April Jobs Report Disappointing To Say The Least

Once again, the jobs market appears to be slowing.

As I noted earlier this week, there were already signs that the April jobs report wasn’t going to fall into line with the rather optimistic numbers we’d seen from November through February. Many had hoped that the disappointing numbers we’d seen in March were an anomaly and that we’d return to something more along the lines of what we saw in February. Going into this morning’s report, analysts expected that we’d see something in the range of 166,000 jobs added, not great but at least it would have been something. As it turns out, though, the pessimists were correct:

The United States had another month of disappointing job growth in April, the Labor Department said Friday.

The nation’s employers added 115,000 positions on net, after adding 154,000 in March. April’s job growth was less than what economists had been predicting. The unemployment rate ticked down to 8.1 percent in April, from 8.2 percent, but that was because workers dropped out of the labor force.

The share of working-age Americans who are in the labor force, either by working or actively looking for a job, is now at its lowest level since 1981 — when far fewer women were doing paid work.

“It’s a pretty sluggish report over all,” said Andrew Tilton, a senior economist at Goldman Sachs, noting that economists had expected more younger workers to join the labor force as the economy improved. “There were a lot of younger people who had gone back to school to get more education and training, and we thought we’d see more of them joining the work force now. May, June and July — the months when people are typically coming out of schooling — will be the big test.”

The report contained other discouraging news; the average workweek, for example, remained unchanged at 34.5 hours.

Government job losses totaling 15,000 continued to weigh on the economy, tugging down job growth as state and local governments grapple with strained budgets. Private companies added 130,000 jobs, with professional and business services, retail trade, and health care doing the most hiring.

Such job growth is not nearly fast enough to recover the losses from the Great Recession and its aftermath. Today the United States economy is producing even more goods and services than it did when the recession officially began in December 2007, but with about five million fewer workers.

Given the many productivity gains across the economy – that is, the fact that employers have learned how to make more with fewer workers – there is also debate about what exactly “healthy” employment would look like in the current economy, and whether it still makes sense to use the pre-financial-crisis economy as a benchmark for what the employment landscape should look like.

There were revisions to the numbers from February and March that make those months look slightly better than they did when the numbers for those months first came out, but as CNBC notes the underlying facts make it clear that we still haven’t gotten over the weaknesses that have made this one of the weakest recoveries the economy has seen:

[O]verall the report painted a picture of a jobs market that had gotten a boost from unseasonably warm winter weather but now has cooled.

The service sector again accounted for most of the job creation, growing 101,000 while manufacturing added just 16,000, according to the Bureau of Labor Statistics. Governments cut a net 15,000 jobs for the month. The average work week was unchanged at 34.5 hours.

Though the headline number indicated job creation, the total employment level for the month actually fell 169,000. The disparity likely emanates from a drop in the labor force participation rate — or the level of Americans actively looking for jobs or otherwise employed — from 63.8 percent to 63.6 percent, its lowest level since December 1981.

The amount of discouraged workers swelled from 865,000 to 968,000, an increase of 12 percent.

“In the weakest recovery since the Great Depression, more than four-fifths of the reduction in unemployment has been accomplished by a dropping adult labor force participation rate — essentially persuading adults they don’t need a job, or the job they could find is not worth having,” said University of Maryland economist Peter Morici.

Outside of job creation itself, which is woefully below what we’ve seen in other recoveries (in April of 1984, for example, more than 400,000 new jobs were created) The labor force participation numbers are perhaps the most important ones to pay attention to here. The media, and the Obama campaign, will point to the fact that the Unemployment rate has fallen to 8.1%, but what they aren’t telling you is that if the labor force participation rate in April was the same it had been in March, the rate would have risen to 8.4% and if the participation rate had been the same as it was in January 2009, the unemployment rate this month would be 11%. It’s fairly easy to make that unemployment rate go down when people give up looking for work altogether, but if you look beneath the topline numbers you see that thinks aren’t nearly as rosy as they seem to be.

To get an idea of what we’re dealing with, consider these two charts from Zerohedge.

