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Old 01-09-2004, 10:11 PM   #1
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Payrolls Barely Rise in Weak Jobs Report

For those who bet on employment statistics, don't believe everything you see:

Payrolls Barely Rise in Weak Jobs Report

Fri Jan 9, 5:07 PM ET

By Anna Willard

WASHINGTON (Reuters) - U.S. employers hardly hired any new workers in December, the government said on Friday in a disappointing report showing economic recovery has yet to translate into sustained jobs growth.

The unemployment rate fell to 5.7 percent, the lowest in over a year and down from 5.9 percent in November. But this was mainly because 309,000 people dropped out of the work force.

The number of workers on U.S. payrolls outside the farm sector in December increased by just 1,000, after a downwardly revised rise of 43,000 in November. It was the fifth consecutive monthly climb but was far below economist expectations for a rise of 130,000.

The poor report is a headache for President Bush (news - web sites) as he seeks re-election in November with the economy -- specifically job creation -- expected to be a key issue in the campaign.

But Bush, speaking to a small business forum, was upbeat, saying all economic signs were "very strong." He said the drop in the jobless rate was a "positive sign" of an improving economy.

Economists disagreed.

"It's a shocker. The one ray of sunshine, the decline in the unemployment rate, is ironically a sign of weakness," said Cary Leahey, senior U.S. economist, Deutsche Bank Securities, New York.

"The only reason it declined is that fewer people were looking for jobs in December."

Since Bush took office, more than 2.3 million nonfarm jobs have been lost.


Pollster John Zogby said his surveys still show 21 percent of people, and 25 percent of those earning over $75,000, are afraid of losing their jobs in the next year.

Democrats seized the opportunity to criticize Bush's record on the economy.

"I think it's time that George W. Bush loses his job so that we can put the American people back to work," said Democratic presidential hopeful Wesley Clark (news - web sites).

The dollar and stock markets fell, while the expectation of continued low interest rates caused U.S. Treasury bond prices to rise after the report. The Dow Jones industrial average ended the day down 133.55 points at 10,458.89. The dollar tumbled to a fresh low against the euro and benchmark Treasury yields, which move inversely to prices, posted their largest drop in more than two years.

The data reinforced expectations the U.S. Federal Reserve (news - web sites) will keep interest rates on hold at 45-year lows at its next policy meeting on Jan. 27-28, and for some time after that.

"The good news is that there is absolutely no pressure on the Fed to raise rates any time in the foreseeable future," said Edgar Peters, chief investment officer, Panagora Asset Management Inc.

JOB-SEEKERS DISCOURAGED

The Labor Department (news - web sites) said there were 433,000 "discouraged" workers in December who were not looking for work because they believed no jobs were available, up from 403,000 a year ago. The jobless rate had been forecast to hold steady at 5.9 percent.

Economists had been expecting a more robust rise in payrolls, encouraged by a reasonable holiday shopping season and a drop in filings for jobless benefits in December.

However, the report showed retailers cut payrolls by 38,000, which the department said was caused by general merchandise stores taking on fewer workers than usual.

The troubled manufacturing sector failed to break its job-cutting trend, shedding 26,000 jobs in December, the 41st month of declines. Some economists, pointing to recent data suggesting a turnaround in manufacturing, had predicted factories would finally take on new workers in December.

In another bad sign for job seekers, the number of hours worked per week dropped to 33.7 from 33.9 in November. The average workweek had been expected to climb to 34.0 hours. Employers often increase the amount of hours worked by existing workers before taking on new hires.

Economists say productivity gains have helped speed up economic growth but allow companies to raise output without creating new jobs.

One bright spot in the report was hiring in construction, which was up 14,000. The building industry has boomed as low mortgage rates have fueled home buying.
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Old 01-10-2004, 11:42 AM   #2
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When people such as Bush (or here at home the now ousted controversial Premier of Ontario, Mike Harris) are in power- the rich get richer, the poor get poorer, and in this polarization the middle class begins to disappear.
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Old 01-10-2004, 05:41 PM   #3
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oh what a nightmare if we have to deal with 4 more years of this man.
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Old 01-10-2004, 06:08 PM   #4
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It will only be a nightmare for the liberal wing of the democratic party.

