ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Are we seeing US Job Growth Accelerating?

Updated on June 8, 2012

Comparing the Bush and Obama Job Growth Rates

Assessing the road to recovery using the US unemployment statistics


Assessing the road to recovery using the US unemployment statistics

Currently the unemployment rate is hovering at 8.1% but there are some surveys which anticipate that the rate of recovery is going to accelerate in 2013. It is anticipated that monthly job growth will average at about 200,000 in the coming financial year according to the National Association for Business Economics. [1]They also forecast a final unemployment of 7.5% by the end of 2013.

For some people this reading by 54 economists is too optimistic. The GOP political platform has been dominated by forecasts of doom and gloom. They believe that there are rich electoral pickings if they can depict the Obama Administration as being inept at managing the economy. Foreign policy has largely evened out thanks to a series of stunning victories by the current White House in Pakistan and Iraq in terms of fighting the ‘War on Terror’.

A realistic reading of the economic indicators

Early this year job creation surged on the back of seasonal hiring but that optimism has largely evened out. The economy is not dying but at the same time it is not performing feats of recovery and many people on the breadline are impatient for results. The administration is on the defensive because of an inexplicable inability to lucidly present a Liberal economic strategy.

Trickle-down economics is the default strategy of the Republicans and they are very skillful at articulating the benefits of deep spending cuts as well as tax reductions across the board. It is an attractive proposition for a population that has been conditioned to believe that unfettered capitalism is the main reason for the success of the USA. For example the Scandinavian Social Model is dismissed as a relic of ‘equal distribution’ socialism.

Meanwhile business leaders in the USA are looking for solutions and optimism. Shawn DuBravac of NABE is of the view that "Economists continue to see things pick up, even if it's just slightly from pretty low levels”. [1]The danger is that the optimism may be misplaced and that can cloud the real business of dealing with the crisis that has been strangling American innovation.

A snapshot of the employment sector in the USA

According to the survey which was carried out between the 19th of April and the 2nd of May 2012, nonfarm payroll increases were averaging at 188,000 each month this year. This indicates that by the 4th quarter the unemployment number will be 8.0%. This is the magic number which President Barack Obama needs in order to boost his economic credentials in the election campaign.

That is why some Conservatives are not convinced by the improving economic outlook. They are now changing the goalposts and would like a discussion about the falling participation rate. It is true that many people are simply running out of their benefit entitlement and therefore projecting an overly optimistic trend of falling unemployment figures. Likewise the participation rate is an important indicator. However the changing of goalposts is political posturing.

Although job growth was about 254,000 per month between December and February, it had gone down to an average of 134,500 in the past few months. Weather-sensitive sectors of the economy benefitted from a warm winter. Since August the unemployment rate has fallen from 9.1% to 8.1%. All these are encouraging indicators but they do not confirm that the USA is out of the woods yet.

The view from an industry expert

An interview given by Nouriel Roubini is far more pessimistic about the prospects of the economy: “There is a double-dip recession in the United Kingdom, sluggish growth in Japan, and the data from many emerging markets are also suggesting a slowdown in China, Russia, Brazil, India and places like Turkey, Mexico and South Africa”. [2]In a global economy that could spell disaster for the USA.

Nouriel Roubini believes that the ‘anemic’ job growth in the USA is partly attributable to the complex process of de-leveraging which needs to be done to the public sector. The fiscal cliff may be near: “Many things are expiring at year end. All the tax cuts on income, on dividends, on capital gains, on estates…There is the expiration of infrastructure spending, and then there are the automatic cuts on discretionary spending”. The spending cuts may end up causing more problems than solutions.

How can developed economies like the USA cope?

The key is manufacturing. If China continues to make cheap things then there is very little chance that the long term prosperity of the Western economies is going to be sustained. The financial sector is a very volatile sector and the crash has already shown countries like the UK to be very vulnerable. Greece is paying the price of borrowing without a sound capital base.