The first shows us that Labor Force Participation is at its lowest point since 1981:

The most significant thing to remember about this is that the potential labor pool in 2012 is far larger, and far more diverse, than it was 31 years ago. Not only is the working age population larger but it was been increased over the years by the fact that the number of women working is larger today than it was back then. And yet the number of people participating in the labor force is at the same level it was when Ronald Reagan was just beginning his time in office. Some analysts have ascribed the drop in labor force participation to Baby Boomer retirement and while that may account for some of it, it most assuredly doesn’t account for all of it. Moreover, if someone in their late 50s who’s unemployed decides to give up on looking for work and call themselves “retired,” that doesn’t really count as a success for the economy.

The other chart shows us that the number of people not in the labor force has been on a steadily ascending curve since the recession started:

Again, retirement will account for some of this, but not all of it. For the most part it’s yet another sign that the job market is so weak that some people have simply given up looking for a job altogether.

Numbers like this make it hard to argue that the mere fact that the unemployment rate is dropping means that the economy is significantly improving.  The average American is, I think, smart enough to recognize the difference between rosy headlines on the news and the reality that they see around them. While there are some signs that the economy is growing at least modestly, what we’re learning once again this year is that this growth is barely strong enough to create enough jobs to keep up with population growth, never mind generate the kind of numbers to give anyone hope that we’re going to see anything approaching normal, or at least what we used to think was normal, for the foreseeable future. What the political impact of that might be is anyone’s guess, but it’s generally not the kind of thing that incumbents should be comfortable with.

FILED UNDER: 2012 Election, Economics and Business, US Politics, , , , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. MBunge says:

    We’ve built an economy that emphasizes efficiency over all else and is rigged so most economic wealth flows toward the top. Why should we expect that economy to create a lot of jobs?


  2. Tillman says:

    The government should start hiring. But then we’d need to raise taxes to pay for that hiring.

    Oh well.

    I just hope that this time around, some CEOs and money managers get fired without a severance check. If that happens, they’ll sell their big homes and buy smaller homes in affluent suburbs, thus once again restarting construction and the housing market and finally getting us out of this pit we’re in.

  3. anjin-san says:

    In other news, the unemployment rate fell to 8.1%. The unemployment rate has dropped since August, when it was 9.1%.

  4. @anjin-san:

    Did you miss the part abut the lowest labor force participation rate since 1981?

  5. Not Likely says:

    It’s cute that Zero Hedge decided to cut off the people not in labor force chart in 2007. Let’s take a look at that same chart extended to 1975


    It’s directly proportional to population.

  6. Drew says:

    “In other news, the unemployment rate fell to 8.1%. ”

    And in yet other news, President Obama announced his new appointments to the Labor Department: the Tooth Fairy, Santa Claus and the Easter Bunny…..

  7. Tillman says:

    @anjin-san: For the wrong reasons:

    The number the politicians look at, however, is the unemployment rate, which ticked down to 8.1%. That’s still high, but it’s not a statistic to beat Obama round the head with.

    The big news, however, lies elsewhere, in the fact that a whopping 522,000 people left the labor force last month. When more than half a million people in one month decide that they’re not even going to bother looking for work any more, there’s no way you can say you’re in a healthy recovery.

  8. anjin-san says:

    From the tooth fairy, I mean the Economist

    Economic and financial indicators released in the past few weeks portray a surprisingly chipper economy. In the three months to the end of February employers added 734,000 jobs, which is the best result since April 2006 if you exclude from past figures workers hired temporarily for the federal census. The unemployment rate has fallen by 0.7 percentage points since September, to 8.3%. And this is not just a matter of discouraged workers giving up the hunt for work. A broader measure of unemployment that includes discouraged and underused workers has fallen even further (see chart)


  9. This Doug Mataconis article is predictable, to say the least.

  10. Drew says:

    If you need some help with your delusional tendencies, anjin-san, I can direct you to proper psychological counseling. If you care about some sober reality read these. I doubt you care.



  11. @James:

    My apologies for not parroting the party line from the West Wing.

  12. Commonist says:

    Democrats can just point to local and state governments shedding public jobs.

    Republicans firing people to keep taxes low is not something the left is responsible for.