The fact is that most Americans approve of the Job Bush is doing. Most Economist predict the US Economy will grow by a strong 4% in 2004. As the economy continues to grow, business's will start to rehire workers. Eventually it will become an economic necessity for them to do so, provided that the steady and strong GDP growth of the past year continues.
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Old 01-12-2004, 05:32 PM   #5
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its a nightmare for the families of men and women dying every day in iraq and the forgotten afghanistan, its not a nightmare to those drinking water with arsenic in it, its a nightmare for those of us who have to worry about not having social security and paying off the debt that our parents generation has created. i could go on and on but i'll stop there.
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Old 01-12-2004, 07:15 PM   #6
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mmm....aragorn. oh sorry.

sting -- economists predicted that the Bush tax cut would create 900,000 jobs by this point. Instead, only 278,000 have been created. Included in the data on Friday was the fact that only 1,000 jobs were created in December. 1,000! When it comes down to the election, people are going to care more about the fact that they can't find a job than they are going to care about the stock market rising or the overall economy is rising. At this point, the economic growth isn't creating jobs.

Not to mention that there will be less international investment in the US due to the extremely weak dollar. The economy may be rising but there is no foundation to support it because of the HUGE deficit Bush has run up and the increase in jobs OUTSIDE of the US.
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Old 01-12-2004, 09:22 PM   #7
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sharky,

"sting -- economists predicted that the Bush tax cut would create 900,000 jobs by this point. Instead, only 278,000 have been created. Included in the data on Friday was the fact that only 1,000 jobs were created in December. 1,000! When it comes down to the election, people are going to care more about the fact that they can't find a job than they are going to care about the stock market rising or the overall economy is rising. At this point, the economic growth isn't creating jobs."

Can you provide me some documentation that the Bush Tax cut in 2003 was supposed to create 900,000 jobs by January 2004?

Certainly there are a number of people who can't find a job at the moment, but they are vastly outnumbered by the people who have jobs and or approve of the way Bush is doing his job. Bush's Job Aproval rating is currently close to 60%.

New economic growth takes time, usually around a year to start to create serious job growth. Another 6 months of strong GDP Growth will produce the Job growth everyone is looking for. Provided continued strong growth over the next 6 months, July will be the start of a stronger increase in Job creation as business expands and becomes more confident. While the Bush administration has had strong GDP growth for over 6 months now and should have it for the rest of 2004, serious job creation will probably not start until July. Bush will have four months of it prior to the November election. Based on the current situation where Bush beats Dean in every poll, Bush will handedly defeat Dean in November.

If the Democrats really wanted to have a shot at winning, they needed to be ahead in the polls at this point. Barring some major setback for Bush in the next 10 months, he will be elected as President of the United States for another four
years.


"Not to mention that there will be less international investment in the US due to the extremely weak dollar. The economy may be rising but there is no foundation to support it because of the HUGE deficit Bush has run up and the increase in jobs OUTSIDE of the US."

Ahhhh, but what you do not account for is that the WEAK Dollar means that US goods and services are comparitively cheaper than similar goods and services in other industrialized countries. People outside the USA purchase nearly a trillion dollars worth of US goods and services every year. A weak dollar makes such goods cheaper which will lead to an increase in US exports of goods and services to other countries. Increasing exports leads to job creation here in the USA.

A weak dollar will actually help create more jobs because of the increase in Exports. Tourism will also increase because Europeans, Australians and Japanese, will find such trips to be cheaper than before.
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Old 01-13-2004, 02:31 AM   #8
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But sting all the US has been exporting is their jobs. Jobs that are going to countries that offer cheaper labor, and the Bush admin is doing nothing for it.

Why is that Wal-mart imported 12 billion dollars worth of goods into the US last year? Because the Bush admin is to chicken shit to stand up to companies that live off the backs of cheap labor and sweat shops. Why dont they introduce reforms for companies working within the US to be buying more domestic goods? Because they are suck the corprate **** and dont want to lose their support within the super rich communities!

The US dollar is falling, fast! But what you dont state is that it costs American companies much more to import OIL from places like Canada.