The challenge for the individual and the state is to start making valuable things again. Some people have suggested selling off oil reserves but that is a short term and potentially destructive solution. It is all about countries like the USA finding their manufacturing footing once more so that they can compete effectively on a global scale.

Resources:

  1. L. Mutikani,” US job growth seen accelerating this year, 2013-NABE”, 21st May 2012, Reuters
  2. M. Bartiromo, “Economist Nouriel Roubini predicts trouble ahead for economy”, 20th May 2012, USA Today
  3. The author recommends that you read about the Samsung Chromebook Series 5 550 and the Bike to Work Day

Insourcing American Jobs Forum

The Real Unemployment Figures

Do you trust the government unemployment statistics?

See results

Comments

    0 of 8192 characters used
    Post Comment

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Very well written and informative, Johnkadu. Have you compared employment recovery periods with historical ones? Also, I am looking forward to a non-American's take on what is happening here.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks for the comment. I have just been following a hub that looks at the unemployment statistics from 1945 to 2008 to assess who is better at dealing with job growth. I will certainly explore the historical issues a bit more. Thanks for reading the post

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      I intend to now consider the historical context of unemployment as I follow various hubs. However I happen to disagree with the notion that George Bush is the devil incarnate. He made many mistakes but so have other Presidents. It is just a case of trying to please everyone and pleasing no one. In fact reading about his history shows me that his personal kindness is very similar to that of Mary I of England. Both were eventually hounded out of office and no rumor was too vile to spread about them. Thanks for the post.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Your welcome. Although I will poke fun at him, heck, I am find places to do the same with Obama,I always thought Bush a good man at heart; it was just his philosophy isn't good for America. He prooved himself a great leader, however, when, in October 2008, he tossed his deeply held principles aside temporarily, listened to his very conservative economic advisors Paulson and Bernanke, who had shed theirs for the moment also, and pushed for TARP which was the first step in stopping the world fromo falling into what would have probably become the worst depression in history.

      If your interested, I just posted a petition at a White House "We The People" site asking them to do a formal study of the effect of the two economic systems. It would be similar to my hub "A Short History on Panics, Depressions, ....". If you are interested, you can get to it via my hub "Petitioning the White House - We The People"

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      It is always good to poke fun at politicians from time to time. They often take themselves far too seriously. I am glad that you are an equal opportunist satirist.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks for the info. I have visited the petition but I am not entirely sure whether the government will listen to the people. Often they simply ignore them and hope that they will have forgotten everything by the next election cycle.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Take a look at the responses the White House has given to some of those that made the threshhold, see if you find them worthwhile or not.

    • pedrn44 profile image

      pedrn44 4 years ago from New Berlin Wisconsin

      Very interesting hub, Johnkadu. I have been part of our unemployment problem as well as the devastating devaluation of our homes. The "American Dream" has quickly turned into a nightmare. With the election coming up I feel there are lots of false promises being made (of course, that seems to be the usual). President Obama inherited our faltering economy when he was elected and I can't say I blame him for the lack of recovery. I will read the White House petition with interest. Thanks for sharing.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      You hear a lot about "false promises". I wonder if the term shouldn't be something like "blocked promises"? If Obama had had a minority party who had not made it their "sole" legislative agenda to make him a one-term President, that he would have been able to keep a lot more of those promises?

      I don't let Obama entirely off the hook either. He wasted entirely too much time screwing around with the Democratic Congress in getting Obamacare passed; that was embarassing and politically very damaging. It left way too many things on his agenda to be fought when they lost the super-majority.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      If you reach out too hard to the other side you end up falling right into their mind games. That has been the problem for obama and he really needs to get his act together or else they will have him for dinner. We already see that Romney is not afraid to tell a lie or two if it helps him become President.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      I got so irritated when Obama attempted to be a Republican in the spirit of Bipartisanship. As a consequence the Liberal vote was depressed and he was thumped in 2010. He is not a Republican and they will never appreciate anything he does. It is important that the American public is given a choice rather than career politicians who will say anything to get elected.

