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The advanced estimate of 4th Quarter 2009 GDP has just been released, indicating that the economy grew at a rate of 5.7% in the last three months of last year.  While 3.4%of that was related to the restocking of very lean inventories (meaning 2.3% was not, which ain't bad), it is well to remember that, regardless of the source of GDP growth, whenever YoY GDP growth has been in excess of a little more than 2% a year, it has always indicated job growth. In the year 2009, the initial estimate is that economy grew at a rate of 0.8%.  I’ll show you the very tight correlation between GDP growth and job growth below, as well as why it is very likely that this quarter - the first three months of 2010 - the economy is growing at a rate in excess of 2%.

UPDATE:  Bonddad thinks it is a great report.
-----

In several prior diaries, I have discussed "Okun's Law," which is an economic rule of thumb that for every 2% change in GDP, there is a 1% change of unemployment in the same direction.  As a corrolary of  that rule, if you take the year-over-year percentage rate of GDP growth, and subtract two, that should give you, roughly, the percentage of growth or contraction of jobs.  

In the graphs below, I have made use of this corrolary where the blue line represents GDP growth minus 2%, for example,  2% YoY GDP growth - 2% = 0% on the graph. The red line is YoY nonfarm payrolls, on the same scale. Here is the immediate post-WW2 period:

Here are the 1970s and early 1980s recessions:

Here is the era of "jobless recoveries" up until the present:

Notice how well the red line tracks the blue line, and how peaks and troughs are typically ~2% or less apart.

Here is GDP for the 4 quarters of 2009:
-6.4% (Q1 2009)
-0.7% (Q2 2009)
+2.2% (Q3 2009)
+5.7% (Q4 2009)

Thus, for the entire year, GDP was +0.8%.

In the graphs above, the red line is for YoY payrolls. The actual bottom in payrolls is somewhere in the middle of the year where YoY growth = 0%. Beginning with the 1948 recession, here is the number of months after troughs in jobs and YoY GDP growth in excess of 2% (in descending order, in months):

( - 9)( - 8) ( - 6) ( - 5) ( - 4) ( - 4) ( - 3) ( - 2) ( - 2) +7

In case you weren't sure, the +7 outlier is the extremely weak "jobless recovery" of 2002-2003 where YoY jobs didn’t go positive until 7 months after YoY GDP hit 2%.  In all other cases, including the 1992 "jobless recovery", jobs were added first.

About the "Blip"

Both Prof. Paul Krugman and Calculated Risk have called the good GDP reading  a "blip" that can be attributed to inventory restocking. The implication for the blogosphere being, of course, that it will momentarily pass and we will be back in negative GDP pronto, even though that is not what either are saying. Krugman thinks the odds against. a double-dip are 60%- 70%. CR sees 1% to 2% growth. As indicated above, Q4 2009 GDP grew at 2.3% even without restocking.  Their template is the temporary bounce following the 1980 recession which promptly resolved into the very deep 1981-1982 recession.

While GDP is likely to subside, the double-dip after the 1980 recession has a very simple and straightforward explanation: Paul Volker of the Fed raised the Federal Funds rate from 9% ti 19% in 6 months, effectively killing the economy and employment in order to kill inflation. Here's two graphs showing it. In the first, the Fed Funds rate is in blue, and the GDP in red:

In the second, the same Fed Funds information is in blue, and jobs are in green:

Like I said, the Fed doubled interest rates and killed both GDP and employment. Unless the Fed does the same sort of thing in the next couple of months, a repeat performance is very unlikely. It's true that inventory restocking will enhance GDP readings, but that is commonplace at the beginning of economic expansions. Take a look at this graph of annualized GDP growth from 1980 to the present:

The graph shows Krugman's exemplar "blip."  Notice that there were several quarters of actual job growth afterward.  Compare this with  what happened after 1982 -- there is a full year of +7.5% GDP growth from early 1983 to early 1984, that slowly tails off thereafter. Contrast this with the lackluster GDP growth of under 3% in the first 3 or more quarters after the end of the 1991 and 2001 recessions.

The Outlook for Early 2010

The quick growth of Industrial Production of the last 6 months shows that this economic expansion has much more in common with the 1983 expansion than the 1992 and 2002 ones. Yes,strongly positive GDP will subside as inventory restocking fades, but that by no means foretells a double-dip.

Indeed, on a year-over-year basis, with the exception of 2003 the Leading Economic Indicators are more positive at about +6.5% to 7% than they have been at any time since the mid-1980s, as shown on this graph that is current through November:

The simple fact is, the first 3-6 months of this year are probably going to show growth, and indeed more strong growth than few dared to hope for in 2009.

What does this mean about JOBS?

Assuming the worst case scenario (of 2002-03), if 1Q 2010 is 2.3% or more higher than 1Q 2009 GDP, YoY payrolls will show no losses by August 2010, suggesting a trough in February or March.  Under any other scenario, jobs are at their trough now (or revisions will show that we are already past it).  Blip or no Blip.

As I said above, the extremely close fit between % changes in GDP and % changes in jobs on a year-over-year basis.  Generally speaking, take the YoY %age change in GDP, subtract 2, and you are probably within a percent or two of the YoY % change in jobs, with a lag of a few months.

But the YoY change doesn't tell us about when we begin to add jobs coming out of a recession.  For that we need to compare changes in GDP with monthly gains or losses in payrolls, which is what I've done below.

First, let's look at a graph of the 1992 "jobless recovery."  YoY GDP is in blue (right scale, note I am not subtracting 2 in this graph), monthly gains/losses to payrolls is in red (scale to the left, in 1,000s):

Once YoY GDP turned positive in 4Q 1991, there was only one more month in 1991 and one in 1992 where jobs weren't added to the economy.

Next is the very lackluster "jobless recovery" of 2002-03:

The offshoring of manufacturing was in full swing by this time, and only 3 months of 2002 showed job gains (June, October and November) while GDP was positive  over 1% throughout, reaching a YoY gain of just under 2.3% in 2Q 2002.  Once YoY GDP hit 2% consistently beginning in 2Q 2003, jobs finally were added to the economy on a consistent basis.

 Finally, here is the "Great Recession":

We learned this morning that 4Q 2009 GDP was 5.7%, giving us a YoY GDP of 0.8%.  The Leading Economic Indicators virtually guarantee another good GDP number for Q1 2010, making it very likely that we will have YoY GDP in excess of 2% this quarter.

Strictly going by the GDP, if the economic expansion is more like 1992, we are going to start adding jobs consistently now. (Based on increases in industrial production, retail sales, and declining layoffs, I think this is more likely). At Briefing.com, the consensus if for +50,000 payroll growth in January when that number is reported next week. Contrarily, if the expansion is more like 2002, we are going to add jobs sporadically in some months and not in others.

  What everyone is watching is sustainability.  If gas prices go up too much, or as the effect of last year's stimulus plan begins to wane, can gains be sustained?  And noboby is talking about declining unemployment yet.  On that, the jury is very much out.

Originally posted to New Deal democrat on Fri Jan 29, 2010 at 05:39 AM PST.

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Comment Preferences

  •  Tip Jar (166+ / 0-)
    Recommended by:
    Lupin, JekyllnHyde, Aexia, fladem, Paleo, MiklCraw4d, Odysseus, askew, AaronInSanDiego, zonk, Gooserock, zubalove, Fabienne, ablington, frisco, Newsie8200, MarkInSanFran, khyber900, missLotus, ecostar, whenwego, dvogel001, Ian S, Dont Just Stand There, Larry Bailey, nargel, egarratt, kitebro, Jesterfox, Pangloss, Cedwyn, Cixelsyd, wader, Dallasdoc, Winnie, grannyhelen, Scarce, tomjones, CanYouBeAngryAndStillDream, d to the f, Schwede, Pozzo, sawgrass727, Julie Gulden, rapala, bloomer 101, 3goldens, wmc418, PBen, Flint, kefauver, citizenx, terrypinder, Brooke In Seattle, Inland, Fury, The Raven, Ekaterin, Land of Enchantment, begone, Sanuk, Captain Sham, vigilant meerkat, cybersaur, MeMeMeMeMe, BlueInARedState, martyc35, greenearth, bubbanomics, Dauphin, plf515, joshc123, weidheimer, frankzappatista, revgerry, Quicklund, Nulwee, lams712, lightfoot, dotsright, dmh44, WeBetterWinThisTime, Inventor, Jimdotz, yank2351, joedemocrat, Unbozo, Uwaine, mbh1023, Kentucky Kid, ubertar, jnhobbs, Jack the R, yella dawg, Brahman Colorado, MKinTN, skymutt, SilverOz, elwior, brooklynbadboy, lineatus, LarsThorwald, pamelabrown, Haplogroup V, pademocrat, joy sinha, Zikar, Diogenes2008, 1BQ, DemocraticOz, be the change you seek, RandomActsOfReason, notrouble, kat68, Setrak, lookit, zizi, MKSinSA, NWTerriD, johngoes, soms, The BBQ Chicken Madness, sherijr, Nonconformist, Livvy5, carmenjones, NThenUDie, ZAP210, seesmithrun, jsfox, marabout40, KroneckerD, TFinSF, bullyness, amk for obama, stunzeed, ATFILLINOIS, Calidad, elginblt, ItsSimpleSimon, Mariken, ThisIsMyTime, Cure7802, Floande, bosshogg, soaglow, Actbriniel, indubitably, Amayi, Mistral Wind, Wolf10, RadicalRoadRat, IL JimP, GrandmaMJ, alienufo, cherish0708, jeffrey789, blackwaterdog, Wonk Hussein, KingofSpades, moonpal, Nashville fan, James Robinson, TheLizardKing, docrocktex, delmardougster

    "When the going gets tough, the tough get 'too big to fail'."

    by New Deal democrat on Fri Jan 29, 2010 at 05:39:48 AM PST

  •  btw... tipped and wrecked (1+ / 0-)
    Recommended by:
    WeBetterWinThisTime
  •  It was my understanding there would be no math. (30+ / 0-)

    "Progress has never been a bargain; you have to pay for it." -- Clarence Darrow "Change takes time. It's a marathon, not a sprint." -- Widely attributed

    by LarsThorwald on Fri Jan 29, 2010 at 05:46:57 AM PST

  •  Yeah, but (12+ / 0-)

    if sales don't follow inventory, that build-up will act as a drag later in the year.

