Today everyone will be wading through the Bureau of Labor jobs report. Calculated Risk will patiently explain once again why it's possible to have a net job loss (-20,000) while the actual unemployment rate went down (from 10% to 9.7%). He will explain the seasonal adjustment which is so crucial in calculating the January numbers. Mish will break it all down, talking about the continuing Birth/Death Model nonsense, among other statistical atrocities. So I recommend you read these folks (and other people as well) if you want to understand the jobs numbers.
If you've never visited BLS.gov, you wouldn't believe the swamp of the opaque crap that underlies the "headline" unemployment number. I can't make myself wade through it today. As Empires decline, bureaucracies run wild.
There was another story published on the BLS' website that I'd like to share with you, called Recession leads to lackluster employment in the trucking industry. Unlike the jobs report, this story was crystal clear.
You can see that employment in truck transportation has yet to rebound. It's downhill all the way. Trucking jobs depend on consumer spending. This is just commonsense.
Employment in trucking generally follows the larger business cycle. Consequently when the demand for goods is stifled, the call for freight services is likewise sluggish. A dramatic slowdown in consumer demand has been crippling the Nation's trucking firms, making job losses during the current recession worse than at any time since the series began in 1990...
One can also view trends in trucking employment as consumer driven. (See chart 4, reproduced below.) Consumers are struggling with stretched credit and a distressed housing market and are thus limiting discretionary spending, which for retailers translates into fewer sales. In real terms, retail sales figures were essentially flat throughout 2009.As sales slow, inventories rise; hence, there is less need for the shipping services used to transport finished goods. Trucks then sit idle.
What's going on here? Authors Emily Richards and Frank Conlon say nothing about retail sales going up while trucking jobs are going down. In fact, they say retail sales were "essentially flat" in 2009. That orange line doesn't look flat to me.
Businesses are selling more out of inventories, and these stocks, which provided such a dramatic boost to GDP in the 4th quarter of 2009, are still falling. (There was a decrease in the sell-off rate in business inventories, see Less Bad Is Still Bad.) If you're selling off your inventory, and not ordering more stuff, that might explain the discrepancy between retail sales and trucking jobs. There's no need to move stuff around if businesses are selling what they've got in the warehouse.
But if retail sales are going up, why then are businesses not ordering more stuff? It would seem that businesses do not anticipate a surge in demand anytime soon. What a tangled web we weave...
Maybe the discrepancy between retail sales and a depression in the trucking industry reflects those vaunted increases in worker productivity.
The good news: Worker productivity is helping companies and the U.S. economy recover. The downside, especially for the unemployed: Productivity is almost too strong.
This so-called productivity paradox will be in focus Thursday, when the Labor Department is expected to report a seasonally adjusted, annualized 7% gain in fourth-quarter nonfarm business productivity.
What is remarkable isn't just that the 7% pace is nearly triple the annual average of 2.5% productivity growth from 2000 through 2008, but that the jump comes on the heels of an 8.1% gain in the third quarter and a 6.9% increase prior to that.
Productivity often accelerates as the economy is emerging from recession. Companies squeeze more output from their pared-back staffs before eventually hiring workers.
That is especially true now, as growth in gross domestic product has returned with surprising speed but hiring has proven much more anemic.
Perhaps we have a huge boost in Trucker Productivity. That would certainly explain why nobody is hiring truckers. Perhaps working truckers are driving even faster than they usually do ... or they just don't sleep anymore, implying that methamphetamines sales are going through the roof. That's a plus for the economy, if not in the actual drug sale, then in the increased spending by drug dealers. It's not called the "dismal science" for nothing.
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