  13. Gromitt Gunn says:

    But at least our state and local governments are getting rid of cops, firemen, nurses, and teachers!

  14. anjin-san says:

    If you need some help with your delusional tendencies, anjin-san,

    I do my reading on the economy in the Economist & the WSJ (they who provided the 8.1 figure). I guess that makes me a delusional communist in your book.

  15. EMRVentures says:

    I haven’t seen much on this, but couldn’t at least part of the workforce participation number be systemic? We’ve had several years now of boomers reaching civil service retirement age. I know in my neck of the woods, a good deal of the government job cutting in coming in the form of buyouts and bumps in retirement package. A 58-year old cop or teacher with a buyout is likey not going to need to reenter the workforce.

  16. @Doug Mataconis: Dog, please. You espouse libertarian, small-government economic theories, and then write the exact same “disappointing” jobs/growth report every month.

    At some point you need to make the connection between the pro-cyclical/austerity polices you support, and the anemic growth we’re experiencing.

  17. J-Dub says:

    Add to all this the fact that 1.2 million high school students drop out every year before graduating and you are adding that many people to the labor market that are practically unemployable.

  18. anjin-san says:

    Nonfarm payrolls grew by 115,000 last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1%.


    Having a hard time time seeing where I am “delusional” Drew. I am citing 2 respected financial journals, neither of which is a particular friend to Obama.

  19. James,

    The numbers are what they are. The fact that I disagree with you about what the solution to the problem(s) might be is, I think, the real source of your hostility.

  20. @Doug Mataconis: First, my apologizes if I’m imparting any undue animus. I have respect for you and your opinions. That being said, my dispute isn’t with the numbers, or even our disagreements on possible solution(s).

    My “hostility” is rooted in your insistence on not providing any economic context, writing long articles crowing about how fiscally stimulative plans have been/are “boodoogles” , and then publishing identical monthly articles that a) offer zero added analysis and b) place none of the current facts in the context of your deeply held views about limited government needs to be.

    You’re not being honest to your readers, and I think even worse you’re not being honest to yourself. If you want small government, you’re going to get small growth, especially after the worst economic crisis since the Great Depression.

  21. @Doug Mataconis:

    Did you miss the part abut the lowest labor force participation rate since 1981

    Given that the first spike of the baby boom generation just has passed 65 years old, wouldn’t we expect labor force participation to be dropping even in a good economy due to retirement? The BLS doesn’t track the number of retired people, but based on their most recent study (http://www.bls.gov/opub/mlr/2000/10/art3full.pdf), the labor participation rate for people over 65 is less than 20% for men and less than 10% for women.

  22. Drew says:

    “I do my reading on the economy in the Economist & the WSJ (they who provided the 8.1 figure).”

    Intelligent people do not simply regurgitate superficial information, they interpret it. But thank you for the self identification.

  23. JKB says:

    A good part of this is that the government offices as organized in the 1930s are no longer equipped to track the “new” employment. Industrial jobs have declined and once the unemployment payments run out there is no reason for a person to waste their time trucking down to the government office to find out there are not job openings. So they fall out of the stats.

    Are these lost workers really just giving up or seeking other opportunities through an underground economy or starting to work for themselves?

    The one thing we know it the department of labor’s taps into the labor force are breaking down as the workers seek someway to make a living outside of the employers the government is strangling with mandates and punitive “enforcement actions”, or as they call them at the EPA, crucifixions.

  24. JKB says:

    @Stormy Dragon:

    True, CARPE DIEM had this gif showing the tsunami as it overtakes the demographics.

    The retirement of those reaching 65 would also be disproportionately in jobs neatly fitted to the BLS stats while the entry jobs are likely to be in the new economy that, thankfully, Washington isn’t fully aware of yet. We got the IT revolution because the statists in DC didn’t see it coming and we may have another revolution if we can keep the new economy off their radar lest their penchant for abortion kill it in the womb.

  25. rudderpedals says:

    Why hire if there’s no demand? No one will. One can push the supply-side string barely at all (it crinkles)

    Fix demand and jobs come back.

  26. anjin-san says:


    Intelligent people do not simply regurgitate superficial information, they interpret it.

