Reason Magazine
- reason.com
- reason.tv
- reason.org
- Donate
- Site Search:
Reason on Facebook
Reason on Twitter
Reason on YouTube
Reason RSSGet Reason E-mail Updates!
Manage your Reason e-mail list subscriptionsadvertisements
It's the Economy, Stupid, Redux?
The jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers cut payrolls for the eighth month in a row. Job losses in June and July turned out to be much deeper. The economy lost a whopping 100,000 jobs in June and another 60,000 in July, according to revised figures. Previously, the government reported job losses at 51,000 in each of those months.
So far this year, job losses totaled 605,000.
The latest snapshot was worse than economists were forecasting. They were predicting payrolls would drop by around 75,000 in August and the jobless rate to tick up a notch, to 5.8 percent. The grim news comes as the race for the White House kicks into high gear. The economy's troubles are Americans' top worry.
On the flip side, worker wages gained about 0.4 percent in August over July. And second-quarter growth (latest available) was 3.3 percent (up from an original 1.9 percent estimate).
reason's Matt Welch on bubble bursting here.
Seasonal adjusted uemployment rates by month for past 10 years here.
Average annual unemployment rates going back to 1948 (fascinating!) here.
What?|9.5.08 @ 3:10PM|#
The economy is growing while the unemployment rate goes up and wages go down? Huh?
Gilbert Martin|9.5.08 @ 3:17PM|#
Every 4 years the politicians put forth the idiotic notion that the economy is created by government and can be managed by government.
|9.5.08 @ 3:28PM|#
What?--- I dunno, 6.1% isn't too bad anyway, but its entirely
possible that between productivity gains &c. that the economy
is growing, those lucky enough to be in good jobs are getting
raises, and its just the poor saps in Detroit and the mortgage
business that are getting canned.
Or the numbers suck.
Elemenope|9.5.08 @ 3:29PM|#
Gil --
I've never heard of a serious modern politician that claimed that
the government *creates* the economy.
You are right though, that they really love the pander of the
notion that they can *control* it.
Anonymoose.|9.5.08 @ 3:35PM|#
I've never heard of a serious modern politician that claimed that the government *creates* the economy.
They put forward the idea they create jobs, which is basically the same thing.
Ghost of Jimmy Carter|9.5.08 @ 3:38PM|#
Can you say "Misery Index"?
10% inflation with 10% unemployment == 20% misery index.
BDB|9.5.08 @ 3:39PM|#
Its cute who Republicans still invoke the specter of Jimmy Carter. Almost as cutely pathetic as when Democrats in 1980 were still talking about Herbert Hoover.
Steve Verdon|9.5.08 @ 3:43PM|#
The economy is growing while the unemployment rate goes up and wages go down? Huh?
Sure. No problem, employment/unemployment is a lagging indicator.
Look at the graph for the last 10 years. The last recession ended,
IIRC, in November of 2001. Yet unemployment continued to rise until
peaking in June of 2003.
There is no doubt that the economy has weakened over the past
several months, and despite the recent good news in terms of GDP,
may stay weak for awhile. As such, for unemployement to go up is
not something shocking.
As for wage growth, keep in mind it is a weighted average of all
wages. So again it is possible that the wage goes up while
unemployment goes down.
Unusual, but not impossible or all that shocking.
|9.5.08 @ 3:51PM|#
I've read that the economic growth figures are based on an
assumption that we are experiencing the lowest inflation in five
years.
Does that sound plausible to you?
|9.5.08 @ 3:57PM|#
Almost as cutely pathetic as when Democrats in 1980 were
still talking about Herbert Hoover.
I bet Obama will compare Bush to Hoover within the next 2
weeks.
Any takers?
kinnath|9.5.08 @ 3:58PM|#
Its cute who Republicans still invoke the specter of Jimmy
Carter.
I came of age, got married, and tried to raise a family during the
Carter years. Those times are never going to be erased from my
memory.
By the way, have never voted for a democrat or republican for
president. I voted for Ed Clark in 1980, and have voted LP every
presidential cycle since then.
BDB|9.5.08 @ 3:59PM|#
"I've read that the economic growth figures are based on an
assumption that we are experiencing the lowest inflation in five
years."
Probably true because they take out food and fuel making it a B.S.
number.
"I bet Obama will compare Bush to Hoover within the next 2
weeks."
Hes too young to do that. Plus everyone that remembers Hoover is
dead.
BDB|9.5.08 @ 4:01PM|#
"
I came of age, got married, and tried to raise a family during the
Carter years. Those times are never going to be erased from my
memory."
Well it might work on you. But a good part of the electorate this
year either wasn't born or was too young to remember it, so
invoking it makes Republicans look old. Most people now just think
of Jimmy Carter as that guy who builds houses.
T|9.5.08 @ 4:06PM|#
Most people now just think of Jimmy Carter as that guy who
builds houses.
