know the extraordinary measures that had to be put in place in order to jumpstart the economy and we've seen some of the impacts of that as recently as Friday, with increased numbers in economic growth.
The President, as you heard in the State of the Union and throughout the first year, discuss the need and the necessity to get that economy moving again, and then to transition to address our mid- and long-term fiscal challenges.
I think many of the proposals the President outlines in here we have discussed -- non-security discretionary spending freeze; the President has supported and Congress thankfully passed last week a reinstitution of I think very simple commonsense rules that -- for pay as you go, that if we're going to spend money we're going to have to pay for it -- rules that were absent for a decent part of the last decade in which we saw deficits and debts skyrocket.
This is great news. First the economy grows, which means companies are producing more stuff, replenishing stock and people are wanting more stuff, then companies have to start hiring again.
The economy grew for a second straight quarter from October through December, posting a 5.7 percent annual rate, the fastest pace since the third quarter of 2003.
The Commerce Department report is the strongest evidence to date that the worst recession since the 1930s ended last year, though an academic panel that dates recessions has yet to officially declare an end to it.
The two straight quarters of growth last year followed a record four quarters of economic decline. Still, the growth at the end of last year was primarily fueled by companies refilling depleted stockpiles, a trend that will soon fade. AP
Romer:
Christina Romer, the head of the Council of Economic Advisers, called the growth "the most positive news to date on the economy" in a statement. "While positive GDP growth is a necessary first step for job growth, our focus must remain on getting Americans back to work. That GDP rose strongly in the fourth quarter of last year while employment fell and the workweek increased only slightly emphasizes the need for policy actions designed to help spur private sector job creation. The President is announcing today the specifics of his plan for a small business jobs and wages tax cut. This policy is designed to encourage businesses to respond to rising demand and output by taking the plunge and hiring new workers again."
Criticism of the growth--stimulus is ginning up the economy. Stimulus is working.
Little Miss Sunshine Liz Cheney helped make This Week a dreary, dreary show.
I was left with the feeling that we're all going to hell in a handbasket, from terror to the economy to healthcare. End times are now. The Cheneys should do us all a favor and get lost.
Her counterpart on the left Robert Reich has turned out to be a thorn in the side of the administration. Reich is still coming down from the disappointment that Obama isn't a liberal. There's a lot of negative forces out there.
It seems too many are hoping for the nation's failure for their own agendas.
Little Miss Sunshine's agenda is to keep pushing the incompetent narrative. She does a good job.
It was interesting, though, when George Will defended Harry Reid against Miss Sunshine's criticism of Reid.
2009 closed with a disappointing jobs report, but most are confident a turnaround is imminent:
But even with the poor end to the year, the pace of job losses has slowed dramatically from the beginning of 2009. There were 741,000 jobs lost in January, the worst total in 60 years.
Some economists said that this broader trend is more important than the bigger-than-expected losses in December.
"I don't see this as a setback. We're still on the right trend here," said Tig Gilliam, CEO of Adecco Group North America, a unit of the world's largest employment staffing firm.
Gilliam said he's expecting job growth to resume in the first three months of this year, perhaps as early as February, and that gains of about 200,000 to 300,000 jobs a month by the middle of this year are possible. CNN
Update: Watch Obama's remarks following his meeting with bankers here. Obama is going to give it another shot and speak to the "fat cat" bankers this morning, who say they're ready to step up. At 12:10, he'll speak on the economy. His remarks will be live streamed at WhiteHouse.gov and likely at msnbc.com.
Bankers attending:
Lloyd Blankfein, chairman and CEO of Goldman Sachs; Ken Chenault, president and CEO of American Express; Richard Davis, chairman, president and CEO of US Bancorp; Jamie Dimon, chairman and CEO of JPMorgan Chase.; Richard Fairbank, chairman and CEO of Capital One; Bob Kelly, chairman and CEO of Bank of New York Mellon; Ken Lewis, president and CEO of Bank of America; Ron Logue, chairman and CEO of State Street Bank; John Mack, chairman and CEO of Morgan Stanley; Dick Parsons, chairman of Citigroup; Jim Rohr, chairman and CEO of PNC; and John Stumpf, president and CEO of Wells Fargo.
Most economists say that jobs will begin to grow again in the second half of 2010. Most economists also say the stimulus boosted the economy. Those are facts. I find it hard to fathom that David Gregory doesn't grasp the difference between the definition of a recession and what Americans perceive as a recession. But Gregory needs to get his headline: the recession is not over. The media is just playing games. I hate the way the media rely on tricks to stir up controversy. Here's a blurb at Politico:
Romer says the recession’s not over, but Summers seems to disagree. (McConnell, of course, agrees with Romer.)
Economists have already pronounced the end of the recession. Factually, the recession has ended. Christina Romer, an economist, knows that the recession has ended. She's speaking in lay terms. She's saying what Obama always says-- that the recession isn't over until jobs come back. That's because most Americans don't know what a recession is, but they know what a job is. But we should be cheering the end of the recession, because it means the only way to go is up. Unless you're a republican. If you're a republican in Congress, you're hoping for another period of economic defeat, a "double dip" recession, so that you have more rocks to throw at the administration.
Here is the roundtable with loudmouth Jim Cramer, Alan Greenspan, Michigan Governor Jennifer Granholm and icky man Mitt Romney. Romney is such a bore and an arrogant bore at that. He reminds me a lot of Cheney. Fortunately, he didn't get a lot of speaking time. He didn't even need to be there. We all know what he's going to say. He views government as an evil entity.