    I must have missed the insightful analysis you provided when you cited ZeroHedge.

  27. Tano says:

    Some analysts have ascribed the drop in labor force participation to Baby Boomer retirement and while that may account for some of it, it most assuredly doesn’t account for all of it.

    Well, how much of it does it account for?
    I doubt anyone assumes that it accounts for all of it – but does it account for nearly all of it? Or very little of it?

    If the former, then the data does not really indicate some real problem. If the latter, then perhaps it does.

    Would it not be a good idea to get an answer to this point before making conclusions?

  28. michael reynolds says:

    I believe what Drew means is that intelligent people interpret information in such a way as to confirm their self-serving ideological presuppositions.

    In what way is our economy about job creation? I thought we were all huge fans of productivity and efficiency and the profits that flow from that. Productivity is fewer people doing the same work. If our goal is fewer people doing the same work in order to yield higher profits, by what alchemy is that supposed to result in more jobs?

    The stock market seems pretty happy overall, so obviously there’s an expectation of profit despite a lack of jobs. Except that it’s not “despite” a lack of jobs but rather, because of a lack of jobs.

    The investor class gets richer — Drew and Mr. Romney being examples — and working people lose jobs.

    And mea culpa, we’re busy in publishing killing jobs in the name of productivity and profit and damned if it isn’t working out pretty well for me so far. Which should mean I go out and hire people, right? Except, no. I don’t. Because that would cut my productivity and profit. So really what I do is just keep the money.

  29. LaMont says:


    I’ll add that in my opinion government is part of the overall infrastructure for which businesses depend on to thrive. To too many Republicans, this means providing a sweet deal which bussinesses can directly take advantage (their bottom line). While this has its merits, it only works to a certain extent. Businesses also thrive by indirect means that should be obvious to everyone – education, infrastructure, police, fireman, etc. This is what the “Social Contract” is all about You’re right on.

    The conditions has to be right for bussinesses to thrive – not just for the business itself. There is no way conditions can be right unless you spend money. Its called investing. I understand government spending is a problem but too many are cutting the spending that actually benefits economical growth. I want to hear just one republican admit that….JUST ONE!!!

  30. LaMont says:

    @michael reynolds:

    Very interesting. Now the question I have is who’s responsibility is it to sustain a middle class? Can the middle class even exist anymore? is it all about the people at the top and the middle class be damned? The answer may hurt!!!

  31. michael reynolds says:

    I don’t think anyone set out to destroy the middle class, I think people have 1) An entirely baseless faith in the science of economics, 2) An inability to separate self-interest from analysis, 3) A mind-set that makes it impossible for them to even suspect a paradigm shift, to imagine that the world is changing and 4) A touching quasi-religious faith in mystical economic forces that somehow through some agency not explained create jobs despite the fact that we are working feverishly to destroy jobs.

    In short, I don’t think people, even the experts, have the slightest idea how to create jobs. I think the last 50 years of growth are largely the result of unusual historical conditions — the destruction of WW2, the self-inflicted wounds of communism, a lucky confluence of scientific and technological advances and demographics. I also think status-driven consumerism and materialism is about played out as an engine. But hell, I don’t know. Then again, I think that puts me on a par with the experts.

  32. Ron Beasley says:

    The good news is oil has dipped below $100 bbl for the first time in months and gasoline futures are below $3 a gallon.

  33. It’s kind of funny to me that I can read the raw economics feeds (blogs) and then count on the worst news to be cherry-picked for OTB.

    We would not, for instance, expect to see this WSJ piece:

    More Consumers Plan Summer Travel as Sentiment Improves

    I’m not sure what’s going on, myself. I wonder about this effect a bit:

    Identity and wellbeing: How retiring makes the unemployed happier

    I took early retirement myself, before it was “cool.” I’m out of the labor force, in my fifties (was in my forties, actually). I am in that graph above, showing lower labor participation. How many are like me? No way to know, but national wealth might be part of the answer.

  34. Rob in CT says:

    @Ron Beasley:

    One has to assume that robust economic growth would reverse that and send oil back up again, though. Which is part of our problem.

