For the past six months, both positive and negative reports have dotted the economic news, much of it downright contradictory. Most recently, for instance, there was evidence that consumer demand went up, even as consumer confidence went down. Retail sales rose but small business confidence fell. Wholesale inventories declined (a good thing) but freight shipments by rail (already at very low levels compared with 2006) also declined (not a good thing).
And so it goes, month after month, with the general trend upward, but in fits and starts, and not - almost all experts agree - with anything close to the needed robustness that will generate a sustainable recovery as the stimulus from the American Recovery and Reinvestment Act continues to fade away over the next nine months. Nowhere is this more true than when it comes to jobs, which for most Americans is the leading indicator of economic health.
For 11 months, the number of layoffs as reported by the Bureau of Labor Statistics have been dropping. For February, the job loss was still 36,000, and revisions for January and December put the average monthly job loss for the past three months at 57,000. So the bleeding hasn't stopped, but it's a far cry from the 728,000 average monthly job losses for the same three-month period a year ago. If that had continued, the official "U3" unemployment rate would now be 12.7% and instead of 15 million out of work, nearly 20 million would be. Nonetheless, 15 million is still a post-World War II high, and when discouraged workers and the underemployed are counted, the number soars to at least 29 million.
Many indicators point to growth in jobs being just around the corner and probably happening right now. For instance, the Department of Labor reported Monday that job openings rose sharply in January, up 7.6% over, which could be a sign that employers are preparing to hire. In December there were 6 people for every job opening, and now there are only 5.5.
These and other data suggest that the Labor report coming up on April 2 will almost certainly show the first significant gain in jobs since a spike in November, which may have been a fluke related to holiday hiring. The question: Will the April numbers mark the beginning of a long-term surge generating the hundreds of thousands of new jobs needed each month? Who can predict? It could be mid-summer before we have a firm grasp on that. One reason, as pointed out by Calculated Risk earlier this week is Census hiring.
The Census will be taking on some 100,000 temporary workers this month (perhaps as many as 750,000 by the end of May. Most of those jobs will only last for five to 10 weeks. We'll also find out whether there was a "snow effect" in February. Some analysts put that figure as high as 100,000 jobs that would have been generated if not for severe weather. Taking the optimistic approach, add that 100,000 to a potential 100,000 new jobs in March plus 100,000 in Census hiring and the April report could show 300,000 jobs in the positive column. That would compare quite favorably with the Clinton years when the nation averaged 225,000 new jobs a month for eight years. But to sustain itself, a job recovery will depend on more than short-term Census jobs, no matter how welcome they are. And many of those other jobs that may be generated result from government spending that will taper off as the year grows older.
If Keynesian policies adopted by the Obama administration in face of stiff congressional opposition could restore or find substitutes for the 8.4 million lost jobs of the past 26 months and the 125,000 a month needed to keep up with new workers entering the labor force, it would be hallelujah time. But what evidence is there that such a recovery is in the making, even two years down the road? This morning, for instance, the Department of Labor reported that initial claims for jobs benefits remained at a stubbornly high 462,000. The less volatile four-week running average rose to 475,500.
Many of us - left-of-center, left of left-of-center and "far" left - continue to see the fiscal-monetary mix that the administration (and previous administrations) have been promoting for the past three decades as sending the nation toward even bigger economic problems in the future. To counter this will require something stronger than Keynesian medicine - industrial policy, revamped trade policy, a new paradigm around the worship of growth for its own sake, and limits on the oligarchs who have enriched themselves at the expense of the rest of us.
It would be easy to be blinded to these much-needed long-term changes by a month or three of good news on the job front. And no doubt some people will be.