    Big tent leads to big fail.

    by Paleo on Fri Jan 29, 2010 at 05:49:17 AM PST

  •  it's a good number.. (6+ / 0-)

    It should indicate job growth.

    What could possibly go wrong?

    Prison rape is not funny.

    by social democrat on Fri Jan 29, 2010 at 05:52:15 AM PST

  •  Don't we need to rebuild industrial capacity.... (13+ / 0-)

    ...to recreate the conditions that existed in 83?

    Not necessarily disagreeing with you here, just wondering how we can compare the present to 83 when our economy seems so different now.

    And, I guess by extension, I'm also wondering what Obama can do to put us back on an 83 footing.

    Bush Bites is a subsidiary of Bush Bites Inc., a registered corporate personhood.

    by Bush Bites on Fri Jan 29, 2010 at 05:57:10 AM PST

  •  "Inventory restocking" (7+ / 0-)

    Compared to the past, industries have better inventory controls, and that mere fact of "stocking" shows a prediction of future sales and actual production by actual people, in reverse of companies slashing production and employees to the bone in the pant-soiling panic of fall 08.  So we don't have five point seven next quarter.  Four would be plenty.

    Subsidies without cost controls, regulatory reform means that citizens get a little more awful insurance at a huge cost to taxpayers. Like Part D but worse.

    by Inland on Fri Jan 29, 2010 at 05:59:40 AM PST

  •  just to follow up... (6+ / 0-)

    ...on your remark about unemployment:

    And noboby is talking about declining unemployment yet.  On that, the jury is very much out.

    This despite your sense that signficant job growth is likely soon.

    Do you feel unemployment is nevertheless going to remain high because labor force participation will rise along with job growth for a time? So that as we add new jobs, we will also add new workers from among those previously discouraged?

    Prison rape is not funny.

    by social democrat on Fri Jan 29, 2010 at 06:02:52 AM PST

    •  u6 ticked back up, last month (7+ / 0-)

      we'll see how well it's doing this month...

      The cold passion for truth hunts in no pack. -Robinson Jeffers

      by Laurence Lewis on Fri Jan 29, 2010 at 06:08:13 AM PST

      [ Parent ]

    •  Job growth, wage growth. (2+ / 0-)

      For me, the I will see the economy as recovered, or on its way when inflation adjusted wages are going up at the same time unemployment is going down.

      After all, we live in a society of people, not just an economy.

      GDP matters, but as long as it is driven in whole or in major part by FIRE sector companies or industries, it is a problematic measurement, and reflects little of what actual people are experiencing.

      And U6: That's me, my other half, my cousin, the vast majority of my generation (under 30). Part-time shit freelance work. No benefits. No security.

      It is curious to see the periodical disuse and perishing of means and machinery, which were introduced with loud laudation a few years or centuries before. -RWE

      by Gravedugger on Fri Jan 29, 2010 at 08:00:44 AM PST

      [ Parent ]

  •  These numbers are Cooked (8+ / 0-)

    As in Cooked the books

    they are not real

  •  krugman's exact words: (18+ / 0-)

    Here’s what’s coming in economic news: The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.

    But if those calls are heeded, we’ll be repeating the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over, that it was time for the economy to throw away its crutches. Spending was cut back, monetary policy was tightened — and the economy promptly plunged back into the depths....

    So the odds are that any good economic news you hear in the near future will be a blip, not an indication that we’re on our way to sustained recovery. But will policy makers misinterpret the news and repeat the mistakes of 1937? Actually, they already are.

    the whole thing is worth reading.

    The cold passion for truth hunts in no pack. -Robinson Jeffers

    by Laurence Lewis on Fri Jan 29, 2010 at 06:06:30 AM PST

    •  I understand and agree with Krugman's agenda (15+ / 0-)

      But he is losing some of his credibility with his blippiness.

      We aren't in 1980.  The Fed isn't increasing interest rates by 10%.  

      If we have a double-dip, it will be because of all the cash that went into Oil speculation, driving its price back up near/over $100 again.

      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Fri Jan 29, 2010 at 06:19:47 AM PST

      [ Parent ]

      •  Can you speak to the example of 1937 that he (7+ / 0-)

        gives in the excerpt?

        •  If the Fed hikes rates, (15+ / 0-)

          and Obama goes all fiscal rectalist (which he might), we are going to have Great Recession, Act II.

          We need to keep stimulating jobs and the middle class, until the underlying problems are firmly on the path to being worked out.  So I agree with Krugman about that.

          "When the going gets tough, the tough get 'too big to fail'."

          by New Deal democrat on Fri Jan 29, 2010 at 06:26:41 AM PST

          [ Parent ]

          •  I have a theory - that's unrelated but connnected (3+ / 0-)

            What do you think the effect of job insecurity and wage stagnation/deflation has been having over the last few decades to growth in the U.S. I think this is more than just have a job or not have a job, but the destabilization of the American middle class, which is a longer term trend than just the Great Recession. My question if nothing is done about those issues, is it possible that we will continue to see a weak economy for a decade  due to the impact of these issues?

          •  NDD (3+ / 0-)

            these discussions about '37 make two mistakes:

            1.  They confuse fiscal stimulus with the stimulus package.  What is really relevent is the overall impact of the government on the economy.  The best measure of that is the defecit to gdp ratio.  While the safety net is not as big as it is in Europe, it is still far more significant than in 1937.  It is worth remembering that the deficit to gdp ratio was already headed far higher than it ever was under the New Deal before Bush left office.

            I would still do another jobs program but the comparison to '37 misses the mark.

            In 1938 (see table below) FDR balanced the budget (in part because the new social security program collected more taxes than revenue but that is another story).  That is not going to be repeated this time.  The most recent CBO projections show a deficit to gdp ration still well over 8% this year and spending isn't projected to decline in the out years in any way approaching the way they did in 37.  From 1936 to 1938 government spending declined by about 25%.  Anyone want to bet on that happening this time?

            1.  37 wasn't just about balancing the budget.  At the same time monetary growth slowed: which the FED shows no signs of repeating this time.

            Photobucket

            The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

            by fladem on Fri Jan 29, 2010 at 07:01:50 AM PST

            [ Parent ]

          •  it's not even going to be the rate hike (1+ / 0-)
            Recommended by:
            PsychoSavannah

            it's not even going to be the rate hike, it's going to be the way he backs off the "quantitative easing" that is scheduled to take place in spring of this year. What is the "quantitative easing"? it's the fed's first of it's kind program buying up the mortgage backed securities scheduled to end on march 31.

            Ironically while verifying this information, i found this link:
            http://seekingalpha.com/...

            so ignore the rates, they are going to be at 0 until after the congressional elections (unless the economy takes off), and pay attention to what the fed is buying.

      •  he'll lose credibility (5+ / 0-)
        Recommended by:
        Brooke In Seattle, Nulwee, bigchin, 0wn, Jyrinx

        when he stops being proven right...

        The cold passion for truth hunts in no pack. -Robinson Jeffers

        by Laurence Lewis on Fri Jan 29, 2010 at 06:26:37 AM PST

        [ Parent ]

      •  Oil speculation (2+ / 0-)
        Recommended by:
        Brooke In Seattle, Dauphin

        ...isn't the only possible bubble for Wall Street to chase.

        There is some danger that unexamined business plans will lead to a dot-com like bubble in small business investment if the broad small business capital gains tax holiday is passed.

        I am not assured that Wall Street market makers will start addressing the prospects for growth in Main Street firms.  There is a continued bias against labor that diminished consumer purchasing power and limits growth of demand.

        And Krugman says nothing about interest rates--just premature withdrawal of government expenditures and Fed monetary activity that stimulate the economy.  In fact a modest gain in interest rates would be helpful for pricing money again.

        50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

        by TarheelDem on Fri Jan 29, 2010 at 06:34:37 AM PST

        [ Parent ]

        •  hasn't there already been a new bubble (1+ / 0-)
          Recommended by:
          farbuska

          all year since the March lows basically? Both in equities and commodities...I mean oil is up 100% from the lows in the high 30s, and the stock market posted a historic rally...based on nothing. I don't think these rallies are sustainable, and it looks very much like a bubble to me. The economic numbers cannot possibly support these rallies.

          "People place their hand on the Bible and swear to uphold the Constitution. They don't put their hand on the Constitution and swear to uphold the Bible." --J.R.

          by michael1104 on Fri Jan 29, 2010 at 06:42:56 AM PST

          [ Parent ]

          •  We'll know only when (0+ / 0-)

            ...it pops.

            And the "historic rally" wasn't based on nothing.  It was based on the fact that the paper economy didn't continue to be in free-fall.  You have to look at the sectors that the rally occurred in.

            These parts might not be sustainable: real estate, health care, and financial services.  Hopefully more of the real economy will start to rally before those sectors take a bath.

            50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

            by TarheelDem on Fri Jan 29, 2010 at 06:56:29 AM PST

            [ Parent ]

      •  We'll find out whether what we're seeing ... (7+ / 0-)

        ...is "blipiness" or not over the next couple of months. Personally, I'd be happy if he's wrong. Sustained GDP above the job-creation figure you cite would give us all some reason to relax and unite around a focus on creating more jobs. Because the "factions" among progressives all agree that just getting that job creation above the zero line is not nearly enough.  

        Don't tell me what you believe. Tell me what you do and I will tell you what you believe.

        by Meteor Blades on Fri Jan 29, 2010 at 06:42:33 AM PST

        [ Parent ]

  •  But where's the demand? Consumers tapped out. (14+ / 0-)
    American consumers are still maxed out on debt, scrambling to make mortgage payments and cutting back on discretionary expenses. Where is the consumer demand required to drive a true robust recovery and lead to job growth?

    <crickets>

    We're no where near the end of this decline. Lots of mortgages out there are still headed for default. The job market is still abysmal.

    FYI, last night my wife and I went out to a local restaurant. For our entire time there, we were the only customers in the restaurant.

    It's that bad.

  •  Two of the job shops that I use have been (20+ / 0-)

    working flat out for the last three months. One of them said yesterday that they were "busier than at any time since we bought the business." But here's the kicker, "and we're doing it with half the people."

    They are working extra hours, only their salaried staff are left, because they are gun-shy about expanding staff because of what happened last year. He also said they need to expand space, (they cut some of their workspace during the bad months), but he isn't going to do that either.

    The other job shop was the same way. Balls out not adding until the work consistency exceeds their fear level about things turning south again.

