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Thread: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by SlevinKelevra View Post
    from YOUR link, that would be construction.
    Construction is part of the goods producing sector, last time I checked.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by WallStreetVixen View Post
    Construction is part of the goods producing sector, last time I checked.

    I suggest you revisit the indentation in your link

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Visbek View Post
    That's quite a leap of logic, especially in today's economy.

    First, even if the jobs are far from ideal, it's better for 295,000 people to be employed than to collect unemployment, or a type of welfare, or not have an income.

    Second, we aren't in a centrally planned economy. Unless the government engages in an absurdly large stimulus, no one can wave a magic wand and hire people exclusively in high-output sectors. Job openings will be created in the sectors that need to hire more employees.

    Third, it isn't necessarily a bad sign for certain "unproductive" sectors to have job growth. As noted, growth in the hospitality sector means that more people are spending money on things like vacations and dining out. You're far less likely to take the family to Disneyland if you're unemployed, or concerned you will lose your job next week, or already burdened by big consumer debts.

    Fourth, wages are typically based not on productivity or sector output, but on factors like supply, demand, experience, skillset, and relative wages. If you need a high-skilled person to perform an "unproductive" job (e.g. senior hotel manager), the hotel's owner is not going to say "you know, hotels are not as productive for the economy as a whole as mining for coal, so I'm going to pay you less than a coal miner."



    Oh? Are dollars spent on the hospitality industry actually subtracted from GDP, then? Is our economy in deep trouble because we spend billions on movies, vacations, concerts and video games? How curious.

    Why would municipalities do things to increase tourism, if it's the economic equivalent of crack cocaine?

    Was building the High Line in NYC a "net drain" on the NYC economy?

    Production is not an inherent good or a final goal. We do not increase productivity for the sake of increasing productivity because we want to increase productivity. We produce to satisfy demand, and a big surplus of goods doesn't provide much benefit.

    Look at the oil industry. Presumably energy is a value-enhancing sector. However, we're producing so much oil that prices cratered, and storage is becoming an issue -- an issue big enough that a company is starting to trade oil storage futures. We shouldn't produce oil for the sake of producing more oil, but to meet demand.




    Oddly enough, the BLS seems quite content about the hospitality sector as driving job growth during the recession:
    http://www.bls.gov/opub/btn/volume-3...job-growth.htm
    First, the BLS's 'creative math', Birth/Death model accounted for roughly 132,000 of that total. That latter number is NOT part of the business survey, it is a guesstimate from the BLS added on to the final survey number.

    http://www.bls.gov/web/empsit/cesbd.htm


    Second, the Household survey showed only 96,000 more Americans employed. The only reason the unemployment rate went down was because a whopping 354,000 left the labor force.

    http://www.bls.gov/news.release/empsit.a.htm


    Thirdly, the Part time/Full time section shows only 48,000 more Americans working.

    http://www.bls.gov/news.release/empsit.t09.htm


    These are not the signs of healthy employment growth.
    Last edited by DA60; 03-09-15 at 01:00 AM.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Visbek View Post
    That's quite a leap of logic, especially in today's economy.

    First, even if the jobs are far from ideal, it's better for 295,000 people to be employed than to collect unemployment, or a type of welfare, or not have an income.
    There is no indication that the 295,000 new workers are better off than collecting unemployment, because that's actually what they've been doing for months, if not years. Despite a large amount of jobs being vacant in the economy, people refuse to take them. 2013 created less employment than 2012. 2014 rolls along, and not only did it create the most jobs in the entire expansion, but it also created jobs at the fastest rate since the 90s. This is because congress failed to extend unemployment benefits in December 2013. This forced millions of people that were collecting checks to search for work.

    When it comes to this recovery, people would rather be on unemployment than employed at a low wage job. And people would rather have a low wage job than not having anything to fall back on. That's the recovery in a nutshell.

    Second, we aren't in a centrally planned economy. Unless the government engages in an absurdly large stimulus, no one can wave a magic wand and hire people exclusively in high-output sectors. Job openings will be created in the sectors that need to hire more employees.
    That doesn't mean that the Government cannot create an economic environment that encourages economic activity. The current economic activity is fostered by ZIRP (which is stimulus, BTW), which benefits consumers. Consumers then spend in retail and hospitality places. The earnings these firms get creates jobs. Lets say Yellen decides to increase rates tomorrow. All of those low paying jobs would be destroyed. Higher rates discourages consumption and encourages savings. Retail and hospitality sectors need increasing earnings to increase employment.

    Third, it isn't necessarily a bad sign for certain "unproductive" sectors to have job growth.
    If you see an increase of employment in a particular sector, without an increase in productivity, that is considered "unproductive" by definition. The basic idea of productivity is the ability to do more with less. If you increase employment significantly without increasing productivity by the same rate, that increases labour cost. Labour cost grow because wages outpace productivity in any given sector.

    You can have increasing employment or you can have increasing productivity. You can't have both. Maybe sometimes you can. It's rare, but it generally doesn't happen.



