Poll Position: Is the economy gaining or just breaking even?

Today’s jobs report was not good. From December to February, net job creation surpassed 200,000 per month — and while estimates vary about how many new jobs are needed each month simply to keep pace with population growth, pretty much everyone agrees anything north of 200,000 is good news. But in March, the Bureau of Labor Statistics’ initial estimate is a disappointing 120,000. That was the worst monthly showing since October, and the worst figure for March since 2009. It doesn’t represent the kind of growth that heralds a reinvigorated labor market.

What's up with the economy?

  • It's just treading water (39 Votes)
  • It's gaining ground (28 Votes)

Total Voters: 67

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The unemployment rate fell to 8.2 percent from 8.3 percent, but that had a lot to do with people giving up on finding jobs and exiting the labor force. At this stage of an economic recovery, people ought to be rejoining the labor force as they see an uptick in hiring.

Now, the dip in March could be a blip on the way to better news in the months to come. [Whoops: Meant to include the following sentence and link in the original post but got trigger-happy with the "publish" button. -- KW] After all, new claims for unemployment benefits fell last week to a four-year low and for weeks now have been hitting numbers that suggest stronger hiring. Or the March jobs figures could be a sign that, like last year, when strong jobs numbers from February to April were followed by dismal showings from May to August, the burst of stronger hiring was the blip.

Which raises a question: Is the economy really recovering?

CNBC’s report on the jobs numbers included this section:

The slowdown in employment growth last month likely reflected the fading boost from unseasonably warm winter weather. It supported the caution on the labor market from Fed Chairman Ben Bernanke last week.

Bernanke expressed doubts the recent job gains could be sustained, and March’s weak report was in line with expectations that economic growth slowed to an annual pace of 2 percent in the first quarter from the 3 percent rate in the October-December period.

First, “warm winter weather” is not the kind of thing on which one wants to pin one’s hopes of economic growth. Second, annualized economic growth of 2 percent is below the country’s long-term trend rate and would not be a good development. Peter Morici, an economist at the University of Maryland, explained the downshift this way: “Fourth quarter economic growth was exceptionally strong as the global economy recovered from first half disruptions such as the earthquake in Japan, but first quarter growth has been slower.”

Now, 3 percent annualized growth in one quarter is only “exceptionally strong” by our “new normal” standards, not our traditional pace of recovery after recessions. And Morici’s explanation suggests the economy was catching up more than ramping up from October to December.

So, here’s this week’s Poll Position question: Is the economy really recovering, or just treading water? Answer in the nearby poll and in the comments thread.

– By Kyle Wingfield

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145 comments Add your comment

Kyle Wingfield

April 6th, 2012
10:49 am

Note: If you began reading the post shortly after I published it, please go back and see the added sentence in the third paragraph. I intended to include that data point originally. Apologies.

Jefferson

April 6th, 2012
10:56 am

The report was better than the last time we had a GOP president.

Dusty

April 6th, 2012
11:04 am

Well, one thing is sure. We can predict job production about as well as we predict the weather.
I’m not sure whether a really hot summer is good or bad. I’d better call Bernanke.

Aquagirl

April 6th, 2012
11:06 am

Treading water. We still have way too much housing, unsustainable lifestyles and a generally stupid populace. It’s all downhill from here, folks. Enjoy the waning years of the Republic.

On the bright side we’ll all go out while playing Angry Birds, so our cool toys will lessen the pain.

Dusty

April 6th, 2012
11:07 am

OK Jefferson,

You have made your “knock-a-GOP” comment for the day. We don’t need any more.

JF McNamara

April 6th, 2012
11:13 am

The S&P is at 1398. The economy is healthy because people are buying things from our companies leading to higher corporate profits. If the economy was unhealthy, the stock market would be down. Spin the report however you want. It doesn’t matter.

Dusty

April 6th, 2012
11:13 am

AquaGirl,

Would you translate your moratorium? Angry birds? Cool toys? Generally stupid populace?

Since you are a liberal, I assume you might be referring to them.

@@

April 6th, 2012
11:14 am

Treading water in a shallow pool.

ByteMe

April 6th, 2012
11:18 am

The question is an economics one, so I jump to my go-to guy for economics, Barry Ritholtz over at The Big Picture blog:

The key question for the report: Seasonal weather factors. Exactly how many jobs did the unusually warm weather in January and February pull forward from March (and April). The sectors likely to be influenced are construction, auto sales, transportation, and even retail shops like Home Depot and Lowes. I have heard some people suggest even hospitality and food service gained from the record high temperatures.

