Joblessness Rises: Are We on the Verge of Another Recession?

[xchrom]

http://www.alternet.org/economy/155688/joblessness_rises%3A_are_we_on_the_verge_of_another_recession/

The White House must be telling itself there are still five months between now and Election Day, so the jobs picture could brighten. After all, we went through a similar mid-year slump in 2011 but came out fine.

But however you look at Friday’s jobs report, it’s a stunning reminder of how anemic the recovery has been – and how perilously close the nation is to falling into another recession.

Not only has the unemployment rate risen for the first time in almost a year, to 8.2 percent, but, more ominously, May’s payroll survey showed that employers created only 69,000 net new jobs. The Labor Department’s Bureau of Labor Statistics also revised its March and April reports downward. Only 96,000 new jobs have been created, on average, over the last three months.

Put this into perspective. Between December and February, the economy added an average of 252,000 jobs each month. To go from 252,000 to 96,000, on average, is a terrible slide. At least 125,000 jobs are needed a month merely to keep up with the growth in the working-age population available to work.

Face it: The jobs recovery has stalled.

[ZM90]

1. Yes and the Republicans are surely grinning and blaming Obama for it at the same time

despite the fact that their obstruction is the cause of this. I bet the rethugs can't wait until they get to downgrade the nation's credit rating again with their obstruction and then they will proceed to of course blame Obama for that too.

[rfranklin]

2. ART CASHIN: This Month's Jobs Report May Have Been Distorted By Lehman Brothers

Analysts are scrambling to figure out if this was a noisy one-off that we can blissfully ignore, or if it's something more serious.

There's some chatter among Wall Streeters that we may be able to go with the former. And it has something to do with what Art Cashin describes as the Lehman distortion.

Basically, when Lehman Brothers went bankrupt in 2008, the effects were so devastating that it distorted all of the seasonal adjustments that we've come to accept in the monthly jobs data.


Read more: http://www.businessinsider.com/art-cashin-jobs-report-lehman-brothers-distortion-2012-6#ixzz1wdVkDNsA

[originalpckelly]

3. I'm curious:

Isn't employment a lagging indicator of a recession?

[rfranklin]

5. Employment is NOT a lagging indicator, although duration of unemployment IS.

Employment is NOT a lagging indicator, although duration of unemployment IS. The Conference Board, a not-for-profit economic study organization, publishes three popular indexes: 1) the Leading Economic Index (LEI), which foretells turning points in the economy before we move into or out of recessions, 2) the Coincident Economic Index, which measures current economic conditions, and 3) the Lagging Economic Index, which changes direction following the others....

...The Unemployment Rate and the Average Duration of Unemployment have continued to worsen, and they can be expected to improve only after the economic recovery is well underway. To summarize: Average Duration of Unemployment and the unemployment rate are lagging indicators, Nonfarm Payrolls is a coincident indicator and Initial Claims for Unemployment Insurance and Average Manufacturing Workweek are leading indicators. The last two of these have already turned for the better. The next one to improve, as the economy recovers, likely will be Nonfarm Payroll Employment.

http://seekingalpha.com/article/154424-is-employment-a-lagging-indicator

[rfranklin]

6. This spring's job slump not so bad by comparison

WASHINGTON—Two straight months of disappointing job growth have raised fears that the U.S. economy is stalling for the third year in a row.

But don't despair just yet: This year's slowdown is an improvement on last year's, which was an improvement on the year before's.

Consider:

--Hiring decelerated to an average 135,000 a month in March and April. That was slower than the December-February pace of 252,000 a month, but still a solid six-digit gain each month.


--During last year's slowdown, from May through August, job growth came in below 100,000 for four straight months. The average was 80,000 jobs a month.


--In 2010, the slowdown, from June through September, consisted of four straight months of job losses. The average loss was 76,000.


"We're forming a base," says economist Joel Naroff of Naroff Economic Advisors. "The level of confidence going into the spring and summer is definitely higher this year than last year."


Naroff expects the economy to create more than 2.4 million jobs this year, which would be the most since 2005. Last year, 1.8 million jobs were created. In 2010, 1 million.

http://www.boston.com/news/nation/articles/2012/05/31/this_springs_job_slump_not_so_bad_by_comparison/

[Eddie Haskell]

4. This is a reelection killer

and anyone that thinks otherwise is delusional. The economy needs to get better quickly or Obama is toast.