    Fourth, wages are typically based not on productivity or sector output, but on factors like supply, demand, experience, skillset, and relative wages. If you need a high-skilled person to perform an "unproductive" job (e.g. senior hotel manager), the hotel's owner is not going to say "you know, hotels are not as productive for the economy as a whole as mining for coal, so I'm going to pay you less than a coal miner."
    That is a dumb argument. You don't need me to tell you that is a dumb argument, because you probably already know that. Yes, the leisure industry is unproductive because most of the jobs in that industry are very low skilled. That DOES NOT change the fact that senior hotel manager isn't going to be paid at the same rate as a maid.

    First of all, hotel managers falls into the BLS employment category known as 'supervisory employees.

    Second, hotel managers are generally highly skilled, well-trained and work long hours. All characteristics of productive employees.

    Aside from the fact that your claims yield little sense, they are highly inaccurate.
    Last edited by WallStreetVixen; 03-09-15 at 01:25 AM.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Visbek View Post
    Oh? Are dollars spent on the hospitality industry actually subtracted from GDP, then? Is our economy in deep trouble because we spend billions on movies, vacations, concerts and video games? How curious.
    It's not in trouble, but it isn't growing because of those things either. Very little revenue streams in the industry is transformed in high output potential. This is why retail industries are generally low margin industries.

    Production is not an inherent good or a final goal. We do not increase productivity for the sake of increasing productivity because we want to increase productivity. We produce to satisfy demand, and a big surplus of goods doesn't provide much benefit.
    I can't tell if you're making an economic argument or what.

    The purpose of increasing productivity is not satisfying demand. You can do that without increasing productivity at all, as I have already shown. The purpose of productivity is to do more with less. To produce more output with the same level of input. Businesses want this not because they want to satisfy demand, because they can make more money. If you require more inputs to produce more outputs, that defeats the purpose. This is really basic, and also the reason why majority of the job creation in the economy are low wage and low productivity jobs.

    Look at the oil industry. Presumably energy is a value-enhancing sector. However, we're producing so much oil that prices cratered, and storage is becoming an issue -- an issue big enough that a company is starting to trade oil storage futures. We shouldn't produce oil for the sake of producing more oil, but to meet demand.
    Production is contributing to the decline. It isn't causing it. Crude production has increased since 2010. The US has been a net exporter of crude and petro based products since 2011. And also crude consumption is the lowest its been since 1998. Oil is a trillion dollar commodity. If it was as simple as meeting demand with supply, oil prices would have plunged years ago. I also don't see what this has to do with productivity.

    United States - U.S. Energy Information Administration (EIA)

    Oddly enough, the BLS seems quite content about the hospitality sector as driving job growth during the recession:
    Most people are impressed by the quantity over quality argument. The rest of us understand that their standard of living is essentially lower as a result.
    Last edited by WallStreetVixen; 03-09-15 at 01:28 AM.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by SlevinKelevra View Post
    I suggest you revisit the indentation in your link
    Okay? What did I miss?


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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by DA60 View Post
    First, the BLS's 'creative math', Birth/Death model accounted for roughly 132,000 of that total. That latter number is NOT part of the business survey, it is a guesstimate from the BLS added on to the final survey number.

    http://www.bls.gov/web/empsit/cesbd.htm


    Second, the Household survey showed only 96,000 more Americans employed. The only reason the unemployment rate went down was because a whopping 354,000 left the labor force.

    http://www.bls.gov/news.release/empsit.a.htm


    Thirdly, the Part time/Full time section shows only 48,000 more Americans working.

    http://www.bls.gov/news.release/empsit.t09.htm


    These are not the signs of healthy employment growth.

    Correction, the Birth Death model is not seasonally adjusted, whereas the other number is.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Visbek View Post
    Does it? Let's think.

    IT is overhead. No one likes paying for overhead. I'm fairly confident companies would prefer to spend as little as they can on IT, and automate as much IT as possible.
    I don't know what you think IT jobs are, but they're system analyst, software programmers and computer programers. You can't really automate those types of jobs. And firms increasingly understand that they need software to handle day to day activities within their business operation. Even low skill sectors like retail rely on the software developed in the IT sector.

    The entire economy is more productive because of information technology, so its really dumb to suggest that the economy would be better off without it.

    Manufacturing employment has been shrinking as a percentage of the US workforce since the 1950s, and is now down to around 10%. It's an industry that is increasingly outsourced and automated. Manufacturers vastly prefer to drive down costs, if they can do so while maintaining or improving quality. And "more manufacturing output" is only truly beneficial if it meets an existing need.
    All you've said was the obvious: manufacturing is outsourced and it is shrinking. That doesn't change the fact that the economy needs more of those jobs. Manufacturing is outsourced because it is too expensive to make manufacture goods and services domestically. More firms would manufacture in the US absent these cost.

