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

imagep said:
In that sense, I don't think there really is a "profit margin", there is just "value created". Lot's of companies have a huge sales volume, but don't add much value thus they have a very low net profit to sales ratio.

Like someone who deals in gold bullion may have a huge sales volume in terms of dollars, but he may only net $1 per $1200 in sales (less than 1/10th of 1%). Someone else may be a barber, who might net $200 out of $250 in sales resulting in a profit margin of 80%.

Profit margins as a percent of sales don't really define the productivity of a company.

At least that's my take on things.
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I would assume that a 3% profit margin would suggest 97% went into its productivity but a 20% only had 80% in which would suggest item 1 could create 17% more productivity. not sure.
 
imagep said:
I find it very hard to imagine a world without entertainment. I also find entertainment very productive and valuable. Why else do we pay movie stars and professional athletes and top musicians millions of dollars a year? You don't enjoy being able to go to a nice hotel?
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It's not just the entertainment industry or hotels, which is essentially the fast food industry, in addition to the waiters and bartenders. These are the bulk of jobs in this industry. Hollywood is practically a blip on the radar compared to these types of jobs.

I think that we need all the jobs we can get. The more jobs we have, the more wealth we produce, REGARDLESS of the sector.

Can you really make an argument that a dollar spent on good meal at your favorite eatery is any less productive than a dollar spent on a new pair of kicks, or a dollar spent on a tattoo or on some new mag wheels for your pimped up ride?
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Yes, because it's not always about the dollar I spend. The dollar I spend means nothing if that dollar goes to a firm that is not using its productive capacity in an efficient way. Jobs need to be highly productive and create value. If they don't, you'll either see 1) a cut in hours (which is actually occurring in the leisure and hospitality sector) or 2) a reduction in employment. When this happens, it means that employers are wasting resources and need to trim the fat somewhere. The only way to prevent scenario number 2 from happening is for consistently high earnings. This only helps in the short term, because in the long term earnings will fall, due to cyclical reasons, lack of sales or whatever excuse employers will come up with. What do you think will occur once this happens?

Considering this, it's not a good thing to have lots of employment in low productive sector because it doesn't help anyone in the long run.

The most productive dollar spent and the most productive job is in whatever sector there is enough demand to create more jobs and more dollars. Why would we want more jobs in sectors that don't need more workers?

The only sectors that really create lasting value are research and construction. Nothing else does. Do you not value any jobs other than researchers and construction workers?
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There are plenty of jobs besides construction and research that create lasting value. Education, health, finance, information technology, manufacturing, professional/technical services etc etc. The economy increasingly needs more of these jobs.
 
Khayembii Communique said:
Here is the problem with people complaining that the unemployment rate is some kind of "ruse": there is no better way to measure unemployment.

Secondly, LFPR has been flat/decreasing for the past fifteen years. How many of these are people that want to work but can't? None of them. If they wanted to work but couldn't, they would be considered unemployed.
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Well just wait for 2 years. When the GOP is back in the WH, the unemployment rate will be absolute gospel to the same people bitching about it now.
 
Btw, that 295,000 more Americans employed number is NOT just businesses reporting in. A large percentage of it is BLS estimates.

The Birth Death model 'To account for this net birth/death portion of total employment, BLS uses an estimation procedure'.

And, this month, 132,000 of the 295,000 number came from the BLS's Birth Death estimate.

http://www.bls.gov/web/empsit/cesbd.htm
 
WallStreetVixen said:
It's not that simple. The purpose of hiring is to increase productivity. That increases value, which translates into higher wages for the purpose of economic growth and demand. The problem with leisure and hospitality is that it doesn't create much value because it's a highly unproductive sector. And if you're not creating value then you're wasting resources. This becomes a net drain on the economy, because these resources can be used elsewhere in sectors that are productivity, while possibly creating higher paying jobs.

I mean, the leisure and hospitality sector didn't become the lowest output sector by accident. If it wasn't for the goods producing sector of the economy, it would be the sector with the least economic output. As many employment gains as it received since the start of the recovery, it's unacceptable...

http://www.bea.gov/iTable/iTableHtml.cfm?reqid=51&step=51&isuri=1&5114=q&5102=5



Hardly enough to offset the jobs created, which have mostly been low wage jobs.
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Did you intend to post a link that contradicts what you wrote?
 
WallStreetVixen said:
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There are plenty of jobs besides construction and research that create lasting value. Education, health, finance, information technology, manufacturing, professional/technical services etc etc. The economy increasingly needs more of these jobs.
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The only things we create that is of long term lasting value is land improvement and possibly education and research. Everything else is pretty much temporary. We use up what we manufacture.
 
SlevinKelevra said:
Did you intend to post a link that contradicts what you wrote?
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There's no contradiction. You clearly don't understand what you're reading.

Leisure and hospitality in the bls is the same as the arts, entertainment, recreation, accommodation, and food services sector in the bea. That has an output of 3.8% quarter over quarter. The only industry with lower output besides warehousing is the good producing industry, which is mining, manufacturing and argiculture, which an average output of 1%. That is what I said, that is what the data shows, which means everything I said is correct.

Now if you're looking at sub sectors within the industry, which is probably where your confusion lies, that is statistically invalid.

Let me know which part of this you don't undetstand.
 
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WallStreetVixen said:
There's no contradiction. You clearly don't understand what you're reading.