  35. michael reynolds says:

    @john personna:
    I’m curious whether you feel yourself part of a phenomenon I’ve intuited but cannot demonstrate: a move away from consumption for consumption’s sake, a general turning away from materialism.

    I’ve talked about this over at Schuler’s blog. It occurred to me one day that there were essentially no “things” I wanted. I’m on of the 1% and it’s not that I have the perfect house or perfect car (I don’t) it’s rather that I’ve kind of lost interest in pursuing those things. In my job I spend a lot of time listening to and reading the Tweets and Facebook updates of teenagers and I get a feeling they’re going the same way. They don’t talk about stuff they want.

  36. Another point in the demographic hypothesis: if you look at Doug’s labor participation rate chart, the uptick begins right as the tail end of the baby boom is graduating from high school (1964 + 18) and the downtick begins right as the leading end of the echo boom starts graduating (1981 + 18). That is, participation rates jump right as there’s a sudden sharp decline in the number of people entering the work force and dives right as right as it sharply increases again. So that entire curve from 1981-2012 could just be a reflection of the small size of the Generation X cohort rather than the underlying economy.

  37. @michael reynolds:

    Heh, I loaded my backpack this morning, for a overnight in Sespe Wilderness. Depending on how you look at it, that is, or isn’t materialism.

    (That bag is way overkill for a 50 degree night, but it’s my lightest bag.)

  38. @john personna: I used to sell -40 Western bags to New England mountaineers. Just want to commend you on an excellent taste in gear.

  39. @michael reynolds:

    On economics .. it’s funny. I’ve been very critical of economic overconfidence (unfortunately almost a field requirement), but I still like many of the tools.

    Once we establish that economics is not a science, that it cannot predict the future, we can get back to its tools describing the past and present.

    I mean, the Black–Scholes or Value At Risk equations tell us something useful. It’s just very, very, important to remember what they don’t tell us. Wall Street failed big time at that, in several blow-ups over time.

  40. michael reynolds says:

    Has anyone done a survey of the “underemployed” or people who’ve taken themselves out of the labor market to ask them why?

  41. michael reynolds says:

    Once we establish that economics is not a science, that it cannot predict the future, we can get back to its tools describing the past and present.

    To use a perhaps overly dramatic example, I’ve thought of the physicians in, say, the 16th century, who would look at plague victims. They would clearly recognize and correctly diagnose the symptoms. They would have valid predictions on death rate. They would know the sequence of the symptoms. They would be able to gauge body temp (at least roughly) various bodily fluids, pulse, etc… But they would have no idea of germ theory or of the method of transmission and be nowhere close to a cure. Lots of data, even accurate data, but insufficient contextual knowledge to make it useful.

  42. @James:

    Thanks. It is a neat bag. Never had to pull it up past my shoulders.

    I’ve got another window open right now, looking at a Sin50 quilt (MYOG). I might do a lighter weight one for summer. It should be a good project for me and my mom.

  43. Ron Beasley says:

    @Stormy Dragon: Good point about the boomers and it should also be pointed out that the boomers had fewer children as well. A decrease in the labor force has actually been predicted for a long time. I was 55 when the Tech Boom came crashing down. I effectively left the labor force in 2001 because it was pretty clear that a 55 year old manufacturing engineer was not going to find another job. I knew several people in their late 50s and early 60s who did the same thing.

    This might explain some of it

  44. @michael reynolds:

    Well, consider GDP. There are a lot of things it won’t do. It won’t tell you if a people are happy and fulfilled. It won’t tell you if economic conditions are easy or hard. But in one narrow way it has use. It can tell you, one year to the next, if more business has been done or less. It allows you, say, to compare year to year changes in GDP to year to year changes in oil prices. You can make some guesses about the causation.

    I think stuff like that is great, as long as you hold yourself to some moderate confidence.

    As an aside, it was early 19th century advice to drink gin for the treatment of cholera …. the punch line is that to some degre, it works.

  45. Hey Norm says:

    8 years of bush saw 7000 private sector jobs added a month.
    I’ll take 120,000.

  46. anjin-san says:

    @ Hey Norm

    You are not allowed to talk about Bush. It never happened.