    So it's anecdotal and just two data points, but I think it suggests that there may be some pent up job need and expansion need that is there, but needs some more "confidence building" or whatever the appropriate economic term is for making decisions to add jobs and to add capacity.

    On the flip side, my company would be adding jobs if we could continue our venture funding. We will have to close down because we were unable to attract continuation funding even though we exceeded our performance goals. It's frustrating, and that gives you an idea of how the money is circulating as well - again only a single data point.

    Thanks for the fine diary. Please continue posting despite the flaming you'll take. Data is data. How people interpret it is going to be different, but hearing all viewpoints makes for a stronger community I think. Sometimes that seems forgotten around here.

    Tipped and recc'd.

    "If they can get you asking the wrong questions, they don't have to worry about answers." - Thomas Pynchon, "Gravity's Rainbow"

    by Uwaine on Fri Jan 29, 2010 at 06:10:02 AM PST

    •  There will be one other restraint on hiring (4+ / 0-)

      There's a window between maximum productivity and loss of new additional business where profitability is optimum.

      Business owners who do not see a solid, long-term uptick in demand may try to stay in that window as long as possible.

    •  Aaaaaah! The magic of (5+ / 0-)

      ... productivity! Twice the work with half the people!

      FDL = The Teabagger wing of the Democratic Party

      by indubitably on Fri Jan 29, 2010 at 06:53:47 AM PST

      [ Parent ]

      •  Half the people working a lot of extra hours (4+ / 0-)

        though. That's not easily sustainable over the long term. But Rayne is succinctly correct, they won't hire until they feel they are going to lose business - and it will probably start by using temps as well.

        "If they can get you asking the wrong questions, they don't have to worry about answers." - Thomas Pynchon, "Gravity's Rainbow"

        by Uwaine on Fri Jan 29, 2010 at 07:47:02 AM PST

        [ Parent ]

        •  Oh, I know, it absolutely isn't sustainable. (4+ / 0-)

          I've been watching this go on for years now, first really noticing it around 2000-2001-or thereabouts, and I've even modeled my own work behavior on knowing this is how these "new fashioned" business managers keep up their profits. I can't afford to lose my job. So I buck up and do it.

          Meanwhile, I'm sadly watching someone I work with under increasing scrutiny and danger of being fired because he hasn't yet caught on that our overlor ... er, "boss," is working under this model.

          It absolutely isn't sustainable. Fortunately, I love what I do, but I am completely wiped out at the end of the day and demolished by Friday.

          FDL = The Teabagger wing of the Democratic Party

          by indubitably on Fri Jan 29, 2010 at 07:57:04 AM PST

          [ Parent ]

          •  It's Not Sustainable at a Worker Level (5+ / 0-)

            But unfortunately, all your overlord has to do is fire those who do not work at that level, for whatever reasons, and replace him/her with someone who is so hungry that they will gladly do it for the same or (ideally, if you're The Man) less money.

            Think of it as offshoring without actually having to go offshore.

            This is the concern I have with all these discussions that assume that GDP increase/inventory replacement, etc. "virtually guarantee" (to use the words of the diarist) jobs.  They do not appear to take into account whatsoever for the psychology that drives both workers and business owners, a psychology of work and the workplace that has fundamentally changed over the past 30 years.  A psychology that affects perceptions of everything from what a reasonable work week/level is to what a reasonable profit margin is.

            All distorted by the fact that we are coming out of a Great Recession even giving 100% credence to the positive spin put on the economic indicators.

            It's a real irony, considering that economics is no more than trying to understand the psychology of money, that most devotees completely ignore the psychology of work when making their claims.

            For me, I'm happy to see any positive number but --and folks can call me a doomster I don't give a fuck -- until I see sustained evidence on the ground that the situation of the millions of folks who have been jettisoned by this economy have improved for more than the time period it takes to hold down a benefit-less temp job at 1/2 the pay it deserves, I shall remain quite concerned.

            Because the GDP still isn't putting food on people's tables.  Just extra money in folks' spare pockets (including my own, since I like most here are of the economic class to have had some spare money in the markets.)

            If you don't stand for something, you will go for anything. Visit Maat's Feather

            by shanikka on Fri Jan 29, 2010 at 08:07:25 AM PST

            [ Parent ]

            •  You should diary this. (2+ / 0-)
              Recommended by:
              PsychoSavannah, indubitably

              This and what you said yesterday about minority unemployment in urban areas.

              People will listen to you and rec your diary.

              My middle name is Cassandra. Nobody listens to me.

              "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

              by Brooke In Seattle on Fri Jan 29, 2010 at 08:15:12 AM PST

              [ Parent ]

            •  The sticking point for me (1+ / 0-)
              Recommended by:
              Uwaine

              ... is that I know the economy has changed, and I know (at least at a gut level) we're returning to work patterns more similar to mid-20th C., and I know it has to be that way, in the sense that the 1990's were a blip and, in and of itself, unsustainable.

              Yet, this management or business model is a throwback not to those times, but to much, much earlier times.

              At my job, because I work at a small college, everyone, even the president (who is everyone's overlord), suffers from it, so resentment is much less than it would be otherwise. We're all working our asses off.

              But at too many jobs, only the workers suffer, while the CEOs and stockholders benefit - enormously.

              There is a middle ground which is the right ground, imo, where workers' rights are retained and jobs can be intense, but enormously satisfying, and people don't spend their evenings and weekends only trying to recover.

              But we are so not there. And those who haven't caught on to this new model are suffering the consequences.

              FDL = The Teabagger wing of the Democratic Party

              by indubitably on Fri Jan 29, 2010 at 08:16:14 AM PST

              [ Parent ]

    •  very typical behavior (7+ / 0-)

      for this point in a recovery. the point is that can't be sustained forever, just like retailers can't worry forever about the inventory they're holding. eventually they will worry more about the sales they lose because of a lack of inventory.

      this whole debate of these reports is very strange to me. we have building data that supports the idea that crisis is passing. at this point, of course the data will paint a mixed picture, that's what inflection points are all about. and yet there are all sorts of people who are offended at the idea that measures of economic activity could begin to show signs of improvement before THEY themselves can feel it. it's a lot like global warming deniers: if my weather is cold today, any scientist telling me its getting dangerously warm over 10 years is a crackpot not worth paying attention to.

      the other thing that puzzles me is the constant increase of expectations. some postive news comes out, and the doomsayers jump in unison to say its not good enough, and we need to do X to make it so. after what we've been through, with an economy sustained by overconsumption fueled by debt, wouldn't a moderate recovery be better for us in the long run? one where people felt confident enough to go about their lives again but still chastened by lessons learned? living within their means, saving appropriately but not in a panic, building that personal safety net we didn't have in place when this whole thing blew up in the first place.

      doing that will take some time. over that time, the data may show slow or moderate growth. but by the end of that process we'll have healthier family balance sheets more able to weather tough times. that's not a bad thing.

      •  I agree, you'd think people would at least (0+ / 0-)

        acknowledge that the data is trending in our favor a little bit LOL. I also agree wholeheartedly with your last point. I think this downturn caused many folks to significantly change how they "lived" their lives. Saving, reining in spending, etc. are an "old but new" paradigm that will hopefully last through a few economic cycles ('cause I think it is a healthier approach long term macroeconomically - is that a word).

        "If they can get you asking the wrong questions, they don't have to worry about answers." - Thomas Pynchon, "Gravity's Rainbow"

        by Uwaine on Fri Jan 29, 2010 at 07:38:32 AM PST

        [ Parent ]

    •  IBM recorded record profits in 2009 (2+ / 0-)
      Recommended by:
      Brooke In Seattle, Uwaine

      but cut untold thousands in 2009.  There's still no internal discussion about adding jobs in the U.S.  
      More likely they will go overseas.  

      •  Yeah I know. I think that is a significant issue (2+ / 0-)

        and is probably why creating jobs here is a lot more difficult than it has been in the past. Focusing on small business growth and infrastructure projects are a probably the best approach especially short term, but finding a way to have large corporations keep jobs here has got to be explored.

        There's a reason Secretary Chu is throwing tons of money around the "Green Energy" arena. Actually there are many reasons. But one of them is that it is a "new" industry, so job creation will be here in the States at least initially. The problem is, every other major nation wants the same industry. Here's hoping he spreads the money wisely.

        "If they can get you asking the wrong questions, they don't have to worry about answers." - Thomas Pynchon, "Gravity's Rainbow"

        by Uwaine on Fri Jan 29, 2010 at 07:43:47 AM PST

        [ Parent ]

      •  Obama is to announce today (2+ / 0-)
        Recommended by:
        JuliaAnn, Uwaine

        a tax credit of $5,000 for employers who hire a new employee.

        Which makes me roll my eyes.

        How many of you employers out there are going to line up to hire people because of that?

        How much are you going to pay them in salary? Ten dollars an hour? Benefits?

        "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

        by Brooke In Seattle on Fri Jan 29, 2010 at 08:17:20 AM PST

        [ Parent ]

  •  new deal (3+ / 0-)
    Recommended by:
    Turkana, Nulwee, cybrestrike

    what do you have to say about this?  That doesn't look quite as good as the topline numbers. It looks like we are just decreasing more slowly.

    The change in real private inventories added 3.39 percentage points to the fourth-quarter change in real GDP after adding 0.69 percentage point to the third-quarter change. Private businesses decreased inventories $33.5 billion in the fourth quarter, following decreases of $139.2 billion in the third quarter and $160.2 billion in the second.

  •  I'll tell all this to that Chemical Engineer (15+ / 0-)

    I have digging holes in the frozen ground for $10 an hour.

    Less snarky these are good numbers, but we have a long way to go even if #s were great again. The middle class has shrunk for 30 years and until it returns we're in deep doo doo.

    "Don't fall or we both go" Derek Hersey

    by ban nock on Fri Jan 29, 2010 at 06:13:39 AM PST

    •  that stings (1+ / 0-)
      Recommended by:
      James Robinson
      sitting through all those engineering classes just to dig holes.  

      I came out of engineering school during the last bad recession. Put my expensive Ivy League degree to work as a real estate appraiser, a job you could do right out of highschool. But at least I wasn't digging holes in the winter.  

  •  And if this keeps up (6+ / 0-)

    then the idea that the Democrats will lose lots of seats in the House and Senate vanishes.  

