Glurk!!

Rex Nutting of Marketwatch:

Payrolls plunge by stunning 533,000 in November: U.S. nonfarm payrolls plunged by an astonishing 533,000 in November, the worst job loss in 34 years, the Labor Department reported Friday. It's only the fourth time in the past 58 years that payrolls have fallen by more than 500,000 in a month. Since the recession began 11 months ago, a total of 1.9 million jobs have been lost. The unemployment rate rose from 6.5% in October to 6.7% in November, the highest jobless rate since October 1993...

Everytime I remark to Barry Eichengreen about the disjunction between the intensity of the financial crisis and its limited transmission to the real economy, he says "just wait." I guess we can stop waiting.

Comments

[Lee Gibson]

Well, according to CNBC, at least we now have a marketing name. It's The Great Recession!

[Neal]

Thanks, George!! Heckuva job!!!

[Ken Houghton]

"disjunction between the intensity of the financial crisis and its limited transmission to the real economy"

Yeah; good thing they gained together over the previous six years, eh?

[ogmb]

Imagine you're sitting in the last car of a high speed train that just derailed and hit the pillar of a bridge.

[Neal]

"Limited transmission to the real economy"?

I'm not sure what is going on in Berkeley, but the effects in the "real economy" in Minnesota is apparent and has been apparent for months. No residential construction to speak of. Taconite mines closing in northern Minnesota. Lowest level of shipping out of Duluth in 30 years. Commercial and industrial construction off of a cliff with hundreds of construction managers (and therefore thousands of construction workers) gone. Retail slumping, non-chain stores and restaurants closing. Rumors of chain stores closings. Every day on the TV stories with ways of saving money. 25% increase in use of food shelves. More people on street corners begging for money. More people lined up at the Basilica for free coffee and bologna sandwiches. Record deficits in state tax revenue. School districts cutting back. Nurses being laid off because of fewer optional surguries and treatments. Cutbacks in employment at NWA/Delta. Rescap shut down. GE factoring operation shutdown. Cutbacks at Star-Tribune paper among others. Dropping ad revenue. Cut-back at KSTP--Hubbard broadcasting's home station. Etc., etc., etc...

California surely must be the land of milk and honey if youre not seeing any effects, or the ivory tower must be extraordinarily high!!

[bigTom]

"just wait". You ain't seen nothin yet! Oh, make it NOT so......

[Kelly]

Can anyone tell me where to find the real unemployement numbers? I know the guess on illegals in the US is around 12 million and I assume they have an unusually high level of employment, or did.
I also assume that they lose jobs pretty quickly in a downturn.
So when the total jobs lost is in the low millions these people could easily double that.

[Wendell]

Pretty soon, even Peggy Noonan will be able to notice.

[MattYoung]

We don't see it yet in Fresno County. CA where the unemployment rate can be as high as 11% in normal times, less than what it is now.

Lately our twin pillars of the economy have been housing and the associated rise in local government employment. The latest version of bubble dropped unemployment down to abnormal levels in this farm economy. We will return to doing what we do best, farm, but Obama may have us give up farming in favor if high speed rail. Can we ship tomatoes on high speed rail?

[tedb]

Matt Young,
Yes, we can. :-)

[Ken Houghton]

Neal - It's not a Berkeley thing. After all, the Minneapolis Fed declared you to be incorrect. (http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=4062)

That, of course, is why Gary Stern would make a great replacement for Geither at the NY Fed (op. cit. WSJ editorial today, which also pushes David Malpass for the job [but I ranted about that already at AB]): http://online.wsj.com/article/SB122843659214281369.html?mod=djemEditorialPage).

/snark off, but the links are worth checking if only for their demonstration that CR is wrong to expect the possibility of admission of ineptitude or responsibility.

[Neal]

Ken: First paragraph of conclusion of Minneapolis Fed paper (10/08)....
----------
Our analysis has raised questions about the claims made for the mechanism whereby
the financial crisis is affecting the overall economy. We emphasize that we do not dispute
that the United States is undergoing a financial crisis and that the United States economy may currently be in a recession or may experience one in the near future, perhaps even a very deep one.
--------

Translation, "It'll possibly be very bad, but we don't know why it happened."

