Fed sees signs U.S. job recovery in early stages

[54anickel]

http://www.forbes.com/markets/newswire/2004/04/27/rtr1349349.html

Wow, of all the things to have come out of the mouths of the Fed. Wish they'd have stated these thing sooner. It could have saved much bantering back and forth in some of the threads regarding employment. (You know who you are) :evilgrin:

snip>
The unemployment rate has eased, but a big reason for that is that discouraged job-seekers have dropped out of the search for work and hence are no longer counted, as closely watched Fed Governor Ben Bernanke noted last week.

"The official unemployment rate of 5.7 percent understates to some extent the true amount of slack in the labor market," Bernanke said, adding there was a risk to the recovery as long as the labor market remains weak.

snip>
Around 330,000 net new jobs would be needed in April just to keep the unemployment rate steady if the labor market participation rate -- which measures the number of people who either have a job or are looking for one -- rises 0.1 percentage point, Bernanke said.

Bernanke is widely seen as one of the most dovish members of the Fed's policy committee, but similar notes of caution on jobs come from centrist Michael Moskow, President of the Chicago Fed, and their boss, Chairman Alan Greenspan.

Last week Greenspan pulled out an obscure number to show the U.S. Congress that 85,000 Americans exhaust their jobless benefits every week and so don't figure in weekly statistics.

more...

[PROGRESSIVE1]

1. John Kerry needs to beat the "Jobloss Recovery" meme....

over and over and over!

Also, he needs to emphasize that the jobs coming back are:

-Lower Wage
-Temporary
-McDonalds

Also, we must remember that real wages are going DOWN, DOWN, DOWN!!!

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN,

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN,

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN,

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN,

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN,

DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN, DOWN

Also, let's not forget about the outsourcing by the Wall Street Pigs!

[whistle]

2. This means that all the good press about the economy ....

...growing must be attracting the discouraged workers back into the job market. And, for those following the numbers closely, that will mean a rise in unemployment. These statistics just keep turning around and biting BushCo on the ass!!! The Fed came out with this early to ease the shock, so they can then say when the numbers come out "We warned everyone this would happen". GreenSpam, GreenSpeak, GreenSham, GreenSpit, GreenSputter, blah, blah, blah, blah.

No more Bush...No more Bush...No more Bush...No more Bush...No more Bush...No more Bush!!!

:kick: :kick: :kick:

[54anickel]

4. That and they need to have justification for not raising rates sooner

than they will probably "getroundtoit". They have the bond market to contend with now that they've "officially" recognized the return of inflation.

http://www.prudentbear.com/archive_comm_article.asp?category=International+Perspective&content_idx=32208

snip>
Against this backdrop of increased leverage and unprecedented volatility in the bond market, it is somewhat disingenuous for Mr Bernanke now to claim that “market interest rates have generally responded continuously and in a stabilizing manner to economic developments”, or that “monetary conditions in the United States are in the process of normalizing”, as he did last week. To describe today’s volatile monetary conditions in the US as “normalizing” is akin to describing the temperature as “average” when a person places his feet into two buckets of water, one freezing cold, the other boiling hot. In fact, the current situation in the bond market is most unusual. Normally, the bond market doesn't begin to drop sharply (and certainly doesn't crash) unless the Fed is already in a tightening mode, and usually has been in one for some time. Historically, bond crashes have occurred when the Fed is already in motion and there is a sudden panic that the end-point for their tightening round could be much further out in time and magnitude than previously imagined (e.g., late 1987, late 1994).


Today, by contrast, we are in a highly unusual situation in that the Fed has done nothing but there is almost universal market agreement that a large tightening lies ahead, implying little confidence in the Greenspan/Bernanke reassurances. The problem for Messrs Greenspan and Bernanke is that the whole inflationary expectations game can only work when all members of the central bank are singing from the same hymnal (ironically, this alleged lack of unity, was one of the reasons cited for the euro’s recent drop against the dollar). But soon-to-retire Fed Governor Robert Parry recently said the neutral Fed Funds rate was 3.0-3.5 per cent, implicitly suggesting the Fed may be 200 basis points behind the curve.


