8.3 % Reax: “That Sound You Hear Is Champagne Corks In The West Wing”

Andrew Sullivan —  Feb 3 2012 @ 11:14am


Felix Salmon celebrates today's strong employment report:

You thought the December jobs report was great? I certainly did — but it’s been revised, now, and it’s even better than was first reported. And the January report is positively glowing. Unemployment was just 8.3% in January, marking three successive months where it fell by 0.2 percentage points. This time last year, there were 13.9 million unemployed; that figure has now dropped by 1.2 million people, or 8.3%. That’s really impressive for an economy which is hardly booming.

 Yglesias also cheers:

State and local layoffs continue to be a drag on the economy, and it continues to be true that at this pace it will take years to get us back to full employment, but these are the kind of numbers I'm looking for when I talk about an accelerating recovery. This is still a crappy labor market and there are still a dozen way policymakers could screw us in 2012, but if they avoid new disasters we are on the road to recovery.

Joe Weisenthal is excited about the revisions:

[R]evisions are important for what they tell us about where we are in the cycle. Because initial reports are based on some combination of survey and model, the BLS has to extrapolate the "real" number in part based on cyclical trends. If past reports keep getting revised up, it means the BLS is still behind the curve in measuring how fast the economy is growing.

Derek Thompson worries about the long-term unemployed:

[L]ong-term unemployment is still an extremely sticky problem.  (Who are the long-term unemployed? See here.) The share of the jobless who have been out of work more than six months is stuck at 43 percent, roughly the same share as it was two years ago. There are still 5.5 million people who have been out of work for more than six months. As the recovery accelerates, long-term unemployment's share of the total could rise if these people are truly frozen out of the labor force and while the short-term unemployed find work.

Floyd Norris fears that the seasonal adjustments are off:

A reason to doubt the [jobs] number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions. Labor mobility is down, as fewer workers quit to seek better jobs and employers both hire and fire fewer people than they used to do. If the seasonal adjustment was too large, then the gain should be smaller.

Jamelle Bouie considers the political implications:

Earlier this morning, Nate Silver argued that 150,000 was President Obama’s “magic number” for job growth, in part, because 150,000 is the dividing line between a bad report—where the economy isn’t growing fast enough to keep up with population—and a decent one, where it is. If the economy could generate that many jobs on a monthly basis, then Obama is on okay footing for the election in November. Today’s report blows that magic number out of the water.

Ezra Klein echoes:

The bottom line is that this isn’t just a good jobs report. It’s a recovery jobs report. It’s showing the sort of numbers that win elections. As my colleague Neil Irwin tweeted, “That sound you hear is champagne corks in the West Wing.”

And Ross Kaminsky wonders how Romney will respond:

The political issue here, if this sort of economic trend were to continue, is how Mitt Romney will make his case, which is primarily an economic one, if the economy seems to be on a solid recovery track. I do not believe this pace of improvement is sustainable. Nevertheless, the argument that "this is the weakest recovery in modern American history" is somewhat too subtle for the average voter to understand.

(Chart from Calculated Risk)