Most people now don't think of Jimmy Carter at all. Which is as it
should be, since we should all try to ensure he never has any
substantive role in national discourse ever again.
kinnath|9.5.08 @ 4:08PM|#
Well it might work on you. But a good part of the electorate
this year either wasn't born or was too young to remember it, so
invoking it makes Republicans look old.
Not particularly relevant. I never experienced the depression or
WWII. But the people that did controlled government right up
through GHW Bush.
Right now, the boomers (people my age and older) are still
struggling to take the reins aways from old geezers like
McCain.
Obama may be the darling of the younger generation, but they don't
vote consistently nor do they hold any position of power at any
level of government.
Besides, people that panic over 6% unemployment just plain piss me
off.
Elemenope|9.5.08 @ 4:17PM|#
Besides, people that panic over 6% unemployment just plain
piss me off.
Personally I'd give a pass to the people *who are in the 6%* to be
pissed off.
Wouldn't you?
kinnath|9.5.08 @ 4:22PM|#
From Gallagher:
one fourth of the people that I meet are stupid.
people complain about 10% unemployment . . .
me, I complain about 15% of stupid people that got jobs.
kinnath|9.5.08 @ 4:29PM|#
By the way, I was married with kids and unemployed when Gallagher made that joke. I still laughed at it.
|9.5.08 @ 4:35PM|#
Well, we know Bush doesnt care about the economy and neither
does his "mini-me" sidekick McBush. they both seem to think
everything is just hunky dory. I guess since they have MILLIONS in
the bank it doesnt matter.
Jiff
http://useurl.us/12m
Happy Jack|9.5.08 @ 4:43PM|#
And second-quarter growth (latest available) was 3.3 percent
(up from an original 1.9 percent estimate).
Nationwide, sure. But what are the numbers in MI, OH, and PA? Those
are the states that will count in November.
|9.5.08 @ 4:48PM|#
The business cycle happens. 6.1% is not historically high by any standard. As pointed out above it is a lagging indicator. As the oil bubble bursts and the housing market works itself out, growth should go stay around 3% and the UE rate will come down again sometime next year. Even with a housing bubble bursting and an oil shock, the unemployment rate is still equal to 1994, when Bill Clinton was in office and presiding over a "booming economy.
|9.5.08 @ 4:57PM|#
Didn't a mandated minimum wage hike just come to pass? Didn't the government effectively force people out of work with it?
|9.5.08 @ 4:58PM|#
Very interesting. My employer has job vacancies of about 10% in everything from unskilled assembly to skilled blue collar to management and can't find qualified employees at good wages. [Plenty of applicants who fail drug test, don't show up for second interview, don't show up for work after first week, etc. etc.] Maybe things will pick up but it would appear that with 5% or lower, you are scraping the barrel.
|9.5.08 @ 4:59PM|#
The business cycle doesn't generally happen in 5-6 years,
though.
We're in what's supposed to be the upswing of the business cycle,
after the recession of 01. Were it not for the financial
shenanigans that turned the downturn in the housing market into a
cascade of crises in the markets, that's where we'd be.
OTOH, it was consumer spending based largely on those same
shenanigans that made the 01 recession relatively mild.
The last time an economic downturn was caused by - as opposed to
resulting in - a downturn in the financial markets? 1929.
Chauncey|9.5.08 @ 5:00PM|#
As long as the roots are not severed, all is well. And all will be well in the garden. . . . Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.
short, fat bastard|9.5.08 @ 5:06PM|#
With higher unemployment, you get a better caliber of staff taking your order at McD's. So I guess there is an upside.
|9.5.08 @ 5:06PM|#
"The last time an economic downturn was caused by - as opposed
to resulting in - a downturn in the financial markets? 1929."
1987 Joe. And 2001 after the tech bubble burst. Further, we are
seven years into the business cycle and the economy just suffered
an enormous price shock from oil. You might have missed it but the
price of oil doubled in the last year. It was in a few of the
papers.
It would be nice if you actually you know thought about economics
in terms beyond "Democrat in office, economy good, Republican in
office, economy bad".
Joenomics: So easy a caveman can do it.
|9.5.08 @ 5:16PM|#
There wasn't a recession in 1987, John.
The tech bubble burst in 2000, and the capital swiftly moved into
the go-go real estate market.
Further, we are seven years into the business cycle and the
economy just suffered an enormous price shock from oil. An
event which took place after the housing bubble popped, and after
the trends started to turn south.
You, John, are perhaps the most poorly informed person to regularly
comment on these threads this side of Gil Martin. Seriously, learn
something before you decide I don't know what I'm talking about,
just because it isn't what you want to hear.
|9.5.08 @ 5:18PM|#
Oh no, I get it, there was a decline in the stock market in
1987, and then, after 3-4 years of growth, it caused a
recession.
Dumb as an iron rail, John.
kinnath|9.5.08 @ 5:19PM|#
And another round in the never-ending grudge match between joe
and John.