These comments fly in the face of Parry’s recent advocacy of a LOWER Fed Funds rate (per the minutes of the most recently published Monetary Policy deliberations), and may simply constitute a belated attempt to restore his earlier reputation as “inflation hawk” before heading off to retirement. But even if Parry’s words do not match his recent actions, they raise all sorts of conundrums: the bond market could very well crash now without the Fed doing a blessed thing because some of its own members have now conceded they have a huge tightening job to do and haven't even started yet against a backdrop of historically unprecedented leverage. What happens if the Fed does raise rates in June? Who wants to be long bonds after the first 50bp hike when someone like Mr Parry has signalled to the market that there may be another 150-200bp coming right behind it? (This potential problem largely underlies the reasoning of Morgan Stanley chief economist, Steve Roach, who has made the case that the Fed might as well go to 3 per cent immediately, because at least then the market will have some possible belief that they are finished tightening and the next move could be an ease. It is hard to see market participants adopting that view in June or August if the FOMC moves rates up a mere 25-50bp.)

Parry and Roach are not alone. We note that highly astute market observers, such as Jim Bianco, have made a powerful case for a Fed tightening as early as June (leaving it to August or September would, Bianco suggests, make the Fed part of the election rhetoric) on the basis of a stronger than expected economy which is beginning to generate significant job growth.

But whilst we have profound respect for the views of Bianco, we believe he makes the mistake of assuming that the Fed is truly serious about dealing with today’s rampant inflationary credit bubble. Our view is markedly different: In today’s world, decades of government intervention and the massive expansion of moral hazard on the part of the Fed to prevent financial crises and price deflations have encouraged economic agents to accumulate the highest private debt burdens ever attained. Even without price deflation, these debt burdens are now acting to suffocate demand and threaten stagnation, recession and financial crisis. There is only one socially acceptable method left to eliminate these burdens – namely, through a debt-confiscating policy of deliberately engineered inflation.

more...

[sadiesworld]

3. Blah, blah, blah.

Show me some extra pulp in the local help wanted and I'll show you a recovery.

[rapier]

5. notes

THe Fed under Greenspan has become a non stop blab machine to tout the economy. The simple fact is that this is not the Feds job. The extent to which Greenspan and other governors are out on the hastings weekly, if not now daily, singing the praises of the economy or their policy is the extent to which they are in big trouble.

All this cheerleading, which is meant firstly to manage the markets, is disgusting, dishonest and corrupt. Disinformation and lies pepper their rhetoric. Baldfaced propganda is the purpose of this and most of their comments

Read the Auerback column linked by 54anickel. The views he expresses are NOT the wild ramblings of a malcontent or whackjob. These views represent a powerfully growing consensus. One that is not heard much but is very much in play.

A jobs recovery is not in the cards. As good as it gets is perhaps just a bit better than it is now jobs wise and to get that we need more malinvestment, asset inflation and debt growth. There is no political program to address the issues we now face. Well there is one, which is more of the same. Which isn't a policy or an answer but only a means to relieve the symtoms of a growing disease. I say again as I have before, there is no political alternative in play because the only one that will work is one that will cause A LOT of pain. No politician can call for that. In a sense that is why we are here now. Clinton, under Rubin and Greenspan chose this path after all. Bush has only embraced it.

[54anickel]

6. On the blah machine - I was just thinking about that again today as

I read the lastest article regarding Greenspan and his call to import more natural gas. I can't believe that a google news search on Greenspan will turn up a fresh article almost daily, and the topics he touches on are way beyond the realm of the Fed.

[rapier]

7. John Law II

Well Al's ramblings on oil and energy are really weird. All his "new economy" bullshit at least served as an excuse for his policy of encouraging moral hazard in the financial markets.

I wasn't talking about things like his ideas for managing energy markets which is really straying off the monetary policy ranch but rather his more normal blabber about inflation, and the lack of, or deflation. The latter was his fav topic for 18 months as he tried to prevent the only deflation which matters. The deflation of financial and real estate assets.

Al has successfully reinflated the entire world, or at least parts of it. Particularly China's manufacturing and our stocks, bonds and real estate. Some has leaked thru the the real economy too, but not much.

Other members of the Open Mouth Comittee like Bernake, who is featued in the linked article has been very active vocally. He is the next governor possibly I should note.

Al, the Maesstro, the most important man in the world, the real president, pick your nomenclature, has been reading his press clippings much too long.

Al will go down in history as the worst central banker since the first one, John Law. Mark my words.