He posted that this morning before the report came out. People were planting early, more construction/remodeling could be done during the normally cold slow months. 200K per month is nearly impossible to sustain for more than a few months at a time (I could show you the series if you like). Likely this was just employment pull-forward. But it’s still growth. Not fast growth, but growth.

And your assumption that people were dropping out of the employment market because they “gave up” is just an assumption. We also have the first wave of boomers hitting retirement years, so they could be dropping out because they’re old and don’t need to look for their next job. Likely it’s a combination of the two: older people have more trouble finding jobs and less incentive to stay in the job market if they have a nest egg to fall back on.

Are we really “recovering” or “treading water”? This is the “new normal” and will be until we finish working through all the issues that came with the largest credit crisis in 70+ years. One data point or 10, this is what it’s going to look like for about the next 5 years. Our course is already set, there’s not much that can be done to correct it (in other words, it’s too late for the Swedish recovery model to work, because we missed that chance back in 2008).

@@

April 6th, 2012
11:26 am

But it’s still growth.

So too, is a tumor.

carlosgvv

April 6th, 2012
11:29 am

The first thing Republicans said after Obama’s election was that their number one priority was defeating him. In keeping with that lofty priority, the Tea Party Congress has done their best to defeat evey good program he has proposed. Therefore, it’s a miracle the economy has improved at all.

curious

April 6th, 2012
11:31 am

Treading water. Hey, that’s better than drowning!

Road Scholar

April 6th, 2012
11:31 am

I see the economy improving. Remember that this is Easter week and all month has been spring break weeks for colleges and schools. I see increased housing starts IP, increased numbers of diners eating out, more activity in the stores, more new cars (check out the tags)….thus increased demand- the real indicator of job creation.

But I’ve been to some stores and their inventory has been low. Hardly any American flags in stock…American made flags- American jobs. If they want the economy to expand, stock the shelves. Not only were there not flags, but the mailbox I wanted was out of stock as well as the energy efficient light bulbs (dimable). The sales clerk check the mailbox and said there was 8 ordered but could not tell me when they would arrive. He said one person before me wanted the same box, and as I was leaving another person came up wanting the same one also. In one morning 3 people wanted the same item that was not in stock. I understand “just in time” warehousing, but isn’t it hard to sell something if you don’t have it in stock???

Dusty

April 6th, 2012
11:33 am

Well, to be or not to be an economist. I not be one. You economeisters go ahead and speak wisely. All I know is…. it is Good Friday. So…. have a good day and ..remember….

Will the last Democrat in Georgia please turn off the lights?.....

April 6th, 2012
11:35 am

“Are we really “recovering” or “treading water”? This is the “new normal” and will be until we finish working through all the issues that came with the largest credit crisis in 70+ years. One data point or 10, this is what it’s going to look like for about the next 5 years.”

So very true, though as we saw when the economy completely bottomed out in 2008, 2009 and 2010, things could be so much worse.

“Likely this was just employment pull-forward. But it’s still growth. Not fast growth, but growth.”

Very correct you are. Dealing with slow economic growth is much better than no growth or being stuck in a Great Depression where nothing is happening at all.

120,000 new jobs in a month is not the 250,000-300,000 a month that we’d all like to see, but coming out of the severe economic shock that we experienced we are lucky just to be treading water in hopes of seeing a better more sustained recovery down the road.

We’ll just have to be happy with the slow growth that we’ve got for now and hope and pray that the economy can continue to at least tread water in the face of spiking gas prices, a federal government that isn’t necessarily nearly as helpful as it could be, an unstable international political environment and a very shaky world economy until we can get a better direction.

ragnar danneskjold

April 6th, 2012
11:40 am

The only slower recovery in US history was the Great Depression, which pursued the same economic policies. The solution, of course, is to strip away government restrictions and reduce the government-erosion of capital. Will not happen so long as democrats can filibuster.

@@

April 6th, 2012
11:52 am

UGA 1999

April 6th, 2012
11:59 am

The economy is making a very slow recovery, in spite of Obama NOT because of him!

