This is a field day for number crunchers, with both federal and state employment reports being deciphered (although for different months). Nationwide, the takeaway is strong - even naysayers would have a hard time finding fault with an additional 227,000 payroll jobs, and the third straight month of 200,000-plus gains. Of course, this is the economy we're talking about, which means what we're seeing today is only a snapshot in time. The encouraging news is that we're now seeing several months of nice-looking snapshots.
Never mind the preliminaries: Are these good times or bad?
No one can challenge the growth in recent months - nor the momentum that appears to be building. More people are entering the workforce, which helps explain why the unemployment rate was unchanged at 8.3 percent, and average hourly earnings have been increasing (though not by much). Reaction among economists is almost uniformly positive. Blogger Felix Salmon says, "You can start breathing easier again."
I have a feeling there's a "but..." coming along...
Well, it's just that the employment numbers reflect what's already happened, not what's in store. Soon after the job numbers came out, economists at Goldman Sachs and Macroeconomic Advisers revised downward their estimates for first-quarter growth to 1.8 percent from 2 percent. J.P. Morgan Chase lowered its estimate to 1.5 percent from 2 percent. Normally, you'd like to see at least 3 percent growth.
What's up with the downgrades?
They're worried that the global economy isn't all that strong, and the report today of a drop in exports would suggest as much. Also, there are vague concerns that employment in January and February was inflated because of the warm weather. And don't forget the usual imponderables: Iran, Europe, gas prices. One other problem: You have roughly half the country that, consciously or not, is quick to pooh-pooh the recovery because it enhances President Obama's chances of being reelected. That could explain the still-depressed consumer confidence figures. At this stage, they should be quite a bit higher.
What about the numbers that came out today for California and L.A. County? They seem weaker than the national results.
At first glance, yes. Good news is that California's jobless rate in January was under 11 percent for the first time in nearly three years. Bad news is that 10.9 percent doesn't exactly suggest boom times. L.A. is even worse off, at 11.8 percent (the city of L.A. weighs in at 13.3 percent). Not that the local and state economies aren't getting better - just that the weak housing market and a pullback in pubic sector jobs create a real drag on growth.
L.A. County seems to have gotten killed in payroll jobs. From December to January, 85,000 positions were lost. Did that really happen?
Hmmm, that's what the government is saying. Keep in mind that around this time of year the employment statistics go through a kind of cleansing process called benchmarking - and the exercise can result in significant revisions from earlier readings. The movie and TV industry, for example, is listed as losing almost 24,000 jobs in January. Entertainment is a volatile industry, but those numbers seem way too high. Maybe it reflects previous months of overstated increases that are now being adjusted.
Why can't California get it together?
Look at the numbers a littler closer. Over the last year the state has gained 126,100 jobs, and since September 2009 the figure is 322,400. That's really solid growth - as good as you'll find most anywhere. It's just that California has more catching up to do than other states. I would imagine that over the next 12-18 months, all things being equal, you'll start seeing "California Comeback" stories in the national media.
My head is starting to hurt. Can you please get to the point?
The point is that the recovery keeps moving slowly, and it's bound to hit several speed bumps along the way. More importantly, we're entering an extended period of subdued economic growth. That's a nuanced point, which means it's not receiving much attention, but it's a point worth remembering. Look, the economy has been under the knife for four years, and things are simply not the way they were in 2007. That means a different kind of hiring, a different way of attracting business, a different way of investing and borrowing money. No amount of political rhetoric or longing for the old days changes that reality.