    We all differ in ways that matter. But we're all the same in the ways that matter most.

    by plf515 on Fri Jan 29, 2010 at 06:17:12 AM PST

  •  What this GDP should spurt is a jobs bill (8+ / 0-)

    that includes tax credits for hiring.

    Reason what that is important is that people just need a nudge on the fence to start hiring workers.

    Also, the jobs bill absolutely needs a portion that will give loans to community banks to small businesses.

    Obama 1/10: "We don't quit. I don't quit."

    by Drdemocrat on Fri Jan 29, 2010 at 06:18:38 AM PST

  •  GDP has become if not entirely meaningless... (7+ / 0-)

    ...at this point, but mostly useless. Don't you see the disconnect? The patient isn't dying because of malaria fever, he's been poisoned. So checking his temperature isn't terribly useful.

    Atrios has been beating this drum for years now, but the fact remains that the foreclosure crisis isn't over, and until that poison is pout of our system, you will not see any general improvement in the patient's health.

    The HAMP program has been a resounding failure and worse, it's been predatory. My bet is that it will be accounted as this administration biggest failure, on a par with Gorbachev's well-meaning but ultimately catastrophic perestroika.

    The ugly fact is that the US banking industry is failing.

    They’re holding loans on their books at much more than they’re really worth, and they can’t afford to take the write-downs which would accompany principal reductions of roughly the same magnitude as the decline in housing prices.

    This kind of head-in-the-sand behavior can only possibly work if housing prices suddenly rebound in the next couple of years, and that ain’t gonna happen because the inventory will be replenished by a constant stream of foreclosed properties.

    Look at this graph. The industry can no longer cope with the rate of foreclosures. Say they can only realistically process 100,000; meanwhile, from 07 to 09 the number of delinquent loans has gone from 1.3 to over 2.5 million.

    Both the Bush and the Obama administrations tried to put together programs to deal with the banks’ toxic residential real-estate assets. Neither went anywhere, and as a result the problem is just as bad now as it’s always been.

    As I said, the patient is being poisoned while you're checking his temperature.

    OVER HERE: AN AMERICAN EXPAT IN THE SOUTH OF FRANCE, is now available on Amazon US

    by Lupin on Fri Jan 29, 2010 at 06:21:12 AM PST

    •  Far from it (5+ / 0-)
      Recommended by:
      Aexia, Odysseus, Pozzo, Seeds, lookit

      foreclosures are up because houses were too expensive, and people didn't earn enough to afford them.

      The direct result is housing prices are sharply lower.

      GDP is the single most relevant index to describe economic output of a nation.  We could correct it to eliminate military items, and factor in imports differently, but for all practical purposes, it is the best metric available.

      •  Keep Repeating the Convenient Myth (5+ / 0-)

        That most people are being foreclosed upon because they bought "too much house."  

        It might become true someday.  Right now, it's no more true than it was when the predators first put the myth into the marketplace and saw it eaten up hook line and sinker by those who have no trouble believing that "those irresponsible people" are solely to blame.

        The reality is that now, the majority of the so-called "bought over their head/can't afford homeowners" having already either been foreclosed, jinglemailed or short-saled out of existence in most markets, what you are seeing now are the foreclosures directly tied to a LOSS of income.  Whether through unemployment, salary reductions, etc.

        Even with housing prices sharply lower, the thing that is driving them lower is foreclosure.  Foreclosure impacts not just those who lose their homes, but the entirety of neighborhoods.  So, what little household wealth remained in equity even for those who were hanging on is being wiped out, systematically, in all but the wealthiest housing markets (which continue to see price increases, go figure.)  

        Yet even though real estate agents are now busy as heck, all of them at least here in the Bay Area are reporting that unless you are a cash investor, or are one of the few buyers that can take advantage of the perfect storm that is the homebuyer tax credit and have a high enough credit score and disposible income to pay a traditional downpayment, sales aren't closing.

        Even FHA sales, which have the lowest requirements and are focused on the least expensive homes, aren't closing.  

        If you don't stand for something, you will go for anything. Visit Maat's Feather

        by shanikka on Fri Jan 29, 2010 at 08:19:40 AM PST

        [ Parent ]

        •  Can you say the sharks are still hungry? (2+ / 0-)
          Recommended by:
          Lupin, JuliaAnn

          Yet even though real estate agents are now busy as heck, all of them at least here in the Bay Area are reporting that unless you are a cash investor, or are one of the few buyers that can take advantage of the perfect storm that is the homebuyer tax credit and have a high enough credit score and disposible income to pay a traditional downpayment, sales aren't closing.

          For those "investors" (read vultures) making hay on the backs of the misfortune of others, yeah, happy fucking days are here again.

          The lie is being recycled. It's the working poor that made those loans doncha know. Shame on them. Yeah, they caused the housing crisis. I'll be looking forward to see how they'll spin it when the commercial market folds up like a cheap suit.

          "God bless the child that's got his own" in this hellish country.

        •  This is demonstably false (0+ / 0-)

          The majority?

          If that were so, then why are there more homes underwater than there are homes that have already been foreclosed?

          You made a claim, now back it up.

          •  Easy (1+ / 0-)
            Recommended by:
            Lupin

            They are underwater because those REO's in the market which are being sold to investors drive the aggregate value down each and every time they are resold below the levels of debt that neighboring folks already had on their houses - whether or not that debt was affordable to them at the time it was incurred.

            Do you seriously not understand that developing an upside down/underwater position is a function of neighboring property values which, if they tank, pull yours right down with them?

            There are neighborhoods in California, such as my own, that have seen 50% depreciation over the peak pricing in early 2008.  A person could have been completely responsible with their debt yet now readily owe far more on their home than it is worth.

            If you don't stand for something, you will go for anything. Visit Maat's Feather

            by shanikka on Fri Jan 29, 2010 at 09:45:28 AM PST

            [ Parent ]

            •  I understand (0+ / 0-)

              Hyperbole when I see it, and claims that are made that can't be backed up with facts.

              So people use rhetorical answers and bullshit claims; then they go on the offensive claiming the other person is blind, just doesn't understand, or is not a progressive/conservative/true Christian (depending upon the website.)

              The fact is, not everybody in the US has a mortgage on their homes, and not everybody has taken out a mortgage in the last few years.  For many people, their real threat isn't foreclosure, which isn't going to happen to more than 90% of them IN THE WORST CASE SCENARIO but the fact that they've lost so much potential equity that they hoped would be used for retirement or investment capital.

              •  No You Don't (1+ / 0-)
                Recommended by:
                Lupin

                You just want to make your own hyperbolic claims and demand that someone else do the work to disprove them.  I don't have time to waste on your pro-market fantasies - I help people who are suffering for a living.

                For example, nobody said that "everybody in the US had a mortgage on their homes."  Your figure about 90% foreclosure has no foundation in most of the worst-hit markets; existing data already proves it wrong (Dataquick and other similar resources can confirm that for you.)

                If you don't stand for something, you will go for anything. Visit Maat's Feather

                by shanikka on Fri Jan 29, 2010 at 10:15:49 AM PST

                [ Parent ]

                •  Here's the deal (0+ / 0-)

                  You have your facts, and refuse to listen to anyone else.

                  That's okay with me, I've learned that the more shrill generally the more resistant to reality a person is.

                  In a nation of about 100 million families about 2 or 3 million WORST CASE will be foreclosed.  We also have more homes than we actually need in this country, a direct result of the boom.  So many people purchased second or third homes, and so many people purchased homes as investments, that it forced housing prices way past where they should have been.

                  This is reality.

                  I do wish you'd keep your word and not waste any more time on me, because I'm going away for the weekend in a few minutes and will not reply.  Not as if you'd be saying anything valuable, you'd just be proving my point.

                  •  A Couple Points (1+ / 0-)
                    Recommended by:
                    Lupin

                    There have been more than 500,000 trustee's deeds recorded in California ALONE since the crisis hit.  Not notices of default.  Not notices of trustee's sale.  Deeds recorded AFTER the property has in fact been lost.  Nearly 86,000 notices of default (the first step in our process here) were recorded from October - December, 2009, with 57,000 trustees' deeds in that same quarter.

                    Prior wisdom (that most homes which go into default do not foreclose) is simply not lining up with reality.  But again, spending some money on Dataquick or a comparably reputable real estate data aggregator might help convince you where I obviously cannot (and I have my theories about why I cannot.)

                    Second, your original point was not about this and I feel tha you are dancing all over the place rather than admit that you were wrong about your original point. Your original contention was that the folks being foreclosed were because they bought too much house, i.e. houses that were too expensive for them.  When I challenged that (because all data which you can find just as easily as I show it's a market-based, right-wing MYTH), you then contended that somehow the high ratio of folks underwater was evidence to support your claim.  I then pointed out that being underwater is a function of depreciating values linked to neighborhood trends (which are driven downward, on a neighborhood basis, by foreclosure activity) and has nothing to do with whether or not one bought "too much house."

                    Now you have changed claims again, arguing both that previously high real estate values stemmed from second- and-third home investment purchases.  Of course, the data doesn't support that claim EITHER, but obviously you are going to keep sticking and moving rather than actually looking all this up yourself.  Yet because you insist on the last word, you want ME to demur to your false arguments.

                    Not even.  I've been dealing with issues relating to foreclosure fraud for more than a decade, in housing nearly 25 years.  On the ground.  You? Looking at your history of comments as it relates to housing matters, you have jack shit background in this area.  (It's a little more complicated than birds and cars, the subject you seem to know most about.)  You're simply talking out of your ass, because it's easier for you to believe market myths than the truth.

                    So have a nice weekend.

                    If you don't stand for something, you will go for anything. Visit Maat's Feather

                    by shanikka on Fri Jan 29, 2010 at 02:02:52 PM PST

                    [ Parent ]

      •  It might be the "best metric"... (2+ / 0-)
        Recommended by:
        JuliaAnn, Annalize5

        ...to measure industrial output...

        The problem our military output contributes nothing to our wealth (it is a destroyer of wealth) and IMHO the % represented by the financial sector is smoke in the air, Casino-economy.

        So the GDP discussed here is actually meaningless.