I am all for the American economy to be stronger as it equals better economies in my country but it wont be done if there are no middle class anymore, and thats what is happening. These big companies are stomping ont he average person for profits, with no desent from the White House.

Dick Gepherdt is one person that actually supports the working class as he supports workers rights through unions. Unions at are all time lows, because of the lack of care and attention from politicans like Bush!
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Old 01-13-2004, 06:46 PM   #9
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sting-- the problem with cheaper american goods overseas is that there is then less profit to be had. less net profit means less investing back in the US for things like plants and jobs.

as for evidence of the numbers, from the WSJ:

Pity the poor Wall Street economist.

Big staffs, sophisticated models, reams of historical data, degrees from schools known by merely the name of the biggest benefactor (thank you, Messrs. Wharton and Tuck), and still they forecast about as well as groundhogs.

The Wall Street consensus utterly blew the latest employment report, forecasting a strong gain in jobs for December and whispering that the report could show an even bigger gain. Instead, merely 1,000 people were added to nonfarm payrolls in December, a major disappointment. Moreover, November and October figures were revised downward. When the economy runs at roughly a 6% rate, as it did in the second half of last year, typically payrolls rise by 300,000 to 400,000 a month. This time, the figure has been about 37,000.

------------

The payroll gain of 1,000 jobs is "quite shocking. … I would certainly have not expected anything resembling that."
-- Bill Cheney, chief economist, John Hancock Financial Services
* * *
The minuscule payroll gain "calls into question a strong recovery in the labor market" despite the drop in the jobless rate.
-- Bill Quan, economist, Mizuho Securities
* * *
"Over the next few months, all the signs are that payroll employment will rise dramatically." But this report "does not help the cause of a May tightening" of the Fed's monetary policy.
-- Ian Shepherdson, chief U.S. economist, High Frequency Economics
* * *
"Even the positive signal from additional [temporary-worker] hiring is offset by a shorter workweek. The [Fed] will not begin to raise interest rates until substantial job creation returns regardless of how strong economic growth is."
-- Steven Wood, chief market economist, Insight Economics
* * *
"The continued softness in employment suggests productivity growth remains very strong, supporting profits … and GDP growth. For a market keen to gauge when the Fed may begin to tighten, today's disappointment should push expectations of the first move later in 2004."
-- Daragh Maher, economist, ING Capital Markets
* * *
"Overall, a weak report across the board despite the drop in the unemployment rate. When coupled with upcoming inflation data that is likely to drop further, this must have the Fed somewhat worried. All this suggests that there will be no Fed hikes whatsoever in 2004."
-- Ian Morris, chief economist, HSBC
* * *
"We're at least about three to four million jobs below where we should be."
-- James Glassman, economist, J.P. Morgan
* * *
"We don't have evidence of solid job creation, and that must be factored into economic and financial projections for the rest of the year."
-- William Sullivan, senior economist, Morgan Stanley
* * *
"Disappointing employment implies more productivity rather than lower [gross domestic product] for late 2003. Signs of a significant employment turn, including weekly claims and business surveys, imply a pickup in early 2004. We do not alter our U.S. expectations for 2004. Lack of employment in this report only highlights the ongoing employment risk."
-- Stephen Gallagher, chief U.S. economist, SG Corporate & Investment Banking
* * *
"Neither business nor potential employees have confidence in the economy. … Hopefully, employment gains will be much healthier during the second half of the year. By then this recovery will be three years old, persuading businesses to start hiring more people."
-- Sung Won Sohn, chief economic officer, Wells Fargo Bank
-----------------------

The U.S. jobless rate fell to a 14-month low in December, but for all the wrong reasons.

The Labor Department reported the unemployment rate fell to 5.7%, its lowest level since October 2002. But the decline wasn't the result of a surge in new hiring, as many economists had expected. Instead, it occurred because the labor force itself contracted as thousands of potential workers stopped looking for jobs and effectively stopped being counted as unemployed.

The development points to a puzzling trend in the U.S. job market: More than two years into a recovery that many economists believe has accelerated in recent months, workers still are leaving the labor force. "Job creation has stalled," said David Autor, a labor-market economist with Massachusetts Institute of Technology, Cambridge, Mass. "People respond to that by leaving the labor force."

