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February 05, 2010


Banker Bob

Obama's stimulus plan is working! Unemployment rate drops dramatically to 9.7%! Now what do you all have to say for yourselves?

Charlie (Colorado)

Part of the key in using a teleprompter effectively is to make sure the hard words in the copy are written phonetically.


Employment fell by 20,000 last month, reflecting a plunge in construction jobs and a drop in state and local government hiring, figures from the Labor Department in Washington showed.

The "stimulus" isn't even good for making unproductive government jobs anymore. It's pure waste.

Economists surveyed by Bloomberg News forecast a gain.

I'm really starting to understand that cliche, "expect the unexpected". It seems like nothing happens in economic news except the exact same unexpected thing all the time.

“The labor market, six months after the economy turned positive, is beginning to find its bottom,” said Neal Soss, chief economist at Credit Suisse in New York, who forecast a payroll drop of 25,000. “We’re still teetering on the cusp of job growth.”

I'd say "precipice" not "cusp", to edge back towards the point of the original post (which was that the President would have been an embarrassing poseur if he'd been in my high school AP English class, because he's just not smart).


Denninger has an analysis here. The total number of employed and the labor participation rate (last two charts on the linked page) continue to decline:


The good news is if we just let the economy stagnate for only 12-24 more months, all those people on unemployment and messing up the statistics will be unable to collect any more unemployment and drop off the face of the earth and we will have "full employment" again!

Danube of Thought

What I have to say, Banker Bob, is that unemployment was at 7.5% when this clown took office.


--Obama sees dead people.--

Apparently he sees corpsemen rather frequently.
Here he is last May:

On this Memorial Day, as our nation honors its unbroken line of fallen heroes — and I see many of them in the audience here today — our sense of patriotism is particularly strong.
Dave (in MA)



--Obama's stimulus plan is working! Unemployment rate drops dramatically to 9.7%! Now what do you all have to say for yourselves?--

We were told that without Obama's stimulus plan unemployment might reach the ghastly peak of 8%. With his plan it went to over 10%.
Everyone knew then the economy was in freefall so their excuse that it was worse than they thought is a lie.

The claim that 9.7% should be cheered is kind of reminiscent of the VietNam era apochryphal quote that "we had to destroy the town in order to save it". That happened under a Democratic President with a Democratic Congress as well, I might add.

Here's a rather prescient article from Feb 09, precisely when Barry was telling us his stimulus would keep unemployment below 8%, telling us it would in fact drive unemployment up.


unemployment was at 7.5% when this clown took office

I think that's what it still is in NH, where Obama was yesterday... and where they don't tax wages or have a general sales tax. For some reason, he didn't mention that.


9.7% is great, compared to 10%. Compared to the 8% ceiling forcast by Obama its still rotten. I don't love the extra 200K dropped of the rolls either. At this rate we'll be back to 7.5% without creating a single new job. People have talked about a jobless recovery in the past but I think the term will take on new meaning under O-6bama.


The government IS creating jobs

Pasadena Phil

For the past year, the Team Obama has been manipulating the economic numbers in trying to manufacture the appearance of an inflection point in the economy. The game is to spin the current numbers against the revised numbers of the past into a positive. Well! Today's upward revision (it was leaked Wednesday and was a major reason for yesterday's sell-off) by a whopping 824,000 jobs of the number of jobs lost last year is an under-reporting of error of a stupendous 11%! How can anyone believe anything from a source that incompetent?

These guys are trying to re-ignite the "animal spirits" like the gamblers who think they can get back to even by doubling down. The further we go with these cynical schemes, the deeper the hole. Keep re-inflating the bubble. With 40x leverage on its balance sheet, the Fed is now the mother of all hedge funds. And by the way, the P/E ration on the S&P, north of 80. It hit an all-time high of 143 last year. And take out the phony bank profits coming from "mark to make believe", is the market over-priced or what?

Even today's today's report shows a continuing loss of construction jobs and the manufacturing jobs gained were just low-paying temporary jobs. The biggest bump in hiring was census workers.

That is why there is so much cash on the sidelines. All of the "positives" are dubious government spin on government funded "green shoots" that have no meaningful effect on what makes people like me invest and hire. Command economies don't work!

Pasadena Phil

Here's another problem with today's spin. The 9.7% unemployment rate (based on surveys) is being spun as a sign that more people are entering the job market and finding jobs. The fly in the ointment is that the payrolls (real numbers, not surveys) shrunk again. That makes no sense.

Steve C.

"No more coals to Newcastle. No more Hoares to Paris."

King George VI as quoted by Manchester in the 2d volume of his Churchill biography. Sir Simon Hoare was a British diplomat who bungled a sensitive mission to France and was called out for his incompetence in the British press.


The new unemployment numbers should put the brakes on Obama asking for another stimulus package...right? Bueller? Bueller?

Rick Ballard

"Today's upward revision (it was leaked Wednesday and was a major reason for yesterday's sell-off) by a whopping 824,000 jobs of the number of jobs lost last year is an under-reporting of error of a stupendous 11%! How can anyone believe anything from a source that incompetent?"

That's a misstatement and incorrect as well. The estimated 824K reduction in projected employment (not increase in unemployment) has been known for months. The actual revision came in at 902K (SA) or 930K (NSA), take your pick. There was an additional revision to the employment number of -1,363,000 (SA) in December.

Those reductions apply to the establishment data. The unemployment rate is calculated using the household survey data. Neither tax deposits for withholding nor HI contributions support the household data so we will be seeing a major revision of that -.3, probably to a +.5. That would mean a headline number of 10.2%, which would be consonant with withholding and HI deposits.

Employment is resting comfortably - it's just pining for the fjords a little. I'm sure it will be up on its perch, bright and chipper, soon. [soon in this instance means 'not later than 2013 or 2017', depending upon the outcome of elections].

Source - Employment Situation Summary




Pasadena Phil

Rick Ballard:

You are completely wrong. Employment is NOT resting comfortable. You can circumlocute you way around the statistics all you want but under-reporting unemployment by 824,000 (or 1,363,000) is a WHOPPING under-reporting. It is big enough to bring into question anything the government reports, just like bank profits. They are just making up the numbers.

Employment "resting comfortably"? You should get out more. Even Walmart and Sam's Club are firing people. And we are about to see maybe 30% of ALL retail stores closing this year. Stagflation is here.



You missed Rick's reference to a Monty Python skit, where the discussion is about a parrot that is dead. The shop owner is trying to convince the customer returning said bird not to believe his eyes.

So Rick is claiming that the economy is dead at the moment. And pining for the fjords.


Oddly, there is some good news on the economy. The tech companies are booming--Intel, Cisco, even Microsoft. At the same time, productivity has soared in an unprecedented way over this recession. It looks like nobody wants to hire but everybody is looking to cut costs with better IT. Big boom in data analytics, too.

None of that is going to do much in the short run for all the construction and heavy manufacturing and finance guys who lost their jobs, and it isn't really expansionary, but it looks like there are some positive steps businesses can take despite the policy uncertainty generated by the government.

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