        OVER HERE: AN AMERICAN EXPAT IN THE SOUTH OF FRANCE, is now available on Amazon US

        by Lupin on Fri Jan 29, 2010 at 08:55:54 AM PST

        [ Parent ]

    •  Thank You For this Post (3+ / 0-)
      Recommended by:
      Lupin, Brooke In Seattle, Annalize5

      Nobody has been looking at that aspect of the economy (the shuck-and-jive that has been servicers and lenders insisting that they are modifying mortgages when they are merely once again setting them up for failure) for some time except the advocates for homeowners taken advantage of.  It's too inconvenient to the good news crowd to think about the possibility that the volcanic eruption hasn't subsided, it's merely traveling in a different direction underground (having shifted from a bad stock market and bad GDP to the destruction individual household income and assets) where we can't see it.

      Or won't see it.  I never can tell.

      If you don't stand for something, you will go for anything. Visit Maat's Feather

      by shanikka on Fri Jan 29, 2010 at 08:14:15 AM PST

      [ Parent ]

      •  Um...I think it may be because... (2+ / 0-)
        Recommended by:
        Lupin, shanikka

        It's too inconvenient to the good news crowd to think about the possibility that the volcanic eruption hasn't subsided, it's merely traveling in a different direction underground (having shifted from a bad stock market and bad GDP to the destruction individual household income and assets) where we can't see it.

        few have had to work for minimum wage and raise children on that paltry sum.

        I read lots of things that make me go...huh(?) here.

        Could it possibly be the class stuggle up close and personal here at Daily Kos? Jest thinkin'.

  •  Jobs are back! (6+ / 0-)

    Unfortunately, they're all overseas, having been offshored for decades.

    •  On the other hand, (2+ / 0-)
      Recommended by:
      fladem, be the change you seek

      as per Newsweek, the rate of offshoring from Europe to China has been cut in half in a single year. We might see the end of the offshoring era and the return of several competing production chains. Which is sensible. Relying on one means any rise in transportation costs or any political instability shoots the global economy to hell.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Fri Jan 29, 2010 at 06:25:55 AM PST

      [ Parent ]

    •  Where ?!?! (1+ / 0-)
      Recommended by:
      Brooke In Seattle

      GDP is not a measuring tool for employment.  Even if it were positive 10% or 20% that doesn't mean more jobs are being lost.    

      "To you I'm an atheist; to God, I'm the Loyal Opposition." - Woody Allen

      by soros on Fri Jan 29, 2010 at 07:08:51 AM PST

      [ Parent ]

      •  True (1+ / 0-)
        Recommended by:
        Brian B

        When GM emerged from bankruptcy it invested $100 million to tool one of their Canadian plants for production of one of their expected big sellers in Cash for Clunkers and beyond. According to GM 3 of their "hottest" selling vehicles may require them to open up some plants for work. Those 3 vehicles are produced 3 shifts a day, 7 days a week, at the Canadian plant and two plants in Mexico.

        So while the sales of those vehicles contribute to GDP none of the benefits of those sales resulted in employment to workers or income tax revenue to the states or federal government - at least on the production side.

  •  VVVVV vooom (0+ / 0-)

    here comes the V!

  •  elevator going down (2+ / 0-)
    Recommended by:
    rick, Brooke In Seattle

    link

    Wages and benefits paid to U.S. workers posted a modest gain in the fourth quarter, ending a year in which recession-battered workers saw their compensation rise by the smallest amount on records going back more than a quarter-century.

  •  Obviously you're just an economic... (7+ / 0-)

    hopemonger.

    ...seriously though, nice diary.

    "How poor are they that have not patience! What wound did ever heal but by degrees?"

    by Cure7802 on Fri Jan 29, 2010 at 06:31:01 AM PST

  •  remember the foreclosure crisis ? (5+ / 0-)

    Yeah, well it's still headed for a cliff.

    5% of that 5.7% was GS bonuses paid out by money from the treasury.

    Unemployment is over the cliff.  Everybody seems to forget that the jobs aren't coming back, AND unemployment is still getting worse.

    Somebody needs to tell the administration that we're still in serious trouble.

    This glitch of an "improvement" doesn't mean sh*t.

    Have a nice weekend :-)

    big badda boom : GRB 080913

    by squarewheel on Fri Jan 29, 2010 at 06:31:23 AM PST

  •  Kool aid tastes good... (5+ / 0-)

    we've lost tens of thousands of jobs that won't be coming back. A service industry economy cannot support families. The basic thrust of the economy has not changed, but grown worse against the interests of the working class. I won't celebrate until we pressure the government, and a massive jobs program in the public sector is created to put millions back to work.

    "Revolutionary Road" was a brilliant film.

    by scorpiorising on Fri Jan 29, 2010 at 06:34:00 AM PST

    •  Service industry (5+ / 0-)
      Recommended by:
      Aexia, Seeds, Dauphin, IL JimP, TheLizardKing

      Everything is a service industry.

      The people on our assembly lines do not produce any actual products, they simply take raw materials and manipulate them into becoming finished goods.  They are providing a service, they aren't producing any actual goods on their own.

      Doctors are a service.  So are lawyers, nurses, engineers, educators, technicians, chefs, mechanics...

      A guy digging a ditch isn't manufacturing anything except a hole.  Put a water pipe through it, and you've dramatically improved someone's life.  That person can become more efficient and produce more with the same resources.

      •  You know exactly what I am talking about... (1+ / 0-)
        Recommended by:
        Annalize5

        the service industry is low wage, low benefits work, and it has taken over our economy. When you buy your hamburgers, fries and a coke, when you go to a convenience store, and shop in a small business, usually, it is low wage, low to non-existent benefits. And those jobs are only the tip of the iceberg.

        "Revolutionary Road" was a brilliant film.

        by scorpiorising on Fri Jan 29, 2010 at 08:26:02 AM PST

        [ Parent ]

        •  It must be fun to argue with people (1+ / 0-)
          Recommended by:
          Nulwee

          when you get to make up your own facts.

          scorpiorising sez:

          the service industry is low wage, low benefits work

          Reference for Business has a slightly different view:

           Table 1
          Main Groups of Industries in the Services Division

             * Some agricultural services (including landscaping and horticulture)
             * Hotels and other places of lodging
             * Personal services (including dry cleaning, tax preparation, and hair cutting)
             * Business services (including temporary agencies and business software developers)
             * Automotive services
             * Miscellaneous repairs
             * Motion pictures
             * Amusements and recreation
             * Healthcare
             * Legal services
             * Private education
             * Social services
             * Museums, zoos, and botanical gardens
             * Membership organizations (including houses of worship and clubs)
             * Engineering and management services (including consulting)
             * Other miscellaneous services

          As a worker in the "service industry" who has provided steady income and pretty good health, vision, and dental insurance to my family for nearly 30 years, including paying for my two sons' college, I guess I beg to differ when you say that service industry jobs can't support a family.

          I suspect some of the attorneys I work with who bill out at $300 to $500 per hour would also disagree.

          Not all service industry jobs can do that, but it's incorrect for you to suggest that no service industry jobs can do it.

          •  A few of us would be lucky... (1+ / 0-)
            Recommended by:
            Cynic in seattle

            to get the higher end jobs of what you call the service industry. Yea, there is a broader definition. But the vast majority of folks, even in many of the jobs you mention, are low wage, little to non-existent benefits. Take private education: charter schools are all the rage, and are replacing public schools in New Orleans. They are quasi-private, non transparent, and non-union. Their wages are lower, and they employ teachers from out of town who make, maybe, a two year commitment.

            Amusements and recreation...high wage? Come on. Not sure what you are referring to there. Glad though you think our economy is in such good shape. What about your own community. How is it there? I've told you something of mine.

            "Revolutionary Road" was a brilliant film.

            by scorpiorising on Fri Jan 29, 2010 at 09:03:34 AM PST

            [ Parent ]

            •  Please show me (0+ / 0-)

              Where I wrote all of those jobs are "high wage."

              I seem to recall writing this:

              Not all service industry jobs can do that, but it's incorrect for you to suggest that no service industry jobs can do it.

              •  I didn't say all... (0+ / 0-)

                but I assumed you included service industry, high end wages. Look, if you are satisfied with the way the economy is shaping up, then have at it. If not, why not a discussion of what could/should be? Jobs for everyone, we need a massive WPA style job creation now to put people to work. This, of course, would require a reordering of our country's priorities. Most don't dare to go there, and the status quo is endless war and poverty is growing. Why?

                "Revolutionary Road" was a brilliant film.

                by scorpiorising on Fri Jan 29, 2010 at 09:56:29 AM PST

                [ Parent ]

          •  That was a polite response (0+ / 0-)

            and honorable.

            (-7.00, -6.21) Jobs, Liberty, Peace.

            by Nulwee on Fri Jan 29, 2010 at 09:42:48 AM PST

            [ Parent ]

  •  Even if much of it is inventory (0+ / 0-)

    people are getting paid to build those inventory items.

    And they will use that money to purchase goods and services which will help to draw down some of that inventory in the next quarter.

    Next quarter's (this quarter) report will show significantly lower growth, most likely 2-4%.  But it is still growth, much better than decline, and better than most of our major trading partners.

    •  A good prtion of that inventory is imports (1+ / 0-)
      Recommended by:
      Brian B

      Certainly not all. The big question is how much of that inventory was still standing after the holidays. We will see how much in the upcoming revisions. The Retail Sales report for December was at odds with the shopper traffic and other estimators in the same month. In particular spending on food was actually down and that is not a good sign and is at odds with the GDP report release. Perhaps the revisions to the December retail report will run in the positive direction.

      I expect PCE to come down a bit based on this and some other factors. GM was dumping Saturns and I guess the impact to GDP will depend on the accounting for them as to the effect on GDP. December existing and new home sales numbers may play into it.

      If revisions to GDP are anything like they have been of late the final number could come in around 3.7% - 4.0%. If the inventory numbers go up in the revisions while PCE drops GDP could stay closer to where it is. But then we may have a case of wishful thinking and a potentially serious issue if the consumer doesn't pick up the pace. Despite the upticks in Consumer Confidence and even with the uptick the Preset Situation numbers are still reflective of diminished near term spending despite the Future expectations numbers.

  •  we need over 3-4% growth to add jobs (1+ / 0-)
    Recommended by:
    Brooke In Seattle

    I don't really see this yet for the year 2010. Sure, an inventory blip in the first quarter, but growth for all of 2010? I am skeptical. Would be fantastic. Would nail Nov too.

