Friday, January 07, 2005

JOBS CREATION (Washington Post Edition)

The Post gets it totally wrong in one half of a sentence and gives a mulligan to John Snow in the other half.
This article by Fred Barbash is very generous to the Bush Administration. "The total number of jobs created was 2.2 million for the year, a figure not wildly at odds with Bush administration's predictions that were ridiculed by critics during the presidential campaign. By contrast, in 2003 the economy lost about 61,000 jobs." He goes on to cite two sources of these predictions later in the article. "While 2.2 million jobs was some distance from the 2.6 million predicted at one point by the President's Council of Economic Advisers, it was closer to the 200,000 a month job growth forecast of Treasury Secretary John W. Snow that was ridiculed by critics." As Brad Delong blogged at the time, the 2.6 million prediction by the Council of Economic Advisers was an average growth for the year and would have required that the economy add 320,000 new jobs per month. By that measure, only adding 185,000 per month is a big miss. In the second half of the sentence, the 200,000 jobs per month that Snow predicted came from an interview with the Financial Times in October, 2003 where he predicted job growth from the 3rd quarter to the 3rd quarter. If we use that standard (Snow's own words) then the growth was only 150,000 per month which I believe is a big enough miss to not be giving credit to anyone for their predictive powers as some quoted economists do later in the article. Only if you measure 4th quarter to 4th quarter (and forget about 3rd quarter 2003) is the gist of the article even remotely accurate. Even if we measure the entire 15 month period then job growth was only 2.4 million jobs or about 160,000 per month. This is still not close enough to 200,000 for me to be pinning any medals on Snow's chest as Mr. Barbash appears to want to do.

Update: The article by Barbash is gone. I guess somebody besides me didn't like it. It's replaced with a more balanced article (same link) that discusses the economic issues and only briefly touches on politics.


Monday, January 03, 2005


One resolution is to blog more this year.

Last year's New Year's post doesn't need much change.

1.Unemployment has dropped, but real wages remain stagnant or falling. Payroll numbers have not gone up very much and it's a mystery as to why so many have dropped out of the labor force. GDP appears to continue to grow at a 3-4% rate without producing new jobs.

2. The federal deficit was 412 billion this year. It can't go on, but when will it stop? What crazy thing will the Bush administration propose for social security so that the Republicans can try to avoid responsibility for this debacle? Those surplusses make the situation appear better than it actually is (and appearances are pretty bad).

3. I could have made some good money on Euro futures in 2004 and it's not clear that the slide is over. When the Chinese will revalue is anybody's guess and why they haven't yet is another mystery. It probably has something to do with the huge amounts of dollars they are holding.


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