The employment report also showed that nonfarm businesses added just 1,000 new jobs on a seasonally adjusted basis, a statistically insignificant change in a nation with more than 130 million payroll jobs. The tiny increase, combined with downward revisions to estimates for job growth in October and November, came as a big surprise to economists. They had been watching a wide range of other indicators of an improving economy and predicting that payrolls would rise by 150,000 in December and by similar amounts in the months ahead. "I was totally wrong," said John Silvia, chief economist with Wachovia Securities in Charlotte, North Carolina. "We're getting tons of [economic growth] but we're not getting the jobs associated with it."

---------------------
http://www.msnbc.msn.com/id/3918633/

Critics of Bush’s economic policy, including his Democratic rivals for the presidency, were quick to pounce on the report as evidence that last year’s huge tax cut package had failed to achieve the White House’s stated goals for job growth, which called for 510,000 new jobs in 2003. The economy has lost 2.3 million jobs over the past three years including 74,000 jobs last year.


note: I will conceed that the story I saw the numbers -- NBC Nightly News -- does not have the story online.
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Old 01-13-2004, 07:38 PM   #10
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Sharky,

I was looking for a source to support your report that 900,000 Americans were to be hired back by January 2004 because of the Bush Tax cut. I did not see it. When an economy is coming out of slow growth or recession, it takes anywhere from 1 to 2 years of strong consistent GDP growth before one starts to see companies start to hire back workers. Thats what happened with the 1990-1991 recession, and this will be no different.


"sting-- the problem with cheaper american goods overseas is that there is then less profit to be had. less net profit means less investing back in the US for things like plants and jobs."

This is incorrect! The goods are cheaper only to NON-AMERICANS. American products have not been reduced in price nor has the income that Americans receive from the sale of such products overseas been reduced. What has happened is that foreign currency is worth more and there for foreigners can buy more American goods than French or German goods.

French, Germans and Irish will be buying American goods now rather than their own countries goods because FOR THEM, the goods are cheaper. Americans will be still selling these goods at the same price and receiving the same amount of money. The factor for AMERICANS will be that they can now sell a lot more goods and make a much larger profit in addition to stealing market share from products and services produced by Europeans. While American products sell like hotcakes, French, German, and British products will be more likely to sit on the shelf.
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Old 01-13-2004, 08:12 PM   #11
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bonoman,

"But sting all the US has been exporting is their jobs. Jobs that are going to countries that offer cheaper labor, and the Bush admin is doing nothing for it."

The United States believes in Global Free trade and hopefully that will continue. The USA exports nearly 1 Trillion dollars of goods and services every year. If a private company wants to take a chance and move to a third world country for cheap labor, its their right.

The USA has one of the lowest unemployment rates in the world and currently has the 7th highest standard of living in the world.

It is true that foreign oil becomes more expensive as the US dollar decreases in value, but that also means that domesticly produced oil becomes comparitively cheaper as well. Both US and foreign companies are likely to increase their purchase of US domestically produced oil. So, Canadian Oil companies are the ones that are really hurt by the depreciation of the US dollar. A weak dollar means Americans are more likely to buy American.
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Old 01-13-2004, 11:07 PM   #12
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ok, so let me get this straight, you support the transfering of well paying American or Canadian jobs to thrid world countries, in which they pay them EXTREMELY lower wages (or what i consider slave wages)?

For me to discuss this any further I am very intrested in what you do for a living? I'm not going to attack you but i just want to see where you are coming from.
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Old 01-14-2004, 01:28 AM   #13
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If you believe in the private sector, Globalism, Free Trade, then I don't think that you will look at Company A started in America and tell the people in that company that they cannot not leave the borders of the USA to expand their business.

If American individuals can leave the country and go make money and live and work in other countries, why can't they take their business or company with them?

"ok, so let me get this straight, you support the transfering of well paying American or Canadian jobs to thrid world countries, in which they pay them EXTREMELY lower wages (or what i consider slave wages)?"