  •  Of course there's a gloom and doom... (2+ / 0-)
    Recommended by:
    New Deal democrat, Dauphin

    diary on the rec list. It seems to rely on the argument that "Okun's Law" is no longer in effect, that things are different today. Well, whenever someone makes the argument that "things are different" - either during a boom or bust - that's when I question the quality of their argument.

    Just another socialist fuckstick homosinner!

    by Ian S on Fri Jan 29, 2010 at 06:41:58 AM PST

    •  Even worse, (2+ / 0-)
      Recommended by:
      fladem, indubitably

      it claims Okun's Law doesn't work because of fraud. Even if we hold that it has been changed, the first thing we need to do is look at social relations and look at what has changed. Fearmongering won't help that.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Fri Jan 29, 2010 at 06:53:41 AM PST

      [ Parent ]

      •  That diary is simply ignorant (4+ / 0-)
        Recommended by:
        Drew J Jones, Pozzo, Dauphin, indubitably

        it relies on a claim that GDP may be overstated by a whopping .2% to "prove" that Okun's Law is therefor false.  What the diary does is link to an article with a catchy title (actually another article written by that diarist), that then links to the actual source (so twice removed) that shows that the miscalculation in GDP might amount to at most .2%.  All that means is that you would at worst subtract .2% from GDP before using Okun's Law.  Not only is that diary ignorant on the facts, but its deception is willful and intentional by the diarist.

        •  Well, I've become used (1+ / 0-)
          Recommended by:
          indubitably

          to the fact that (i) bobswern never actually justifies the diary's title, (ii) links a lot, to sides both dubious and trustworthy, substantiated articles, and, often, unsubstantiated ones, to prove we're all going to fucking die and be used as Soylent Green.

          Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

          by Dauphin on Fri Jan 29, 2010 at 07:01:15 AM PST

          [ Parent ]

    •  Heres some things that are different (6+ / 0-)

      -Interest rates were slashed repeatedly during this time. They are at essentially 0% and no one is borrowing.

      -Tax rates were higher. This forces either redistribution to the government or redistribution within the company which means jobs or higher incomes across the board.

      In the 90's you had the creation of the tech industry or rapid expansion. Companies which didn't have IT departments needed them all of a sudden.

      In the 2000's you had the housing boom.

      Ignoring that things are different is ludicrous. Where do we go from here? We can't cut interest rates, current tax policy incentivizes short term profit-making, not investment, and green technology is a planet and long term cost saver not a short term growth industry. So the question is where does the growth come from, and yes, things are really fucking different today than they were.

      Graphs are pretty, but many times graphs are meaningless.

      •  Re (0+ / 0-)

        green technology is a planet and long term cost saver not a short term growth industry.

        Yes, this is something that's not well-understood. Let's say you replace a natural gas plant with windmills. OK, so, you had power before and you still have power now (maybe cleaner, less polluting power, but still power the same as what the natural gas plant produced). So, you're not really ahead of where you were before except for pollution and fuel costs down the line.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Fri Jan 29, 2010 at 09:27:19 AM PST

        [ Parent ]

    •  You might wanna check into who was ... (4+ / 0-)

      ...saying Okun's Law is broken just a few months ago.

      Don't tell me what you believe. Tell me what you do and I will tell you what you believe.

      by Meteor Blades on Fri Jan 29, 2010 at 07:03:54 AM PST

      [ Parent ]

      •  It might be. (1+ / 0-)
        Recommended by:
        indubitably

        But jumping from that to fraud is just idiotic.

        Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

        by Dauphin on Fri Jan 29, 2010 at 07:08:03 AM PST

        [ Parent ]

      •  There is evidence that ... (7+ / 0-)

        ... the tradeoff between unemployment and gdp has changed.

        The graphs I've used above are fair.  There is some evidence that it take more to hit job growth than it did before 1994 (hence the need to accomodate a 2.26% GDP growth rate that still had 0.3% loss of jobs YoY in 2002.

        There's a big difference between saying the equation has been changed from post WW2 re unemployment (which CR's and Delong's graphs seem to bear out) and saying it's a fraud or doesn't work at all.

        "When the going gets tough, the tough get 'too big to fail'."

        by New Deal democrat on Fri Jan 29, 2010 at 07:11:57 AM PST

        [ Parent ]

        •  As you know, I'm not arguing fraud at all... (6+ / 0-)

          ...I just think that the commenter I replied to is taking an unnuanced textbook stance regarding Okun's Law. As you can see from my own post today, I've credited your analysis on job growth and GDP. And, whatever our disputes, we still agree, I think, that more needs to be done by government than has been so far to boost job creation. The problem is that now the Party of No Way, No How, may have the clout to block any further action.

          Don't tell me what you believe. Tell me what you do and I will tell you what you believe.

          by Meteor Blades on Fri Jan 29, 2010 at 07:25:34 AM PST

          [ Parent ]

        •  Who exactly is saying.... (0+ / 0-)
          ...it is "fraud" or "it doesn't work at all?"

          "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

          by bobswern on Fri Jan 29, 2010 at 08:52:01 AM PST

          [ Parent ]

      •  I'd be skeptical there too... (0+ / 0-)

        This happens frequently in economics, possibly because it's hard if not impossible to do hard science experiments to prove or disprove hypotheses. You have to rely on empirical evidence from the past and, because there are plenty of factors that are not controlled, that invites the "things are different now" argument that we so frequently see from all sides in an effort to downplay empirically-derived laws that don't support a particular viewpoint.

        Just another socialist fuckstick homosinner!

        by Ian S on Fri Jan 29, 2010 at 09:07:19 AM PST

        [ Parent ]

    •  It didn't stay (0+ / 0-)

      on the reclist long and has now dissappeared.

      When Bobswern writes about corruption on Wall Street he is worth reading.  

      When he writes about general economics I shake my head...

      The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

      by fladem on Fri Jan 29, 2010 at 07:30:05 AM PST

      [ Parent ]

  •  Wow! More linear feet of graphs "proving"... (1+ / 0-)
    Recommended by:
    Annalize5

    ...that everything's great or will be.  Oh, happy day.

    Don't do vibrato. There'll be plenty of that naturally later when you're old and shaky. (Miles Davis, quoting his music instructor)

    by dov12348 on Fri Jan 29, 2010 at 06:45:51 AM PST

    •  No. It's a reasoned analysis (10+ / 0-)

      that provides a basis for expecting an improvement in the employment picture over the next 6 months. However, there are many ways that this recovery could be nipped in the bud by stupid politicians and poor choices made by the Fed and by bankers.

      look for my DK Greenroots diary series Wednesday evening. "It's the planet, stupid."

      by FishOutofWater on Fri Jan 29, 2010 at 07:00:03 AM PST

      [ Parent ]

      •  The missing link: (2+ / 0-)
        Recommended by:
        Annalize5, lightfoot

        The reader MUST ask himself: "Why the good projection?"  He/she MUST use reason and logic completely separate and apart from the charts.

        Charts are better than nothing -- sometimes.  But you cannot look at them alone.

        For example:  When unemployment compensation runs out, there will be massive new foreclosures leading to further tightening of credit and less spending, leading to less production and more layoffs, leading to even less spending, etc.

        And if the charts somehow contradicted this without explanation, I'd dump the charts in a New York minute.

        Don't do vibrato. There'll be plenty of that naturally later when you're old and shaky. (Miles Davis, quoting his music instructor)

        by dov12348 on Fri Jan 29, 2010 at 07:13:29 AM PST

        [ Parent ]

  •  Thanks NDD... (3+ / 0-)
    Recommended by:
    askew, New Deal democrat, shrike

    for your great analysis and making me feel better after reading the "pre-buttal" on the GDP report by BS...

    Obama - Change I still believe in

    by dvogel001 on Fri Jan 29, 2010 at 06:46:05 AM PST

  •  Wish I could be so enthusiastic, but (9+ / 0-)

    even if this is not just a blip and we see sustained GDP growth, it doesn't necessarily mean the perverse distribution of wealth which has poisoned our society is being fixed.

    Air America listeners, check this out

    by shpilk on Fri Jan 29, 2010 at 06:46:25 AM PST

  •  How does the growth of job relate to tax rates? (1+ / 0-)
    Recommended by:
    James Robinson

    Looking back over the years, the highest marginal tax rates were radically different prior to the 1980's. In the 1980's, there was the rapid expansion of the financial sector, the introductions of 0% financing, and the ballooning of credit. In the 90's there was the tech boom and a whole new sector requiring new jobs. In the 2000's there was the housing boom creating jobs while other sectors were bleeding.

    You've shown in the past there appears to be a correlation between "revised" growth and job growth, but how does that correlate to tax policy and slashing interest rates? Are we to ignore those as issues?

    Is there going to be a new sector of the economy that solves all of our problems?

    •  Right question. (5+ / 0-)

      The lowering of tax rates by Reaganomics, and injection of huge amounts of capital into speculation is what drove much of the offshoring of good American manufacturing jobs.

      This cannot easily be reversed, so there is no readily apparent 'new sector' to solve problems.

      Wealth distribution is so skewed now, there isn't enough capital to maintain a normal economy, only one that pampers to the wealthy and that results in a  totally unsustainable model.

      Obama and Congress could change this, but they won't.

      They could tax some of that wealth, and use the proceeds from it to create a structure of a Federal loan program dedicated to the only "new sector" that makes sense today: what I call 'bottom up'  alternative energy, energy that is produced using alternative green sources right on location. Obama has made it quite clear in his SOTU speech, he does not believe in this type of alternative energy. He believes in the centralized networked systems which will continue to favor corporate profits and reinforce disparity of wealth.

      Air America listeners, check this out

      by shpilk on Fri Jan 29, 2010 at 07:10:52 AM PST

      [ Parent ]

      •  And THAT is the problem (5+ / 0-)

        Wealth distribution is so skewed now, there isn't enough capital to maintain a normal economy, only one that pampers to the wealthy and that results in a  totally unsustainable model.

        Obama and Congress could change this, but they won't.

        A problem which will not be fixed, or even lightly massaged.

        Riding on a pony Riding against the wind And in came brando And he told it like this

        by Wamsutta on Fri Jan 29, 2010 at 07:27:54 AM PST

        [ Parent ]

  •  Thank God. This is great news. Thank you. (1+ / 0-)
    Recommended by:
    Dauphin

    I'm not scared going into the Fall. We will keep our majority. Watch.

