Putting a stake through the heart of an employment canard

- by New Deal democrat

Since the site's occasional Doomoron troll has posted one of his usual central falsehoods, claiming "Bonddad and NDD were dead wrong in predicting the recovery of employment," it's time to set the record straight.

Bonddad is a big boy and can speak for himself, but as for me , in September 2009, as the economy was still shedding over 200,000 jobs a month, I wrote a 6 part analysis looking at indicators which in the past had led the jobs turnaround and concluded:

Based on my analysis above, November or December are when I believe that turning point will be reached, plus or minus one month in either direction. Let me be the first to acknowledge that this is not a scientific truth or certainty, but a best estimate based on a logical review of existing data with a long history that accommodates both traditional and "jobless" recoveries. Nevertheless, at least in terms of payroll growth, the analysis in these six installments cause me to predict that this will not be a "jobless recovery" for long.

So what are the facts? Here's how private jobs look beginning in August 2009:



As of the most recent revisions, the turning point was in February/March, only 2 months later than my window. I was off by a grand total of 63,000 jobs lost in January and February. In fact, before the most recent revisions, the 2010 current data showed my prediction to be spot on. By the way, the data looks the same for all jobs if you take out census hires and fires, but there's no graph for that.

Since then, every single month has shown job growth - clearly not enough compared with the 8 million lost jobs from 2007, but consistent growth nevertheless. I'll let you decide if that means I was "dead wrong in predicting the recovery of employment" or not.

As for our troll's hero, the Pied Piper of Doom, on January 13, 2010 he claimed that the only job growth in 2010 would be that of Census hiring. OOPS!

And while I was writing the above in 2009, he said:

overall unemployment rates are expected to enter into the double digits (and I'm only talking about the Bureau of Labor Statistics' U.3 index, not the more accurate, and much greater numbers posted in their U.6 index), and remain there throughout 2010

In fact, the highest unemployment reached in 2010 was 9.8% OOPS!! OOPS!!

He also predicted in March 2010 that the unemployment rate would not fall below 9.7% at any point in 2010.

In fact, unemployment fell below 9.7% in May and remained below 9.7% for all but two of the next 7 months. OOPS!!! OOPS!!! OOPS!!!

Facts are very inconvenient things. The above are just 3 of the over 100 false prophecies made by the Pied Piper of Doom about which that I have kept book. His acolytes have to have very big memory holes down which to pour and forget about all of those false prophecies.

By no means do I claim infallibility. But by now the facts have put a stake through the heart of the canard repeated by our troll.

From Bonddad:

On August 22, I wrote the following:

Let's tie all of this information about unemployment together.

1.) The trend of initial unemployment claims is down. We see this in the 4-week moving average, along with other data such as the Challenger job cut report, the decrease in the number of seasonally adjusted mass lay-off events and the decrease in the number of seasonally adjusted people laid-off in mass lay-offs. Because the number of initial claimants is decreasing, we can expect a slow improvement in the number of people unemployed for various lengths of time.

2.) The structure of unemployment is showing improvement. The number of people unemployed for less than 5 weeks has been decreasing since the beginning of the year. The number of people unemployed for 5-14 weeks and 15-26 weeks dropped in the latest jobs report. The longer term unemployed are still increasing, but given the drops in the other metrics this number should start to show a decrease within the next 4-6 months.

Now -- that leads to the final question: when will the jobs come back? In order for that to happen we need to see at least one quarter of a positive GDP and probably two. That means the soonest we can expect a drop in the unemployment rate would be the a few months from now and that is only under the rosiest of scenarios. The most likely possibility is it won't be until the end of the first quarter of next year before we start to see a ticking down (and that assumes a stronger rate of growth than I think is going to happen).

So, in the meantime what should we do?

1.) Make sure the longer-term unemployed are given benefits and other help to ease their suffering.

2.) Ask ourselves is there a way we can better implement the stimulus money to increase the rate of GDP growth and thereby see a faster drop in GDP?

As NDD has pointed out above, we started to see job increases in the first quarter of 2010.

In addition, if you look at the way the recovery has unfolded, it has done so more or less in line with what I wrote in the First and Starts Expansion. And, I should also add that both NDD and I have advocated for the creation of a new WPA, along with highlighting the importance of maintaining our infrastructure. See here, here, here, here, here and here.

None of this will of course appease the trolls, but then nothing ever will.