  47. Hey Norm says:

    You can’t advocate for smaller government and complain about these numbers because what’s missing here is public sector jobs.

  48. Ron Beasley says:

    From the above linked report:

    Labor force participation has fallen
    significantly over the past decade. At least some of this decline is due to the
    recent deep recession and lackluster recovery. Additionally, for quite some
    time, economists have forecasted that the age structure of the population,
    would put downward pressure on labor force activity. We estimate that just under
    half of the decline in LFPR since 2000 is due to such factors. We expect these
    demographic patterns to continue for at least the next decade, and likely far
    shifting demographics, particularly in beyond, as the large baby boom cohort
    continues the transition into retirement. Therefore, standard labor market measures
    used to compute gaps in resource utilization, such as the employment-topopulation
    ratio and the LFPR, should reflect these long-running patterns.

  49. @Ron Beasley:

    I was going to say that under-30 unemployment would be a better measure, but wealth cuts there as well. Some kids are sitting on the sofa with an x-box because they can.

    Ah, rate of household formation works on that end. It “seems to be rising again.”

  50. PD Shaw says:

    Its not retirement related. The increase in early retirements appears to be less than those who’ve delayed retiredment because of depreciation in home values and 401ks. Link w/ chart.

    Among those 55-and-up, the employment-to-population ratio barely dipped even in the depth of recession and is now higher than at the end of 2007. The ratio among those 25-54 remains about 4 percentage points lower than before the recession started.

    For the 65-69 and 70-74 groups, the employed shares are up 1.1 percentage points and 1.6 percentage points, respectively, over the past four years.

    The good news is people under 25, whose employment-to-population ratio is about 6.5 percentage points lower than before the recession started, is that people under 25 don’t vote.

  51. @john personna: Nice. I got Marmot’s Plasma 30 for my climbing trips. It’s pricey, but it keeps my sleep sleep system well under 3 lbs.

  52. J-Dub says:

    Some of these comments reminds me of a scene from Office Space, when Peter was asked what he would do if he had a million dollars:

    Peter Gibbons: I would relax… I would sit on my ass all day… I would do nothing.
    Lawrence: Well, you don’t need a million dollars to do nothing, man. Take a look at my cousin: he’s broke, don’t do shit.

  53. @James:

    Nice as well! I think you’re disqualified for Michael’s reduced consumption category though. 😉

  54. Davebo says:

    Intelligent people do not simply regurgitate superficial information, they interpret it.

    Yes Drew, that was some fascinating interpretation you offered. Personally I thought Tyler’s role in Fight Club offered better economic representation but hey, who knows?

  55. I am Jack’s 10-year Treasury yield.

    1.88% A 3-month low.

  56. @Ron Beasley:

    A decrease in the labor force has actually been predicted for a long time.

    There’s a distinction between the total size of the work force and the participation rate. To some extent, they should be inversely related. That is, as the pool of available workers shrink, there should be less “surplus inventory” available.

  57. @Stormy Dragon:

    I’m actually making the opposite argument: that as we moved from the large Boomer cohort to the small Generation X cohort entering the labor market, the participation rate shot up because there were suddenly less new workers to fill newly created jobs. Then, as we moved from the small Generation X cohort to the larger Generation Y (aka the Echo Boomers) cohort, the labor pool suddenly became much bigger again and the participation rate dropped back to the previous level.

    If this is the case, the wave of boomer retirements starting right now should create new demand, so going forward we would expect the participation rate for people < 65 to jump back up to the 80s level even as the total participation rate continues to decline.

  58. PGlenn says:

    The Zero Hedge chart (above) + the IBD report (linked by PD Shaw above) on employment to population ratio for workers 55+ years old = ?

    Hmmm, rather than seriously ponder that question, I think I’ll just plug my ears and hum to myself, “the unemployment rate dropped again . . . na na na na na . . .”

  59. anjin-san says:

    the unemployment rate dropped again . . . na na na na na . . .

    No one is saying the economy does not have serious issues or that the employment picture is rosy. What they are saying is that the lukewarm positives we have today are a hell of a lot better than being perched at the edge of the abyss, which is where we were when Mr. Bush handed the keys to the Oval Office to Obama.