    Oh, I'm sorry. I didn't know it was okay for us to be "racially insensitive". Now, is that just for race or do we get to be hypocrites on gender identity too ?

    by WeBetterWinThisTime on Fri Jan 29, 2010 at 06:51:21 AM PST

  •  I'm wondering what kind of boost the US (1+ / 0-)
    Recommended by:
    Pozzo

    auto industry gets from Toyota's recent problems.  They have stopped production on most models until they can get the parts needed.  I'm wondering if there will be an added "perception" problem for Toyota that compounds the actual problem of stopping production and sales temporarily.

    Expose the lies. Fight for the truth. Push progressive politics. Save our planet. Health care is a right, not a privilege.

    by lighttheway on Fri Jan 29, 2010 at 06:57:34 AM PST

  •  THE STIMULUS IS WORKING (3+ / 0-)
    Recommended by:
    Pozzo, jerseyite, lams712

    and where are the idiots who called me an idiot a year ago when i said the economy would grow this year?

    •  They're still here (1+ / 0-)
      Recommended by:
      New Deal democrat

      The just say the numbers are cooked and anyway they don't matter and I haven't found it job, so it's impossible for there to be a recovery and the economy isn't growing and anyway its a bubble and a deflationary depression and wait until CIT goes under and swine flu and ..

  •  I can believe it (0+ / 0-)

    After a year of sending resumes to no avail.  I finally got a call yesterday for an interview.

    Does it mean a job, no...but from no calls to a call is a vast improvement.

    Its still bad.  I live in the DC area and you can count our employment section in the Post on one hand.

  •  Meanwhile, 20 ppl I know got laid off yesterday (7+ / 0-)

    Some of them indirectly, from a former employer, including my former boss - in technology, one of the "safer" fields.

    Guess where all the jobs are going? Ireland; a new bastion of tech outsourcing. And, granted, the quality is going to suffer, and the employer doesn't care because when they acquired my former employer what they really wanted was the client list. Still, this is the model - if you can, and quality can be at least partially retained, outsource the job so the warped model of the market - which the Obama admin has and continues to prop up - can be satiated.

    "Advanced estimate." Ha! It's going to be funny when the pattern repeats itself and this report is found to be false and/or specious. And we celebrate an effective growth rate of 2.5% or so, for three months, when all the other indicators are terrible, we need much stronger growth to pull ourselves out of the hole and our "peacock" President is proposing a spending freeze?

    Hilarious. So the powers that be keep throwing hollow bones and we continue to dig for marrow that has already been licked clean.

    Slap happy is a platform.

    by averageyoungman on Fri Jan 29, 2010 at 07:06:36 AM PST

  •  very balanced diary (3+ / 0-)
    Recommended by:
    ecostar, 3goldens, New Deal democrat

    thank you.  especially that last paragraph.  

    when the stimulus stops propping up the economy, when banks start putting houses on the market that they've been holding back, when the housing tax breaks cease in March, when the fed starts pulling back:  can the gains be sustained?  that is the question.

    many economists are pessimistic about growth in 2010 because of those headwinds.

  •  Great work..your view is reality based (8+ / 0-)

    Nice to see real numbers.  The small business in which I am a partial owner is experiencing some "on the ground" validation of your analysis.  We had adjusted our sales projections to reflect a pessimistic view of growth (with a back up plan) and we are on track to hit our sales targets by June.  A lot could happen to shake this up--gas prices, attacks, undisclosed financial failings on Wall Street, irrational interest rate moves--but the trend looks good. Our clients tend to be solid middle class homeowners who are reluctant to spend when they feel at risk.  Their confidence buoys my own.

  •  I. LIKE. IT. nt (0+ / 0-)

    "allow nothing to be in your life that you cannot walk out of in 30 seconds if you spot the heat around the corner". - movie HEAT

    by HEAT on Fri Jan 29, 2010 at 07:19:25 AM PST

  •  We need more consumer stimulus (0+ / 0-)

    to keep this party rolling.  Consumer demand actually decreased in the 4th quarter and is still very depressed.

    Forget about high-speed rail; do another Cash-4-Clunkers now.

  •  Look at '94 for political consequences...not good (1+ / 0-)
    Recommended by:
    lams712

    '94 Democrats took big political hits even though the economy was just about at the peak of economic recovery. So a recovering economy is not going to help Democrats in 2010 elections.

    Obama's politically weak approach (he failed to really address health care, deficit debt problems despite making them issues) is not going to help.

    Similar to Clinton and Congress's failure to get things done, Obama and Democrats failure to do what they said on health care is going to hurt badly at the polls in '10).

    Good news is Clinton, Democrats and the nation weathered that storm of GOP reactionary extremism. Bad news, is they could have avoided and helped the nation. Same is true for Obama particularly in not delivering what he promised on health care, public option choice, no mandates, lower costs, universal care.

  •  GOP beware (0+ / 0-)

    And when jobs come it won't be like 1994 which occured in spite of the recovery. Primarily because the economy is the source of Democratic problems right now while back then it certainly was not.

  •  Also: December was a weird month (1+ / 0-)
    Recommended by:
    canoedog

    In December, there were a lot of snowstorms, and, because of partial furloughs (paycuts combined with mandatory days off), many people who still have good jobs had a ton of leftover vacation days in December.

    So, even if some other fourth quarter or first quarter 2010 economic figures end up looking bad, that might have more to do with the vacation day pileup and snowstorms than any huge new slump.

  •  Our demand for ever cheaper products (3+ / 0-)
    Recommended by:
    Sparhawk, pkbarbiedoll, lightfoot

    drives manufacturing to become more efficient either through advanced mechanization or through overhead. Both of these cause harm to the average blue collar worker and a key element in the outsourcing of domestic jobs.

    Good post

    Thank you

  •  So, where are the jobs going to be? (5+ / 0-)

    And will any hiring practices change, or will the people over 50, the disabled, and people with bad credit or foreclosures on their record still be doomed to unemployment-with-no-compensation land, along with all the people who can't pass the odious pre-employment hoop-jumping tests?

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Fri Jan 29, 2010 at 07:37:56 AM PST

  •  Tipp'd and rec'd (1+ / 0-)
    Recommended by:
    lams712

    Thank you for your analysis.

    Let's remember that we should care about people even after they're born. - A. Grayson

    by IL JimP on Fri Jan 29, 2010 at 07:48:44 AM PST

  •  The 1st Step is Understanding why jobs are going (1+ / 0-)
    Recommended by:
    Nulwee

    "I'm not a Maverick, but I used to drive one."

    by StephenLahanas on Fri Jan 29, 2010 at 07:49:14 AM PST

  •  A lot of these inventories are imported (4+ / 0-)
    Recommended by:
    MindRayge, lams712, lightfoot, jeffrey789
    durable goods, appliances (washers, dryers, microwaves etc.) and consumer electronics (computers, camcorders, DVRs etc.). Domestic products to restock inventories will be produced by temporarily squeezing more productivity out of existing workers (longer hours, more overtime etc.).
    The situation now is a little different than in previous years. There is political opposition to improving the economy. The republican leadership has stated they want this administration to fail. They are retaliating against this administration for their plan to allow the Bush tax cuts to expire. Republican CEOs are evidently cooperating with that goal by laying off as many workers as possible, to purposely crash the economy so they can say, "See, we told you the Bush tax cuts were working".
  •  Krugman's right, I fear (2+ / 0-)
    Recommended by:
    lams712, lightfoot

    Personal income up, but tax revenues down?  Clearly, the government is still having to prop up a tottering private sector.

    Fourth quarter GDP up, but the Chicago Fed National Activity Index stalled?  Look for a downward revision of the GDP figures in the coming month, and note the extent to which debt-hobbled consumers and businesses are still holding back.

    The only positive takeaway I see here is the modestly healthy number for private business investment.  Maybe we'll at least have something to export again.

  •  Q about corollary to "Okun's Law" (0+ / 0-)

    "Okun's Law," which is an economic rule of thumb that for every 2% change in GDP, there is a 1% change of unemployment in the same direction.  As a corrolary of  that rule, if you take the year-over-year percentage rate of GDP growth, and subtract two, that should give you, roughly, the percentage of growth or contraction of jobs.  

    Wouldn't the corollary be to divide the GDP growth by two?
    Or did you mistate the rule of thumb?  

    You're deriving a difference from a ratio.  Seems peculiar.

  •  offshoring not limited to manufacturing! (5+ / 0-)

    Since 2001 my field, computer engineering (and also digital design) has been offshoring engineering jobs at a fast and furious pace. I read somewhere that every high-paying engineering job supports 2 or more jobs at a lower level in the community. (I tried searching for that reference but couldn't find it so it's just hearsay for now.) The real impact here is simple enough - layoffs of dozens of engineers here in Austin with hiring of 2x more in India and China.

    Somehow the free market economy has decided to abandon the U.S due to short term profit chosen over every other consideration like, loyalty to country or such.

    Isn't it sad that "selfish Christian" is not an oxymoron?

    by johngoes on Fri Jan 29, 2010 at 08:07:24 AM PST

    •  Re (0+ / 0-)

      Somehow the free market economy has decided to abandon the U.S due to short term profit chosen over every other consideration like, loyalty to country or such.

      (Engineer here as well)

      The reality is that we are too expensive and need to adjust our expectations downward toward reality. There is no reason (economic or moral) why anyone deserves high pay for work that someone somewhere else in the world can do cheaper, that goes for "high end" engineering work and manufacturing/service jobs. That's really the driving factor here.

      Most of DKos sees this as a conflict between the rich and everyone else. But people in India and China see us as "the rich".

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Fri Jan 29, 2010 at 09:24:09 AM PST

      [ Parent ]

      •  There is a big issue (1+ / 0-)
        Recommended by:
        lightfoot

        Debt for such things as homes is long term. Contracts were entered based on, among other things, that you would be able to maintain at least an income of the amount at the point of borrowing. Wages that decline or even grow but not even close to the rate of price increases makes the prospect of being able to service such debt impossible.

        So while it could be possible, in theory, to reduce one's expectation of income it doesn't work when you consider that future debt service.

        And that is truly the boulder we are pushing up the hill. As it continues we are pushing even larger boulders up even larger hills.

        The only way such an accepted outcome - having lower wage expectations - is possible is if several tens of millions of Americans get run through the foreclosure and bankruptcy ringer. I don't believe that is remotely possible in a controlled fashion as that kind of activity puts enormous pressure on elected officials to do something.