Should I infur that you support preventing the employment of people in other countries (who have no income and live in absolute poverty) by American companies?
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Old 01-14-2004, 04:11 AM   #14
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Ya i infur that we should never help the third world countries, give me a break!

Take a company like Wal mart for example. They are lowering wages in Canada and the US with no moral sense. They are robbing people of their livelyhood. They are after only one thing and that is profits. That is whats wrong with the world and free trade, to some extent. If you seem so concerned about people in thrid world countries then why do you support companies paying them a tenth of the money they would pay a American? When Home Depot employees 80% of their staff as part-time to avoid paying benefits then there is a problem. When compnaies like Enron and Worldcom are doctoring their finacials to apess the investors (you and me) at the risk of jail time their is something wrong. It doesnt only have to do with free trade it has to do with the concience of the corparte world and we are the ones that are feeding that fire. We demand the profits to be bigger and the dividents to be larger. Its a fundemental issue that must be addressed through our gov'ts, without their help our countries and world are going to be run by big business.

Free trade works, but only if it is monitored. People will do whatever they can know a days to make more so strict measures must be taken to have competition that is able to compete.

When a company like Walmart is as big as it is, because of their low wages and barely there benefits, it is a problem. When they can enter into any segements of the market place and wipe out the competition because of their vast amount of money to under cut costs then it is a problem.

When companies are driving more and more people into jobs that pay below poverty then it becomes a problem.

Put yourself in a employee shoes of one of these companies. Ask yourself can you survive on 7 dollars and hour with two kids? I didnt think so, but your so concerned about free trade and completely open borders you dont relize it.

You never answered my question about what you do to earn a living, i assume, even though i dont like to, that you make a comfortable living. You obviously can afford a computer and internet. Peg yourself at 40 getting paid 10 dollars and hour because every year the company you work for tells you they wont give you the promotion or give you full time hours or the benefits that you and your children have been recieving are no longer at your disposal. Maybe your tune would change.
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Old 01-14-2004, 07:26 PM   #15
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bonoman,

I certainly do have a problem when companies like Enron and Worldcom break the law. I don't have a problem with a company seeking to make profits. The goal of business is profit. There are four guys named Bono, The Edge, Larry and Adam, and they make huge profits compared to most people who work at Walmart. Is that a crime? I don't think so.

As long as Wal mart pays at least minimum wage and does not break the law, I don't see anything wrong. A person does not have to work at Wal mart if they don't like the pay and benefits structure. Wal mart is a private business, not job security program for Canadians and Americans.

I do feel that the current American minimum wage should be increased, although such an increase will temporarily lead to more unemployment. I do feel that the US government should be a little more active in breaking up monopolies as they occur.

But the Free market and free trade system that the USA currently has produced a standard of living for Americans that is 7th in the world according to the extensively researched 2003 figures from the UNDP.

US unemployment and inflation rate is low compared with most other time periods in history and compared to most other countries on the planet.

"When a company like Walmart is as big as it is, because of their low wages and barely there benefits, it is a problem. When they can enter into any segements of the market place and wipe out the competition because of their vast amount of money to under cut costs then it is a problem."

Ever hear of K-Mart where U2 launched their POPMART tour? Ever hear of Woolworths, Walgreens or Target? Wal mart is far from having some invincible monopoly.

Walmart is a private Company! It is up to their leaders to decide how best to spend the companies revenue. No individual has to work for Wal mart and its not as if they are not aware of the pay and benefits provided by Wal mart prior to getting a job there.

"Put yourself in a employee shoes of one of these companies. Ask yourself can you survive on 7 dollars and hour with two kids? I didnt think so, but your so concerned about free trade and completely open borders you dont relize it."

First, in my opinion, I don't think it is wise to be starting a family if one is only making 7 dollars an hour. One should not start a family until they have built up a sound financial base and experience and skills in order to compete in an ever changing job market.

There is no law which says Wal Mart must pay a minimum individual wage high enough to support a family of 4, 5 or 6. It is only required to pay the national minimum wage, and often many starting positions will being paying more than that anyway.

If you discover the company you work for or want to work for does not offer you the things you want, find work with someone else. Before you start a family, make sure your financially secure, and have the flexibility to move and compete in the job market.
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