Centrist

April 6th, 2012
12:19 pm

Annual deficits added to our dangerous overhanging national debt is a huge economic brake. The Fed buying back its own bonds by printing money is an inflation time bomb, only tempered by the slow economy artificially keeping interest rates down. Our nation will be lucky to continue to tread water. Treading with our necks above water only looks good compared to flailing like the PIGS (Portugal, Italy, Greece, and Spain).

Just saying..

April 6th, 2012
12:21 pm

I fairly certain Tiberius will know the answer…

Rafe Hollister

April 6th, 2012
12:22 pm

Carlos
What program has the annointed one proposed that the GOP blocked? Can you name one? The guy does not do anything but campaign and blame, or is it blame and campaign.

Jefferson

April 6th, 2012
12:32 pm

Hey Dusty, well gas was cheaper if that qualifies as knock the Ds.

kelly

April 6th, 2012
12:34 pm

Rafe, the infrastructure bill and the ending oil company tax subsidies to name two.

Intown

April 6th, 2012
12:38 pm

Forecasting economic conditions is like trying to read tea leaves and chicken bones for me. Some guy at GE Capital told me that the economy is going to have a tremendous year. That’s good enough for me. I vote that the Economy is gaining ground. I have a 50/50 chance of being correct.

Intown

April 6th, 2012
12:39 pm

I should clarify, the “market” is going to have a tremendous year. Not sure that = the economy.

Logical Dude

April 6th, 2012
12:45 pm

more people still being hired than going on unemployment? That means improving.

Of course, it’s improving slower than any of us would like, but that means it’s still improving.

tiredofIT

April 6th, 2012
12:56 pm

Compared to losing 750,000 jobs a month at the end of Bush’s term it quite an improvement.

DannyX

April 6th, 2012
12:58 pm

The stock market doesn’t seem to be treading water.

2012 first quarter,

Dow up 8%,
S&P 500 up 12%
Nasdaq gained 19%

Linda

April 6th, 2012
12:59 pm

kelly@12:34, The oil & gas companies do not receive tax subsidies. They receive tax deductions just like we do when we deduct our interest expenses for our mortgages. They do not receive tax deductions any differently than does the manufacturing industry. The tax deductions they receive amount to $4 B per year, equivalent to what the fed. govt. spends in 15 hours. The increased costs in doing business for any company is almost always passed on to the consumer & WE would be, in essence, paying another $4 B per year for gas.
This was nothing more than another attempt to make Americans with limited cognitive skills to display anger at another American industry. The oil companies employ 900 million Americans.
The bill was defeated in the Senate 51-47 with at least 4 Democrats voting against it.

Rafe Hollister

April 6th, 2012
1:05 pm

Kelly, incorrect!

The Senate version of the transportation/infrastructure bill passed Wed, 74-22, sounds bipartisan to me. The GOP controlled House has had it, what almost two whole days now. How many temporary jobs will those create anyway?

Regarding the tax breaks for Big Oil, that does not create jobs, as Carlos was alleging. Carlos, I think, was implying that the GOP was keeping Oblamer from creating jobs and improving the economy. Removing tax breaks from the oil companies will raise gas prices which will slow the economy and cost jobs. The GOP is trying to help save him from his job killing agenda. They have said they will vote for a bill that bans all tax credits and breaks for all energy companies, but he doesn’t like that, as all his campaign contributors and insider friends are green energy scam artists.

tiredofIT

April 6th, 2012
1:05 pm

“The increased costs in doing business for any company is almost always passed on to the consumer & WE would be, in essence, paying another $4 B per year for gas.”

I think we are paying another 4 Billion, as it is our taxpayers money.

MarkV

April 6th, 2012
1:14 pm

This is a kind of report, the interpretation of which depends strongly on the political persuasion.
Yawn.
————————————————————
Dusty, hummingbirds ARE in Atlanta. A nature watch article in AJC had predicted they would arrive on the first days of April, and sure enough, two appeared at our feeders on Tuesday, and at least one a day since then.

UGA 1999

April 6th, 2012
1:15 pm

I am so sick of them showing Treyvon Martin in pictures when he was 12. He was over 6′ tall and nearly 200lbs. What a joke. Great job media!

