Is the Economy "Out of the Woods?": The Real Jobs picture.

[marmar]

from HuffPost:



Danny Schechter
Is the Economy "Out of the Woods?"
Posted October 7, 2007 | 09:14 PM (EST)




Can We Trust The New Jobs Report That Has Led to Rosy Forecasts?

On Sunday, October 6, the Public Editor of the New York Times pointed to all the discrepancies and conflicts in the violence figures coming out of Iraq. He called for more nuanced reporting and increased public skepticism. He noted that the perception of progress there has been bolstered by the release of questionable statistics.

What's true of reporting from Iraq is also true about the job figures that the government releases monthly gaging the health of the U.S. economy. Can they be trusted? And what about the reporting on them? This is an especially timely issue as Fox News gets ready to launch its own heavily-hyped new Business Channel.

For weeks, we have heard all these warnings about the financial crisis sharpening and a possible recession. Reality intruded after a big subprime relief rally sent stocks soaring. Wall Street was quickly back in swamp, and it looked like the Federal Reserve Bank would have to cut interest rates again to further bail out the markets.

But then, on Friday, the Bush Labor Department announced a new jobs report and much of the coverage turned upbeat.

The report offered preliminary data claiming that the economy added l00,000 jobs in September. Suddenly, lower job figures from July and August were also magically revised upwards.

Wall Street went crazy. The S & P went up and the headlines went positive.

Here are two examples of the spin: The New York Times: "JOB GROWTH LOOKS ROSIER, EASING RECESSION FEARS." The Wall Street Journal, "US ECONOMY DOWN, NOT OUT."

The new numbers accounted for the turn around? Bear in mind, back in the 90s, in the Clinton years, 200,000 new jobs was what was expected on a monthly basis to assure economic growth. That was the gold standard. Now that number has been cut in half and is suddenly being treated as Great Leap Forward. How did the job numbers turn around? Or have they?

Reports the Journal, "much of the revision was caused by recalibrating seasonal fluctuations in government employment, including teaching."

Mmmmm..."recalibrations of seasonal fluctuations! I 'd love to let Stephen Colbert loose on that phrase. Look more closely, and you will see these recalibrations: deal with GOVERNMENT EMPLOYMENT, not jobs in the private sector. There were 71,000 jobs "recalibrated" in local education.

Yet establishment economists are saying these jobs are not what the economy really needs. The Journal quotes Nigel Gault, chief economist at Global Insight to the effect that "private sector jobs are the underlying driver of the economy."

Yes they are, but these are not them. The biggest jump here is in government jobs. NBC News reported on yet more job cuts in Flint Michigan Saturday and that manufacturing jobs are at their lowest point since l950.

Presumably you would think the disappearance of these jobs would be upsetting to the wise men of Wall Street. In fact, they are but their concerns are being buried in stories that fuel the perception that the corner is being turned.

Example: way down in the 19th paragraph of the Journal article, The Vice Chairman of the Federal Reserve Bank Donald Kohn says he expected that the nations "economic performance would be better." He says, "You should view these forecasts even more skeptically than usual."

But the business press, like the market that loves any excuse for a good rally, is not that skeptical. They tend to like positive numbers and downplay negative ones often without analyzing them.

Back at the NY Times, you had to jump from page one in the Business section with its "Job Growth Looks Rosier" headline to page 8. There, at the very bottom of the last page, next to the corporate bond data -- a place most readers don't venture -- are these quotes;

"I don't think we're totally out of the woods yet," said Jan Hatzius, Chief United States economist for Goldman Sachs. "There are some real problems at the foundations of the economy. If nothing really bad happens, we can muddle through and unwind some of these problems over a lengthy period of time. And if something bad happens, we go into a recession."

So there it is that depressing "R word" again but pushed all the way down in the story. In journalism, we used to call this 'burying the lead.' ......(more)

The complete piece is at: http://www.huffingtonpost.com/danny-schechter/is-the-economy-out-of-th_b_67504.html

[Double T]

1. bushco , the fed, wall street and corporate america are manipulating.......

EVERYTHING possible to paint a rosy picture of a failing economy. THEY lie about inflation, ignore the declining US dollar and drill a bunch of BS happy talk about how great 'things' are when ACTUALLY the opposite is true. The reduced fed rates are desperation props by the WH and the fed to keep the illusion of a great economy going until bushco leaves office. Economic propaganda BS can only be stretched so far; the 1929 scenario is upon US.

[papau]

2. The changed "seasonal" factors will affect the January 09 adjustment - funny how

that is post election.