    • PurvisBobbi44 profile image

      PurvisBobbi44 4 years ago from Florida

      Johnkadu123,

      Globalization, outsourcing started with the approval of our government who had this asinine idea years ago. Greedy American companies took American jobs overseas for cheap labor, therefore, eliminating American jobs, causing unemployment, foreclosures, bankruptcy, resulting in homeless families, as America become an unstable society.

      Therefore, the middle class slowly disappeared and our nation becomes a have and a has not society. Over 12 million Americans are still unemployed, and the greedy American companies do not want to hire the unemployed---they want to hired people who are already employed.

      Your Hub Friend,

      Bobbi Purvis

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      I could not agree more. I wonder why they actually decided to ship jobs out in the first place. It sometimes seems that there are people who are actively working towards the downfall of their own country. Shame.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks all for the contributions.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks for the comment Bobbi Purvis. I could not agree more. The middle class is the bedrock of any developed country. It is therefore outrageous that it is being systematically destroyed by the same people who are unwilling to pay their fair share of taxes. Go figure.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      Every so often I need to baseline myself, and given the rhetoric in this hub, most of which I agree with, I thought I would re-research some things about unemployment and briefly do it here, since I have an attentive audience.

      - The worst rate, which includes involuntarty part-time workers is currently 14.9% from a high of 17.2% in 10/11: normal is 8.5 - 10% (this is the number conservatives throw around most)

      - The next worst rate, which drops the part-time but keeps those who quit looking but would work if they could is currently 9.7% down from 11.3%in 11/11: normal is 5.5 - 7% (this is the number conservatives mean to throw around but grab the wrong one.)

      - Next comes the set that includes those who are not looking for work but gave a "job-related" reason for not looking (discouraged workers) and it is currently at 8.7%, down from 10.5% in 4/10; normal is 4.5 - 6%

      - The official unemployment rate is 8.2%, down from 10% in 10/09; normal is 4.5 - 5.5%. (more in a second)

      - Another figure is the percent of those looking for work 15 weeks or longer, it is 4.6%, down from 5.9% in 4/10; norman is 1 - 2%.

      I say 4.5 to 5.5% unemployment, the official way of measuring it, is normal for a standard economy is because any sustained period that is less than that generally drives up inflation. It is impossible to get to 0% unemployment, of course, because you always have people quiting, getting fired or laid off, companies going BK, etc.

      I think an important measure is a ratio between the first and second numbers listed above for it highlights part-time unemployment, a very incideous problem because it is hidden. I would have to play with it awhile but I bet a pretty useful index could be produced from the official unemployment rate, the total unemployed, plus all marginally attached workers plus total employed part time for economic reasons; and the total unemployed, plus all marginally attached workers

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks for the exceptional commentary My Esoteric. The president should have you on the side to help him with his debates. I get so irritated when conservatives select the figures that make the president bad but ignore everything else. However I think it is great to be able to dig beneath the fluff and let the public know what their situation is even if it is dire!!!

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      My Esoteric...What can I say? You are good...really good. Reading your comments I sometimes feel ashamed of my own hubs (in a good way) because your commentary is so well informed. Perhaps one day I will be able to write half as well as you do.

    • My Esoteric profile image

      My Esoteric 4 years ago from Keystone Heights, FL

      I appreciate your kudos, John, I really do, but, you should never be ashamed, even in a good way of your hubs, for they are an inspiration. For example, the unemployment chart in this hub has made its way into my own hubs and is making its way, I hope, into a Coffee Party newsletter I hope they will publish. It is part of a series I am writing directed at the Obama and Democratic campaigns on changing their media attacks.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      I look forward to reading the Coffee Party (an Ironic name in the circumstances) newsletter.

    • Johnkadu123 profile image
      Author

      Johnkadu123 4 years ago from Toronto, Canada

      Thanks for the comment and reference. When the Coffee Party Newsletter comes out, I would be grateful if you could drop me a link. I like that name very much.

    Click to Rate This Article