Month: October 2014

Bill McBride analyzes today’s jobs report:

This was a solid report with 248,000 jobs added and combined upward revisions to July and August of 69,000. As always we shouldn’t read too much into one month of data, but at the current pace (through September), the economy will add 2.72 million jobs this year (2.64 million private sector jobs). Right now 2014 is on pace to be the best year for both total and private sector job growth since 1999.

Vinik recommends looking at the three month moving average (above), which shows that “the economy certainly has strengthened over the past six months and is in better shape.” But he also spotlights the “one glaring sign that there is still slack in the labor market: wages are stagnant”:

In September, wages grew 0.0 percent, below expectations of 0.2 percent. Over the past year, wages have grown just 2.0 percent, barely keeping up with inflation. Wages will rise when employers have to compete for scarce labor—i.e. when the economy is at or near full employment. That clearly isn’t the case right now, meaning the 5.9 percent unemployment rate doesn’t represent the current state of the labor market. If the Fed were to raise interest rates, it would choke off the recovery and prevent any wage growth.

Annie Lowrey finds that “Jobs Day has become less and less of a tentpole event in the economic data calendar”:

In part, that is because the story of the recovery has become static: It just keeps chugging along at the same decent-enough pace. It is also because the unemployment rate — the headline number in the jobs report — has started telling us less and less about the state of the economy.

She adds that a “broader set of indicators generally gives a dimmer view of the economy — and that remains true this month, good headline number aside”:

So applaud this jobs report. It’s a legitimately good one. But do not let it change your view of the economy too much. Growth might be accelerating, but the underlying story of the recovery is not changing. For tens of millions of families, that unemployment rate is nothing but a number.

Jared Bernstein focuses on the participation rate:

The labor force participation rate (LFPR)—the share of the 16 and up population either working or looking for work—is a key variable to watch these days. It ticked down slight last month, as noted, but as shown in the chart, has generally stabilized over the past year. This has two important implications.

Source: BLS

First, it suggests a strengthening job market as part of the decline in the LFPR over the recession and weak recovery was due to discouraged job seekers giving up hope. Second, as noted above, it means that recent declines in the jobless rate are due to more people getting jobs versus giving up the search.

Ben Leubsdorf plucks out other key numbers from today’s report. One that shouldn’t be overlooked:

The number of workers who have been unemployed for more than six months has declined over the last year by 1.2 million. But 3 million strong in September, they still made up 31.9% of all unemployed Americans.

And Kilgore asks, “will it matter politically?”

It’s unlikely. As Dave Weigel points out, at this point in 2006, just prior to a Democratic midterm landslide, the unemployment rate was under 5% and net job growth was steady if not spectacular.

Virginia Hughes looks at the methods for detecting lies:

[T]here’s a huge problem with the polygraph: it’s all-too-frequently wrong. Truth-tellers may show a strong physiological response to being questioned if they’re nervous or fearful, which they often are — particularly if the target of a hostile interrogation. … Because of these considerable flaws, polygraph evidence is almost never allowed in court. But it’s still used routinely by federal law enforcement agencies, not only for screening accused criminals but potential new employees.

It turns out there’s a much more accurate way to root out deception: a 55-year-old method called the ‘concealed information test’. The CIT doesn’t try to compare biological responses to truth versus lies. Instead, it shows whether a person simply recognizes information that only the culprit (or the police) could know.

She considers why the CIT, employed frequently in Japan, hasn’t caught on in the US:

One reason, according to [John] Meixner, is that the CIT only works if it’s given at the very beginning of an interrogation. Otherwise, through the process of questioning, the suspect may gain knowledge about the crime that he or she didn’t have before. Investigators are “not especially keen on that.”

The CIT is also a bit less versatile than the traditional polygraph, because investigators have to know some hard facts about the crime before testing the suspect. In a real-world terrorism plot, for example, investigators wouldn’t necessarily know what city or month or weapon to ask about.

But the biggest reason we don’t use the CIT, according to Meixner and Rosenfeld, is probably cultural. As they wrote in a review paper last year: “The members of the practicing polygraph community simply do not like giving up [that] which they are used to.”