        It would be possible, or would have been possible, if the economy simply spiraled into the abyss and everything from wages to pricing to asset valuations to debt carrying capacity could be reset.

        Declining wages increases debt to income ratios and as time moves forward further losses against inflation and higher taxes eventually meet in the middle and the household detonates.

      •  India and China (0+ / 0-)

        are laughing at you.

        They don't play by your rules, they play to win, along with the global corporations who regard nation-states as just pawns in their game.

        •  Come on, (1+ / 0-)
          Recommended by:
          Sparhawk
          India and Indians are total softies when compared to other players in the world :)

          What "rule" has India (as a nation, i.e. not at the individual level; the latter should be judged person-by-person and case-by-case) broken that you speak of?

          Did you know that Indians invented the # 0 and the decimal/binary systems: a primer on Indian mathematics.

          by iceweasel on Fri Jan 29, 2010 at 07:28:24 PM PST

          [ Parent ]

  •  So let me raise theoretical points. (4+ / 0-)

    Let's suppose we could have a jobless recovery and 5% growth a year.  Would that be acceptable as policy?

    Let's suppose we could have job growth, but the type of jobs created would actually lower the standard of living and be under worse conditions than they employed had before?  Acceptable?

    Let's suppose we could have job growth, but with marginal improvements to the employed, but massive gains seen by the overlords and no guarantee that employment or job growth would be sustained or sustainable over the long term?  Acceptable?

    Denial is complicity.

    by Publius2008 on Fri Jan 29, 2010 at 08:12:04 AM PST

  •  Manufacturing Jobs? (6+ / 0-)

    That's the real key here.  An uptick in retail, sales, service, and other similar kinds of jobs is good because people are getting paid something, but without the core growth in manufacturing, this is just a temporary thing.

    IF THEY ARE GOING TO SCREW THE PEOPLE, MAKE THEM OWN IT.

    by potatohead on Fri Jan 29, 2010 at 08:13:55 AM PST

  •  LOW WAGE JOBS with no benefits. (3+ / 0-)

    I would not celebrate that.

    American Heart Association: Diet Soda can cause type 2 Diabetes.

    by jeffrey789 on Fri Jan 29, 2010 at 08:22:19 AM PST

    •  Not necessarily. (2+ / 0-)
      Recommended by:
      3goldens, New Deal democrat

      But there is a risk of that given the impetus of the recession in the first place.  

      I have long held that it's unlikely we'll ever "recover" in the sense that most people interpret "recover" - that we will go back to where we were before the recession from a jobs (total), benefits and wage perspective.  Too much of our economy prior to the recession was built on smoke and mirrors and not actual value.  The recession itself has caused people to reconnect to the value of cash over credit, and the value of saving over spending.  So given that we are a consumer-driven economy and we may be frightened away from consuming (appropriately) at pre-recession levels, we can't reasonably expect jobs to "recover" to where they were.

      Much of this is systemic, sadly.  The only serious policy movement I can see helping ameliorate this situation well into the future is to re-invest in our manufacturing economy and move away from being so service- and consumer-oriented.  I see signs that this is what the administration is driving towards, but it's not something they'll see the benefit of in four or eight years.

  •  Gee, looks like Bonndad was right (3+ / 0-)
    Recommended by:
    Pozzo, Nulwee, RandomActsOfReason

    And a lot of you here owe him an apology.

  •  Some positive signs.... (1+ / 0-)
    Recommended by:
    Mike Peterson

    .....but I'll believe the job growth when I see it. For one thing I will bet my bottom dollar that this figure will eventually be revised downward. Also, one positive quarter does NOT make for a long-term recovery. If the economy is churning out shitty dead end jobs are we really better off? And if there are no real reforms of Wall Street aren't we just setting ourselves up for the next bubble, something that will give all of the great economic numbers on paper but will turn out disastrous in the long run?

    Don't get me wrong, there are numerous positive signs, but we are NOT out of the woods by any means.

    "...if my thought-dreams could be seen, they'd probably put my head in a guillotine...." {-8.13;-5.59}

    by lams712 on Fri Jan 29, 2010 at 08:46:56 AM PST

  •  The GOP MUST be very sad!!! (0+ / 0-)

    Obama has great luck. He is going into their den today....will he say "Why are you so sad the economy grew last quarter?" (dumbasses)

  •  Where is link for "RESTOCKING" breakdown? (0+ / 0-)
  •  GDP and Jobs are not the same thing (0+ / 0-)

    GDP is just the increase in gross domestic product, but this has nothing to do with the quanta of jobs which are being created, what types of jobs those are, the benefits of those jobs, and the wages earned in those jobs, and whether they are permanent or temporary.

    "The people have only as much liberty as they have the intelligence to want and the courage to take." - Emma Goldman

    by jvackert on Fri Jan 29, 2010 at 09:13:05 AM PST

    •  true but (0+ / 0-)

      you need GDP to grow to create jobs.

      •  Not actually true... (0+ / 0-)

        You do actually not need to grow GDP to create jobs. You can increase jobs through a more equal distribution of wealth through a progressive tax system and tax system that benefits smaller businesses rather than large corporations (few of which actually pay any taxes). There are multiple ways to increase jobs without the increase of GDP. During the New Deal, GDP tanked completely, and yet there was an increase of jobs like at no other times in American history, through government action.

        "The people have only as much liberty as they have the intelligence to want and the courage to take." - Emma Goldman

        by jvackert on Fri Jan 29, 2010 at 07:21:00 PM PST

        [ Parent ]

  •  GDP Growth Is Good News (0+ / 0-)

    The problem with predicting jobs recovery on the basis of GDP growth is that GDP growth does not actually create new jobs.

    The creation of new jobs has historically been consonant with and followed upon GDP growth, but is not a consequence of the first order.

    So, we're just going to have to wait and see whether GDP growth translates into the intermediary factors which lead to the creation of new jobs.

    Specifically, we're going to have to wait and see whether this means a significant enough recovery in terms of demand to overcome the gains in productivity that employers have acquired during the job slump.

    For that reason, I'm still in "wait and see" mode.

    Recommended.

    Libertarian is another word for teabagger.

    by bink on Fri Jan 29, 2010 at 09:14:53 AM PST

    •  I Think We're All Just Guessing As Well (0+ / 0-)

      As to how other factors will influence the ability of GDP gains to translate into growth in jobs that is meaningful to the welfare of the average working household.

      The only comparable experience for which we have much data is the Great Depression.  But it's difficult to compare the current situation to that one, because government policy is so much different.

      Comparing today's situation to recessions in the 1980s and the 1990s is going to be fraught with problems, because in those times, the economy did not have to reckon with a global economic collapse, for example, or the radical disruption of consumer and business access to credit.  Nor were foreclosures the problem that they are now.  Nor was off-shoring of jobs and industrial automation such a big factor.

      On the plus side for us, we have the Internet ...  I suspect that it will reveal itself to have yet another transformative role, in both economics and politics, going forward.

      Libertarian is another word for teabagger.

      by bink on Fri Jan 29, 2010 at 09:25:59 AM PST

      [ Parent ]

  •  OK, sure (2+ / 0-)
    Recommended by:
    taonow, annapaxis

    High GDP when you're running massive deficit spending is like saying "great, I'm unemployed, but since I've started living off my credit card I've had 70% more steak dinners: it must be the right policy."

    Um, yeah.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri Jan 29, 2010 at 09:18:05 AM PST

  •  None of these stats count. No good news is real. (3+ / 0-)
    Recommended by:
    RenaRF, Pozzo, New Deal democrat

    We're all doomed and nothing will ever be any good ever again.

    xoxo,

    The ODS squad of incredibly rational people

    Picture a bright blue ball just spinnin' spinnin' free. It's dizzy with possibility.

    by lockewasright on Fri Jan 29, 2010 at 09:18:25 AM PST

  •  Is this good news for John McCain? eom. (0+ / 0-)
  •  Roubini was wrong again (0+ / 0-)

    surprise, surprise.

  •  I swear some people never want to hear good news (2+ / 0-)
    Recommended by:
    RenaRF, Pozzo

    Sure it would be a mistake to see these numbers and think, "All better now", but c'mon these this  is good news and it rerpresents something real.  Some folks won't be happy until unemployment is -4% and we all have houses with 0% interest rate mortgages.

    I will not speak with disrespect of the Republican Party. I always speak with respect of the past. -Woodrow Wilson

    by Gangster Octopus on Fri Jan 29, 2010 at 10:11:56 AM PST

  •  What I want to know is if the diarist is going (0+ / 0-)

    to be around to deliver his/her Mea Culpa to us if they are proven wrong in the future months (and in my mind there is at least an equal chance that they will be).

    Or will the diarist just (like others in the past have)slink/disappear away to strike again at another more perceived opportune time.

  •  Jobs? (1+ / 0-)
    Recommended by:
    emal

    Calculated Risk says it better than I can so here is his take:

    Any analysis of the Q4 GDP report has to start with the change in private inventories. This change contributed a majority of the increase in GDP, and annualized Q4 GDP growth would have been 2.3% without the transitory increase from inventory changes.

    Unfortunately - although expected - the two leading sectors, residential investment (RI) and personal consumption expenditures (PCE), both slowed in Q4.
    ...
    The transitory boost from inventory changes is frequently a great kick start to the economy at the beginning of a recovery - as long as the leading sectors (PCE and RI) are also picking up. This report has to be viewed as concerning ... and is reminiscent of Q1 1981 and Q1 2002 ... both examples of inventory changes making large contributions to GDP, but underlying growth remained weak.

    On the jobs front, the recent weakening of weekly claims is disturbing. While the first couple of weeks of January were hard to judge (seasonal adjustment are large), last weeks numbers (the first of the year without much of a seasonality adjustment) were not good at all.

    I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

    by taonow on Fri Jan 29, 2010 at 10:23:36 AM PST

    •  Initial jobless claims (2+ / 0-)
      Recommended by:
      askew, Pozzo

      Last week's numbers were the best of any except for the 3 or 4 weeks prior.  If the jobless claims aren't trending lower in a couple of weeks, then maybe you've got something.  All they show now is that late December's seasonal adjustment was a little too generous.

      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Fri Jan 29, 2010 at 11:27:15 AM PST

      [ Parent ]

  •  Very useful information. Reminds me of when this (4+ / 0-)
    Recommended by:
    askew, Pozzo, 3goldens, New Deal democrat

    Blog often was used to educate rather than just to bitch.

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