Karl Marx

April 6th, 2012
1:17 pm

The economy in not treading water it is getting worse and will continue even if a Republican occupies the White House. Government must shrink. If it doesn’t it will kill more private enterprise which pays for government in the first place. Just ask the question who is the largest employer in the US? The only right answer is Government. Now who pays for government? Game over.

getalife

April 6th, 2012
1:18 pm

As a matter of fact, all you cons did a great job of fighting back.

I admire your resolve, loyalty and the willingness to lie to fight for your party.

Good job.

Jefferson

April 6th, 2012
1:21 pm

Hey but gas was even cheaper when Clinton left office.

UGA 1999

April 6th, 2012
1:21 pm

Getalife…speaking of “lie”. Can you tell me who Barry Soetoro is?

GA voter

April 6th, 2012
1:23 pm

The oil companies employ 900 million Americans.

Linda – could you revise that figure a bit (USA population 2011 –> 311 million)

Linda

April 6th, 2012
1:24 pm

tired@1:05, The US tax code incentivizes & punishes certain behaviors. Deductions for mortgage interest & charitable deductions are incentives for home ownership & assistance to those less fortunate.
The tax deductions for oil, gas & manufacturing are to encourage development in those industries, which create jobs, which increases tax revenues to the US treasury.
The Senate did not see the wisdom in raising taxes on oil & gas when we are reaching an all-time high in gas prices & when unemployment is forecast to be high for a long time.

Linda

April 6th, 2012
1:40 pm

GA@1:23, Thank you for letting me know.
The oil & gas industry employs 9.2 M Americans, could employ another 1.4 M by 2030 with new energy policies, pays the fed. gov. $86 M per day in fees, has paid the fed. gov. $100 B in fees since ‘00, invested $266 B in new capital projects in ‘10, paid $176 B in American wages in ‘10 & paid $35 B in dividends to its stockholders.
This is a total of $476 B that they added to the US economy in ‘10.
And they are the bad guys?
http://energytomorrow.org/economy#/type/all

Hillbilly D

April 6th, 2012
1:55 pm

In my neck of the woods, it’s just treading water and unfortunately, there were a lot of folks who couldn’t tread water for 3 years, so they drowned.

The Great and Powerful Community Organizer

April 6th, 2012
2:06 pm

“..and a generally stupid populace..”

Hey! How else could I get elected!

BuckeyeinGa

April 6th, 2012
2:07 pm

The oil industry does not need any more tax subside. They make more than enough money.

BuckeyeinGa

April 6th, 2012
2:08 pm

At this time the economy is treading water..

tiredofIT

April 6th, 2012
2:08 pm

Linda: You didn’t mention these companies are generating all time record profits. It’s not like they are struggling. It’s corporate welfare, plain and simple.

The Great and Powerful Community Organizer

April 6th, 2012
2:16 pm

Marbury v. Madison? I have NO idea.

The Great and Powerful Community Organizer

April 6th, 2012
2:18 pm

Are you kidding???? 3 “Co-equal” branches of Government??? NO WAY!

Linda

April 6th, 2012
2:31 pm

Buckeye@2:07, They do not receive subsidies. The US tax code needs to be revised to make tax deductions based on need rather than to motivate behavior?

tired@2:08, Same question to you. I’m against corporate welfare, too. Obama harps about fairness. Who decides what’s fair? Is equal the same as fair? Should all US corporations be treated the same, that is, receive the same tax deductions? Should red, white & blue energy companies be treated the same as green energy companies?

I have no personal interest in oil & gas companies. I am against demonizing any American company, especially a company that PAYS more in taxes to US govt. than it EARNS in the US (plus royalties & rents).

http://www.exxonmobilperspectives.com/2011/05/02/exxonmobil-u-s-taxes-and-u-s-earnings/

Centrist

April 6th, 2012
2:32 pm

There are 3 branches of government, and they are certainly NOT co-equal:

SCOTUS = 75%

Executive = 20%

And one other – I’ll think of it ……

Wait ……

Oh yea,

Congress = 5% (Can we just pay these 535 crooks to stay home?)

Rafe Hollister

April 6th, 2012
2:49 pm

Buckeye
So are you the “enough czar”, the one who says when a company has made enough?

I wish you would take on the “enough wasted” job as well. Enough wasted on Solyndra, windmills, algae research, war on poverty, war on drugs, solar panels, green energy, studies on why pigs stink, interest on the national debt, federal tax on gasoline, federal lawsuits against the states, etc.

When do people start saying enough with those things.