Leisure and hospitality in the bls is the same as the arts, entertainment, recreation, accommodation, and food services sector in the bea. That has an output of 3.8% quarter over quarter. The only industry with lower output besides warehousing is the good producing industry, which is mining, manufacturing and argiculture, which an average output of 1%. That is what I said, that is what the data shows, which means everything I said is correct.

Now if you're looking at sectors and not industries, which is probably where your confusion lies, that is statistically invalid.

Let me know which part of this you don't undetstand.
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ignoring that you don't seem to understand how the Venn space of sector and industry work,

so your argument is that

3.7 > 3.8?
 
SlevinKelevra said:
ignoring that you don't seem to understand how the Venn space of sector and industry work,

so your argument is that

3.7 > 3.8?
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No it isn't, but that's exactly why I'm not wrong.

What sector that isn't part of goods producing that has lower GDP output than leisure and hospitality?
 
Tettsuo said:
Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5% - Bloomberg Business

Chef Obama! LOL!
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Since the liberals have a made it comfortable to ride the entitlement deadbeat-wagon, more Americans are doing just that rather than working,......ie so the jobless rate drops. Do you REALLY think that is a benefit to society? The job participation rate is at a 40 plus year low, it is even worse for women and minorities, food stamps, welfare and all the other entitlements have historical high usage, both in numbers and percentage of population. Is that REALLY progress in the mind of a progressive grubercrat?
 
WallStreetVixen said:
No it isn't, but that's exactly why I'm not wrong.

What sector that isn't part of goods producing that has lower GDP output than leisure and hospitality?
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I really don't know that it matters. Gains in leisure and hospitality were only a percentage of our total job gains, which is exactly what I would expect.

You mentioned manufacturing, among other things, as being more productive. In an age where improvements in technology is replacing the need for manufacturing jobs, we can't really expect manufacturing to be a huge job creator. Even if our manufacturing sector started growing like crazy, job creation in manufacturing is most likely going to lag behind other sectors which are more dependent upon low cost human labor.

The same with finance. Since there is virtually no need for shipping or material handling in finance, and since it is largely a matter of just shuffling numbers, many of it's tasks are very likely to being replaced by automation and computerization.

Any particular sector can grow in size and production, without having huge gains in jobs.
 
imagep said:
...

Any particular sector can grow in size and production, without having huge gains in jobs.
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Regardless, we shouldn't be knocking any job gains in any sector, they are all important, and as I previously mentioned, when entertainment and hospitality gain jobs, that is an indicator that demand is increasing, which is of course a good thing.

I take sort of a libertarian view on this. Job growth will be in what ever sector demand growth is in, and we shouldn't try to manipulate what sectors are growing, the free market does a pretty good job of determining what people desire and how to allocate resources. Trying to change this would only distort our market and result in a mis-allocation of resources which would hold back economic growth.
 
WallStreetVixen said:
That increases value, which translates into higher wages for the purpose of economic growth and demand. The problem with leisure and hospitality is that it doesn't create much value because it's a highly unproductive sector. And if you're not creating value then you're wasting resources.
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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."


This becomes a net drain on the economy, because these resources can be used elsewhere in sectors that are productivity, while possibly creating higher paying jobs.
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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.


The leisure and hospitality sector didn't become the lowest output sector by accident. If it wasn't for the goods producing sector of the economy, it would be the sector with the least economic output. As many employment gains as it received since the start of the recovery, it's unacceptable...
http://www.bea.gov/iTable/iTableHtml.cfm?reqid=51&step=51&isuri=1&5114=q&5102=5
Click to expand...

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/restaurants-help-feed-job-growth.htm
 
WallStreetVixen said:
There are plenty of jobs besides construction and research that create lasting value. Education, health, finance, information technology, manufacturing, professional/technical services etc etc. The economy increasingly needs more of these jobs.
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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.

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.

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? :mrgreen:

Do we really need to spend more on health care? Seriously?

Do we really need more lawyers? Seriously?

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?)

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. ;)
 
American said:
Where were you when Obama increased the welfare rolls? Oh yeah, probably cheering him on.
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:lamo

He had no hand in the much improved U.S. economy, but unilaterally increased the number of people receiving "welfare"! Reconstructing reality to reinforce one's belief system must be a drain. Why not try and think for yourself?
 
Chainsaw said:
Since the liberals have a made it comfortable to ride the entitlement deadbeat-wagon, more Americans are doing just that rather than working,......ie so the jobless rate drops. Do you REALLY think that is a benefit to society? The job participation rate is at a 40 plus year low, it is even worse for women and minorities, food stamps, welfare and all the other entitlements have historical high usage, both in numbers and percentage of population. Is that REALLY progress in the mind of a progressive grubercrat?
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Gratuitous Grubering! Shots for everyone!
 
Kushinator said:
:lamo

He had no hand in the much improved U.S. economy, but unilaterally increased the number of people receiving "welfare"! Reconstructing reality to reinforce one's belief system must be a drain. Why not try and think for yourself?
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You're the one drinking the administration kool-aid.
 
Visbek said:
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/restaurants-help-feed-job-growth.htm
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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.
 
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Visbek said:
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.
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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.
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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.
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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.

Unit-Labor-Cost-and-Fast-Food.png


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."
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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.
 
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Visbek said:
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.
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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.
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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.
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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:
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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.
 
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