Quittin time on Friday afternoon. I hope you two enjoy beating each
other to a bloody pulp.
|9.5.08 @ 5:20PM|#
There wasn't a recession this time Joe, outside of your imagination. There was a slowdown in 2000 and 01 primarily because of the tech bubble bursting. The asset bubble in Japan burst in the early to mid 90s before the slowdown. There was a slowdown in 87 that happened as a result of the 87 crash. I am very well informed, you are just so ignorant and biased you won't listen to anything that doesn't fit the Dem good republican bad format. Caveman logic is about as high as you go on any subject that is even remotely political, which is sad because you are not a stupid person, just grossly narrowminded and dogmatic. Try thinking about econ sometime. It is a great subject.
|9.5.08 @ 5:21PM|#
I'm done. I had a point, I made it, and I had a bug to slap
away.
By all means, if anyone who can put the shapes in the right holes
in the box cares to address what I wrote, I'm all ears.
BDB|9.5.08 @ 5:22PM|#
I thought between 1982 and 1990 we had growth, and then a pretty nasty recession in 91-91?
|9.5.08 @ 5:27PM|#
There wasn't a recession this time Joe, outside of your
imagination. A bit early to make that pronouncement, chief.
Actual economists are talking about a slowdown which might or might
not qualify as a recession, and which will deepen in the short
term.
There was a slowdown in 87 that happened as a result of the 87
crash.
Not a recession.
The asset bubble in Japan burst in the early to mid 90s before
the slowdown. The early-to-mid 90s were AFTER the recession,
John.
And 2001 after the tech bubble burst. Ten years after the
previous recession, and investment capital as a whole was quickly
replaced through the housing market. IE, not the cause of the
recession.
No, but seriously, the only possible reason you don't like what I'm
writing is cuz i kant do teh ekinomiks.
I love people who get to the demand curve on page 6 of a text book
and think they're knowledgeable.
|9.5.08 @ 5:29PM|#
BDB,
Growth slowed a bit in 1987, then picked back up, until
91-92.
Oh, and, oogo booga, joe kill many elk with stick!
Sarah Palin|9.5.08 @ 5:39PM|#
Oh, and, oogo booga, joe kill many elk with
stick!
Can you field dress it? Did you attend a town meeting once? Then
you might be the next VP!
Nate|9.5.08 @ 6:24PM|#
creech- your employer is desperate to find qualified candidates,
yet is comfortable rejecting them *after* they've chosen to hire,
based on the results of a drug test?
Nothing personal, but that company deserves its pain.
Paul|9.5.08 @ 6:34PM|#
Personally I'd give a pass to the people *who are in the 6%*
to be pissed off.
Sure. If unemployment reached .0001%, then the .0001% are pissed
off.
Nick|9.6.08 @ 2:11AM|#
Yeah, what Don Mynack said.
As soon as that came out, I was thinking, is this somehow related
to the rise in minimum wages? When can we get the figures as to how
many of the newly unemployed are minimum wage earners? It would be
a dream if there was a correlation so we can ream the Democrats
with the news. Hasn't anyone jumped on this already?
JMR|9.6.08 @ 5:02AM|#
It's Friday, and we have 2 special bailouts for you this weekend. They're named "Fannie & Freddie." I wonder if the Chinese government is among the shareholders slated to be wiped-out? That should lead to some geopolitical fun. (I'm sure it's all those damn Libertarians' fault!)
|9.6.08 @ 11:20AM|#
I guess that would depend on who you ask! Dictator Bush and his
lil mini-me sidekick "McBush" think everything is just hunky dory!
Just shows they have lost complete touch with the sheeple.
Jish
www.anonymize.kr.tc
|9.6.08 @ 1:25PM|#
So far this year, job losses totaled 605,000.
How many of those who lost their jobs are still unemployed? And
what about job gains? While we do have problems, it's not so
horrible as the media makes it out to be.
|9.6.08 @ 2:15PM|#
Brandybuck-
Its not the media. If anything, they are underselling the reality.
Don't tell me you are one of those people who finds the gvt.'s
numbers credible or reliable.
|9.6.08 @ 6:58PM|#
liberymike,
The media thrives on bad news. No one buys a newspaper or switches
channels to a talkshow to hear good news. Doom and gloom
sells.
I don't find the government's numbers particularly reliable, but I
do know the corresponding "jobs created" statistics are NEVER
reported by the media. We're not hearing the whole story. I'm not
saying the economy is great, because it's not. Unemployment is
high. But we're not in the middle of the next Great Depression like
the media is implying.
|9.6.08 @ 10:06PM|#
"creech- your employer is desperate to find qualified
candidates, yet is comfortable rejecting them *after* they've
chosen to hire, based on the results of a drug test?
Nothing personal, but that company deserves its pain."
Deserved repeating.
Don't piss away your liberty. I'm tired of the war on some drugs
piss testing. It doesn't prevent accidents in the workplace and
does not increase the reliability of potential employees. It is a
waste of time, money and dignity.
Site comments/questions:
Media Inquiries and Reprint Permissions:
(310) 367-6109
Editorial & Production Offices:
3415 S. Sepulveda Blvd.
Suite 400
Los Angeles, CA 90034
(310) 391-2245