Raises my confidence.

[Carter Russell]

I lost my job (and health insurance) 2.5 years ago, laid off at age 50. I have not worked since. For personal reasons (stupid pride, it's a long story), I refused to apply for unemployment benefits.

Two people who were 55 when laid off at the same time qualified for "early retirement."

None of us were ever counted as unemployed, though we would all three still be working if we had not been laid off. We were part of a sizable layoff, so I'm sure others also went uncounted.

[bakho]

There is a "perfect storm" of multiple events acting at once. The auto woes are a result of the oil shock and are exacerbated by inability to finance new cars.

During the 2001 recession, Bush gave tax cuts to the financial investor class which was already awash in too much investment capital. This created a financial bubble that masked the underlying problems with the economy. Bush did nothing to raise wages or directly stimulate jobs.

Greenspan lowered interest rate without adequate regulation so the economy crept slowly forward on the unstable quicksand of irresponsible borrowing and lending.

Rather than stimulus policy to increase money going to the poor and middle class, Bush and the Republicans blocked efforts at redistribution and allowed consumers to get in over their heads. Eight years of underpayment compounded by mountains of debt to repay is a difficult legacy to unwind.

[the idler]

Amity Shlaes: Huzzah! Let the creative destruction and liquidation of unfit labor and capital rip! And to think, this is just the initial "shock wave" to hit the "real" economy! The heroic "John Galts" of tomorrow will presently come to the fore, if we can only BE PATIENT and restrain ourselves from imposing, out of sense of mistaken "good intentions," Stalinist "New Deal" trammels on free market mechanisms!

[JC]

How many jobs have been created/lost, since Bush was inaugurated, til now?

I saw a figure that since September 2008, that the jobs created - lost, was around 4.3 million created. Obviously, with the revision in September, the October and November numbers, this might be down to 3.5 million now.

With December and January still to go, might it be possible, that the number of jobs created - number of jobs lost, during Bush's term, is actually going to be under 3 million created? Weren't 23 million jobs created during the Clinton administrations?

If this is correct - and I could easily have wrong figures, this is from memory - this is one of the worst periods ever - ESPECIALLY if considering the increase as a percentage of the relevant populations?

[christofay]

Let's get this straight. One of the reasons that Greenspan cut the fed rate to 1% was to benefit Bush. Bush was going to be an extremely unpopular one-termer until Osama gave him that gift; the PNAC crowd was gaming for it. All functions of the govt are political, Greenspan cut the rates to the 1 to goose the economy to give Bush a lift. It was a one man job program.

That is all.

[Marcus]

We're losing ground on our phony economy. We're broke! As nations and as individuals. There's going to be a lot of pain before it gets better. We're going to have to turn our shopping malls into factories, and that's going to take some time.

Start producing quality products that people want abroad, less service firms, more savings, only then will we get back to wealth.

Thank you for the fun ride, but this train is stopping whether we want it to or not.

[Marcus]

We're losing ground on our phony economy. We're broke! As nations and as individuals. There's going to be a lot of pain before it gets better. We're going to have to turn our shopping malls into factories, and that's going to take some time.

Start producing quality products that people want abroad, less service firms, more savings, only then will we get back to wealth.

Thank you for the fun ride, but this train is stopping whether we want it to or not.

[Marcus]

We're losing ground on our phony economy. We're broke! As nations and as individuals. There's going to be a lot of pain before it gets better. We're going to have to turn our shopping malls into factories, and that's going to take some time.

Start producing quality products that people want abroad, less service firms, more savings, only then will we get back to wealth.

Thank you for the fun ride, but this train is stopping whether we want it to or not.

[Jonathan King]

OK, so the most amazing thing about the jobs number released yesterday wasn't the number itself, but the fact that it apparently fell completely outside the range of the *73* economists consulted by Bloomberg ahead of the announcement. Nobody predicted a number that bad. This concerns me because it leads credence to my pessimistic belief that we have no idea what is really going on with the economy these days. Or, am I missing something?