Katie Zavadski covers it:

The pharmacy boom began in 2000. That year, a report from the Department of Health and Human Services suggested that 98 percent of Americans lived in an area adversely affected by a pharmacist shortage. Almost 6,000 pharmacist jobs stood empty, and the shortage was only predicted to grow worse. The following year, a group now known as the Pharmacy Workforce Center predicted a shortfall of 157,000 pharmacists nationally within two decades as demand and responsibilities increased while the number of pharmacists stood still. As Baby Boomers aged, the thought went, pharmacists would be able to fill some roles traditionally held by doctors, and would be able to counsel them on how to take the medications prescribed to them.

Quickly, the free market kicked in.

Over the last 20-odd years, the number of pharmacy schools in the United States has almost doubled. There were just 72 such schools in 1987; today, there are more than 130.

At first, graduates found work easily. No matter where in the country a young pharmacist wanted to settle, the number of jobs available far exceeded the number of people qualified to fill them. Slowly, the numbers began to even out, and 2009 marked a turning point: The number of jobs available was roughly on par with the number of pharmacists searching for work. The days of signing bonuses and vast job choices were over.

How this compares to the quickly deflating law school bubble:

What makes the situation in pharmacy slightly more sinister than a comparable crisis in law is that students commit to many of these six-year programs straight out of high school. (About half of graduating pharmacists each year are aged 25 or under.) Not only do they have little understanding of what such a debt load may mean for them, but they also tend to rely more heavily on the suggestions of parents and friends. And, even if they made the decision to pursue pharmacy through their own research, the rapid growth in the number of pharmacists means many are gambling on a job market six years into the future. Further, while a law degree can be useful in a wide range of professions, including business and consulting, pharmacy degrees have relatively narrow purposes: PharmDs are equipped to oversee the dispensation of medication and counsel patients on how to take it and its effects.

James McAuley interviews Anne Sinclair, who recalls a challenge when renewing her French identity card in 2010:

The bureaucrat that day… demanded that she prove her citizenship in the following way: “Are your four grandparents French?” he asked. In New York this week, Sinclair told me that this was precisely the moment she decided to write My Grandfather’s Gallery: A Family Memoir of Art and War. “As you know,” she said, “this question is particularly … tricky.”

Sinclair’s grandfather was none other than Paul Rosenberg, the legendary Parisian art dealer who was among the first to showcase masterpieces by Braque, Léger, Matisse, and Picasso in the 1920s and 1930s. In June 1940, during the German invasion, Rosenberg and his family—Jews who dealt in what the Nazis had dubbed entartete Kunst, “degenerate art”—fled for New York, and were subsequently “denationalized” by the Vichy government. Their beloved Galerie Rosenberg at 21, rue la Boétie would be sequestered by the Nazis and transformed into the Institut d’Étude des Questions Juives, a virulently anti-Semitic propaganda organization. The gallery’s walls—which had once bravely displayed a seminal transition in twentieth-century art—were then made to bear witness to the organization of “Le Juif et La France,” the infamous 1941 Palais Berlitz exhibition that encouraged viewers to “identify the Jew and protect themselves against his actions.”

Sinclair also gives her thoughts on the current status of French Jewry:

[M]ore French Jews are making aliyah to Israel in 2014 than ever before. The reasons for their departure, of course, are complex, and not easily explained by the desire to escape an anti-Semitic environment. But the fact remains that more than 2,000 Jews have left France, compared with only 580 from the same period last year. “There’s been a lot of fuss everywhere about that,” says Sinclair, “and it’s not always accurate. … I’m concerned, of course, by the anti-Semitic revival. There is one. Not only in France, in Europe, everywhere.”

“And,” she adds, “there’s a new anti-Semitism, which is not one of the ’30s or the ’40s, which is more related to the conflict in the Middle East. In some suburbs in France you have people coming even in the third generation from the Maghreb, who are living in very bad conditions, and they feel they are rejected, well, by the whole community. … This sense of being rejected is a social despair, which can mutate into anti-Semitism when they want to protest for something.”

“But don’t believe that the French Jews are fleeing—it’s absolutely untrue,” she said, emphasizing the complicated nature of the statistics often used in the reports. French Jews may be leaving France in greater numbers than before, but so have many other French citizens, seeking friendlier business climates and lower tax rates overseas.