    We should also note that manufacturing is, again, a means rather than an ends. If the hotel doesn't have guests, it won't buy those tiny little shampoos, which means the manufacturer won't profit by producing tiny shampoo bottles, which means that company won't order raw supplies from its vendors. See how it all fits together? Or should manufacturers only sell products for uses that enhance productivity?
    No one said that it should so I don't know what purpose this served. The purpose of manufacturing produce goods and services. The economy needs more goods and services. More goods and services increases economic output, and is a benefit to GDP.

    Do we really need to spend more on health care? Seriously?
    Um, yes, because its clearly more valuable than its ever been in the past. Are you also going to ask if we need more doctors and nurses?

    Do we really need more lawyers? Seriously?
    You think having enough people to represent defendants is not an issue? Well, I hope you have money and I hope you don't live in a town like this one...

    8,500 residents. 12 attorneys: America’s rural lawyer shortage - The Washington Post

    Do you want more jobs for bankers, because BofA, Citi and JPM whacked 50,000 employees off the rolls in January? (How many of those jobs were automated out of existence by IT systems?)
    You know that 50,000 employees off the rolls in January claim is inaccurate, right? So I don't undestand why you made it, other than to make me laugh and question your dishonesty. Secondly, majority of the layoffs initiated by these firms were mortgage and auto-related. I can't imagine why no one would need help in those fields...

    On another note, I'm questioning you logic (again). Are you suggesting the fact that three large institutions don't need addition labour, no one else in the industry needs it? You do understand that there are plenty of other banks that are expanding correct? The financial activities sector continues to grow, so employers (as well as the economy) actually does need more bankers, brokers, sales agents, etc. Especially if the economy is going to recovery the jobs lost in the recession.



    Also, you probably don't understand but only menial jobs in the finances industry are outsourced by IT, as well as jobs that has no relation to finance at all. I replaced by secretary with my smartphone, and now she can go do something useful with her life. Bank tellers and consumer service reps might be the most vulnerable to shifts in automation, but even still, you will find a good portion of tellers and reps, simply because 1) some people are not good with machines and 2) there are specific transactions that cannot be authorised to be done by automation, by law.

    This is why, despite the fact that tellers and services reps are generally paid more at starting rates than cashiers and fry cooks, despite not being highly productive as well.

    I heartily agree we need to improve education, and I'm confident that hiring more teachers and paying them more is very likely a component of that. Just for the record, I don't think we should improve education in order to enhance GDP.
    I don't care...
    Last edited by WallStreetVixen; 03-09-15 at 02:47 AM.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by imagep View Post
    Why do you think you should earn anything without doing something of value? It's rediculous to think that you can just save your money in a savings account or in low risk bonds and make a profit over the inflation rate, you should just be thankful that you got 0.99% last year because inflation was only 0.7%. Expecting to get something for doing nothing is the entitlement mentality, and people who have such expectations are just as bad as welfare slackers.

    Long term historically, people never made a profit on low risk savings. Back in the olden days, when people tried to "save" their production, it rotted or was eaten by vermin and thus it lost value over time. Consider yourself fortunate that we live in the day when you can trade your production for the US dollar and put that dollar in a nearly risk free savings account and not lose your savings.

    If you expect higher yields, then you should try INVESTING instead of just savings. Our economy doesn't really need your savings, it's pointless and has no value. The fed can produce unlimited amounts of money out of thin air. What we do need are entrapanures and wise investors - people who will put money to work, instead of sitting in their easy chair expecting their money just to magically grow without risk or personal effort.
    I did something of value. I provided liquid capital to a bank for them invest in other projects. For a guaranteed return, they own the risk and the reward.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by DA60 View Post
    First, the BLS's 'creative math', Birth/Death model accounted for roughly 132,000 of that total. That latter number is NOT part of the business survey, it is a guesstimate from the BLS added on to the final survey number.

    http://www.bls.gov/web/empsit/cesbd.htm
    And? Why do you consider that an issue? Why is it done and is it inaccurate and if so, which way? Before you respond, be aware that the actual changes due to business births and deaths are known from the Quarterly Census of Employment and Wages (up to March 2014) and can be compared to the forecasts used. And note that while espessially for 2009 the birth/death model was way off (overestimated job gains by over 700,000) the methodology has been updated since then.

    Second, the Household survey showed only 96,000 more Americans employed.
    That's 96,000 plus or minus 399,614 (http://www.bls.gov/cps/eetech_methods.pdf using table 1-D, 90% confidence If you can't do the math, I'll walk you through it.)



    The only reason the unemployment rate went down was because a whopping 354,000 left the labor force.

    http://www.bls.gov/news.release/empsit.a.htm
    Except that link shows that the labor force went down 178,000, not 354,000 You didn't even have to do math because it's in the table.
    Last edited by pinqy; 03-09-15 at 10:31 AM.
    Therefore, since the world has still/Much good, but much less good than ill,
    And while the sun and moon endure/Luck's a chance, but trouble's sure,
    I'd face it as a wise man would,/And train for ill and not for good.

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