U.S. job losses in November posted the smallest drop since the start of the recession and the unemployment rate unexpectedly declined, a sign the labor market is finally healing as the economy recovers. More at WSJ
Temporary workers are also on the rise, which is another positive sign. The increase in temp workers means companies need help but they are still cautious about hiring permanent workers:
The unemployment rate, calculated using a survey of households as opposed to companies, edged lower to 10% in November from 10.2%. Economists had forecast the jobless rate would remain at October's level of 10.2%, when it rose to the highest level since April 1983.
Employment fell in construction, manufacturing, and information, while temporary help services and health care added jobs.
Christina Romer warns not to get too excited yet:
The unemployment rate, which had risen to 10.2% in October, declined to 10.0% in November. This decline primarily reflects an increase in the number employed, as measured by the household survey. Despite the welcome decline, the unemployment rate remains unacceptably high. This underscores the need for the responsible actions to jumpstart private-sector job creation that the President highlighted at yesterday’s Forum on Jobs and Economic Growth at the White House.
There are many bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. But, it is clear we are moving in the right direction. WH blog
Obama will speak about jobs at 11:50 am eastern. What's to come from the jobs summit? A jobs bill:
GDP growth progress but jobs need to grow, Obama said:
The economy is growing again, thanks to the stimulus. To see what that growth looks like, check this out.
The U.S. economy, propelled by stimulus-driven gains in consumer spending and home building, grew at a 3.5 percent pace from July through September, the first expansion in more than a year. Bloomberg
Kathleen Stephansen, chief economist at Aladdin Capital Management LLC, warns that the growth is mostly due to the stimulus. People still aren't spending and there hasn't been any increases in wages. Amen. That means jobs will take longer to recover. Obama speaking in the Eisenhower Executive Office Building:
"I am gratified that our economy grew in the third quarter of this year. We've come a long way since the first three months of 2009, when our economy shrunk by an alarming 6.4 percent. In fact, the 3.5 percent growth in the third quarter is the largest three-month gain we have seen in two years. This is obviously welcome news and an affirmation that this recession is abating and the steps we’ve taken have made a difference," he said. "But I also know that we've got a long way to go to fully restore our economy, and recover from what has been the longest and deepest downturn since the Great Depression." In opening remarks to the group - which included members of the U.S. Chamber of Commerce - the president acknowledged Karen Mills, the administrator of the Small Business Administration, and Virginia Sen. Mark Warner, who was running late and Obama said would arrive "in a hot second." Politico
Peter Orszag, Christina Romer, Larry Summers, Timothy Geithner, Jared Bernstein
An inside look at Obama's economic team and a close-up on Larry Summers (loathed by the left) in the New Yorker's money issue:
In early August, Lawrence H. Summers, President Barack Obama’s top economic adviser, accompanied Vice-President Joseph Biden aboard Air Force Two on a trip to Detroit. Michigan has a fifteen-per-cent unemployment rate, the highest in America, and Detroit has become virtually a ward of the federal government: the United States now owns ten per cent of Chrysler and sixty-one per cent of General Motors. The purpose of Biden’s trip was to announce an additional $2.4 billion in federal grants, to help jump-start the electric-car industry; more than a billion will go to battery and auto manufacturers in Michigan. Summers, who is the director of the National Economic Council, the White House office that coördinates all economic policy in the Obama Administration, has rarely travelled outside Washington this year, and was in Detroit on a fact-finding mission. After nearly a year of debate about how much federal intervention was needed to beat back the recession—a debate that started during the end of the Presidential campaign—he was somewhat optimistic. The principal measures that Obama had taken—implementing the stimulus package, rescuing the banks, restructuring the automakers—had begun to stabilize the economy. In a speech three weeks earlier, Summers had put it this way: “We were at the brink of catastrophe at the beginning of the year, but we have walked some substantial distance back from the abyss.” It seemed like a good moment to check in on the government’s investments in Michigan.
Summers reminds me of record producer Rick Rubin, who often sleeps to produce. Summers catching a few winks:
Summers looked exhausted. The previous day, he hadn’t left the White House until after midnight, and he was up at dawn to make the flight to Detroit. As Granholm talked about layoffs, he eyed a bottle of soda on the table in front of her. Summers drinks many Diet Cokes a day, and he was badly in need of one. He got up, his shirttails peeking out from underneath his jacket, and shuffled over to a counter at the side of the room in search of a caffeinated beverage. All he found was an empty glass, which he carried back to his seat. The manufacturers took turns explaining their plight. Wes Smith, of E. & E. Manufacturing, argued that although the public hates bailouts, “helping manufacturing is popular.” An executive from Atlas Technologies quoted Jeffrey Immelt, the head of G.E., who had recently said that manufacturing jobs should make up twenty per cent of total employment in the United States—twice what it is now. Several of the participants argued that the bank bailouts hadn’t revived lending in their industry, so the government needed to intervene. Ned Staebler, one of Granholm’s top economic advisers, explained excitedly that the new assistance program for struggling companies had already approved its first loan even though he hadn’t advertised the program. As they spoke, Summers caught Granholm’s attention and mimed a request for some of her soda. She moved the bottle closer to him, smiling. He drank quickly, but it didn’t help. He shifted his weight in his chair. He made jerky, shaking motions with his head. He ran a hand through his hair. Still, by the time Mario Sciberras, of Saline Lectronics, was speaking about what he would do with one of the new loans, Summers was asleep. Read more at the New Yorker
The stimulus is having an effect, says Christina Romer, economic adviser for the White House.
The administration is making many attempts at trying to explain economics to the American people, but as CNN's Candy Crowley says, Americans without a job or with a house under water could care less about economics. They just want someone to give them a job. If people have a house under water, at one time that house was the cash cow for flat screen TVs and so on. Home equity should've never been tapped for such things. I think economics and financial literacy should be part of Obama's education reform. It should be taught K-12. Imagine that.