    But the GOP is always up for a round of “Everything sucks and it is all Obama’s fault…na na na na na…”

  60. Ben Wolf says:

    If it’s a choice between sluggish growth due to an insufficient deficit or descent into a depression via austerity measures, I’ll choose the former.

  61. Hey Norm says:

    The public sector has shed 600,000 jobs under Obama.
    The public sector added 900,000 jobs during Bush’s first term.
    That’s a delta of 1.5M jobs.
    Add 1.5M jobs to the current situation and the discussion is completely different.

  62. Hey Norm says:

    Small Government…you want it…Obama has delivered…not Republicans…not never.

  63. Ben Wolf says:

    Once we establish that economics is not a science, that it cannot predict the future, we can get back to its tools describing the past and present.

    This is simply not accurate or acceptable. Some schools of economics have excellent predictive power and have demonstrated it again and again. Yet those who have been consistently correct are ever more marginalized by mainstream economists who have been wrong about everything. The problem is not that economics cannot predict, the problem is that economics is dominated by anti-government ideology.

  64. Ben Wolf says:

    @Hey Norm: It’s horrific how many people (including our supposed best and brightest economists) do not understand that spending = incomes, and cutting spending means increased unemployment and growth. Those same people when confronted wth the data will then make up the most fantastical explanations for why their pet theories have proven wildly inaccurate.

  65. Ben Wolf says:

    Increased = decreased in the last post.

  66. john personna says:

    Uo@Ben Wolf:

    You did not provide a link or reference, but you should know my favorite by now: Fooled By Randomness – Nasim Taleb

  67. Hal (GT) says:

    Great point:

    Some analysts have ascribed the drop in labor force participation to Baby Boomer retirement and while that may account for some of it, it most assuredly doesn’t account for all of it. Moreover, if someone in their late 50s who’s unemployed decides to give up on looking for work and call themselves “retired,” that doesn’t really count as a success for the economy.

    I think this number is really huge. I run into people every week that have pretty much given up and are doing things like living with others, doing odd jobs, living off of savings and retirement funds, or selling stuff and moving to states with low taxes and cheaper cost of living.

    In the past two weeks I’ve had three separate people stop by and ask me if I had any scrap metal that I needed hauled away. That’s not a good indicator to me.

  68. grumpy realist says:

    @john personna: Actually, Black-Schoals makes a bunch of mathematical assumptions which work out really well when it comes to, say, the temperature in a box of gas molecules but isn’t so great when it comes to financial instrument prices….

    As I’ve said before: gas molecules don’t scream and panic and stampede into one corner of a box. Humans often do.

  69. john personna says:

    @grumpy realist:

    Would you accept Black-Scholes for a measure of historic volatility?

    IIRC, LTCM blew up because they thought that implied future risk.

    They areall not theto same, but folk who put “past perfomance does not imply future return” in their prospectus get suckered in even so.

  70. john personna says:

    (Stupid phone)

  71. al-Ameda says:

    The economy is anemic and it should come as no surprise at all. Because of bailout actions taken in 2008 and 2009 we survived the biggest economic failure since the Great Depression, still the cost was enormous.

    Look at it this way: in the 2008 crash of the housing and financial systems, (1) Americans lost about $7 trillion in wealth associated with collapse of the financial equity markets, and (2) over $6 trillion in housing equity (more wealth) was lost when the housing market crashed. Effectively, over $13 trillion in wealth was vaporized in the crash, and while the financial equity markets have recovered somewhat, the housing market is very weak.

    All of that translates to weak demand and anemic growth, and I suspect it will continue this way into the near future. What could set us back are austerity-based policies that pull more spending out of the economy.

  72. Hey Norm says:

    Mr. I know how the economy works says we should be making 500k jobs a month. Which tells me he has no clue how the economy works.

  73. Ben Wolf says:

    @john personna: Link to what?

  74. @Ben Wolf:

    You said above “Some schools of economics have excellent predictive power and have demonstrated it again and again.”

    Your actual claim there is “reliable accuracy.”

    I don’t believe you can find an economist who bats 1000.