Making News: Economy Views Quoted in The Guardian & on Breitbart!

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Breitbart.com, Jobs, jobs report, John Carney, manufacturing, NFP, The Guardian

I’m pleased to announce two recent media appearances.  The first came on June 23, when the United Kingdom’s The Guardian newspaper’s survey of “What the experts” were saying about some major reports on manufacturing featured a tweet of mine on the subject.  Here’s the link.

The second came this morning, when Breitbart.com‘s John Carney spotlighted my views on the monthly U.S. jobs figures (for June) that were released today.  Click on this link to read.

And keep checking in with RealityChek for news of upcoming media appearances and other developments

 

(What’s Left of) Our Economy: U.S. Manufacturing’s Jobs Recovery Continues Strongly

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automotive, CCP Virus, coronavirus, COVID 19, exports, Jobs, manufacturing, NFP, non-farm jobs, non-farm payrolls, private sector, services, Trade, Wuhan virus, {What's Left of) Our Economy

The big question raised by today’s second straight expectations-clobbering official monthly U.S. jobs report (for June) is whether the surge in recovered employment can withstand whatever second CCP Virus wave of infections, or resurgence of the first wave, numerous states have been seeing lately.

I can’t answer that knowledgeably – and I suspect few others can, either. What I can do is note that the June numbers roughly repeat or confirm some of the patterns visible for May. Mainly, manufacturing held up better than the rest of the American jobs market, and within manufacturing, the swings have been dominated by the automotive sector.

Domestic industry added a net 356,000 workers to its payrolls in June, and revisions for the last two months – as with non-farm jobs as a whole (the U.S. government’s jobs universe) – were slightly positive (virtually unchanged at a 1.32 million net loss for April, upgraded from a 225,000 to a 250,000 net gain in May).

Fully 55 percent (195,800) of those 356,000 new June manufacturing jobs came in the automotive sector – a rubber band-like comeback surely reflecting the outsized hit this industry has taken since the CCP Virus threw the entire economy into a deep downturn. Even with this improvement, since February, combined vehicle and parts employment is down more than twice as much relatively speaking (12.11 percent) as overall manufacturing employment (5.89 percent).

Further, overall manufacturing’s record of pandemic-era resilience continued in June. Its monthly jobs growth was only 3.03 percent – slower than the rate for the total non-farm sector (3.61 percent) and the private sector (4.27 percent).

But a main reason is that manufacturing has taken a much smaller CCP Virus hit than the rest of the economy. That 5.89 percent employment loss since February has been considerably less than that of the non-farm sector (9.62 percent) or the private sector (10.17 percent).

Manufacturing employment could face some intriguing crosswinds in the months ahead. A second virus wave or a re-strengthening first wave may well slow its jobs rebound going forward, since U.S.-based industry sells so much to those domestic service industries that have borne the brunt of the pandemic-created economic damage. At the same time, domestic manufacturers were selling just under 18 percent of their gross output overseas as of the end of last year, so if recoveries quicken overseas, U.S.-based manufacturers and their workers could benefit significantly.

In this vein, one possibly hopeful sign is that as of May, according to this morning’s monthly U.S. trade report from the Census Bureau, manufacturing exports are down a whopping 15.74 percent year-to-date. And they fell 5.28 percent in May alone. Therefore, precisely because the “comps” have been so lousy, domestic manufacturers could experience something of a rubber-band-like bounceback of their own – at least in the near-term future.

Making News: New IndustryToday Article Spotlights Recession Jobs Winners & Losers in Manufacturing

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automotive, CCP Virus, coronavirus, COVID 19, IndustryToday.com, Jobs, Making News, manufacturing, recession, Wuhan virus

I’m pleased to announce that my latest freelance article has just been published on the IndustryToday.com news site.  Titled, “U.S. Manufacturers Hold the Jobs Fort – So Far,” it both reports in detail which domestic manufacturers have performed best and worst on the jobs front during the CCP Virus-induced downturn, and shows how relatively well overall manufacturing payrolls have held up.  Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: A Rosier May U.S. Jobs Picture – Including for Manufacturing

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CCP Virus, coronavirus, COVID 19, Jobs, Labor Department, manufacturing, nonfarm jobs, private sector, reopening, Wuhan virus, {What's Left of) Our Economy

As of this morning’s stunning U.S. employment report from the Labor Department (for May), it looks like I’m wrong on the strength and speed of the recovery from the nation’s CCP Virus-induced recession. And I couldn’t be happier. (See here for my most recent forecast.)

What’s also critically important to note is that the announcement that the economy last month created a net new 2.51 million jobs over April’s levels seems to belie warnings that reopening the economy sooner rather than later would bring disastrous public health consequences – even with considerable social distancing, mask-wearing, and other protective measures. But the economic shutdowns began to be lifted in late April, and here it is early June, and no new spikes in virus infections, hospitalizations, and deaths have been recorded.

Further, strong reasons can be cited for believing that payrolls improvement will continue, at least until the arrival of a notable second wave, assuming one’s coming. For as usual, the May jobs report is based on the mid-month situation. One possible cause for concern, though: The response rates of the businesses and households surveyed remain lower than they were before the pandemic struck. So it’s possible that considerable economic distress is being missed.by the Labor Department’s canvassers.

All the same, let’s not pretend that the employment picture is anywhere close to good or even acceptable. The unemployment rate remains at an horrendous 13.3 percent, and non-farm payrolls (the Labor Department’s definition of the U.S. jobs universe) are still down by fully 17.67 million year-on-year.

Moreover, the new upswing is starting from a lower baseline than originally reported, for March net jobs losses are now pegged at 1.37 million, not the 701,000 first estimated, and April’s decrease has been revised from 20.50 million to 20.69 million.

Just for comparison’s sake, job losses during the Great Recession that followed the 2007-08 financial crisis totaled 8.69 million (from December, 2007 through February, 2010). And pre-recession employment levels weren’t regained until May, 2014. The very speed and strength of the latest jobs nosedive could mean that the employment recovery will be notably faster – as perhaps indicated by this morning’s data. But there’s also much more ground to be made up.

Interestingly, the CCP Virus impact on manufacturing remains smaller than on the rest of the economy. True, on a percentage basis, industry’s month-to-month jobs comeback (225,000 in absolute terms) was less on a percentage basis (1.96 percent) than that of the private sector overall (2.86 percent) – although slighly higher than that of the total economy (1.92 percent, a figure that of course includes hard-hit state and local governments).

But that’s partly because the manufacturing payrolls slump has been somewhat milder. The sector’s March employment losses have been upwardly revised from an originally reported 18,000 to 46,000. But last month’s initial April estimate of a 1.33 million jobs decline is now judged to be a slightly better 1.32 million.

Since February, therefore, whereas the total economy has shed 12.82 percent of its payrolls and the private sector 13.87 percent, manufacturing employment is off by 9.78 percent.

Let’s not be pollyannish, though. From its pre-Great Recession level to the trough, manufacturing lost 2.293 million jobs. And even at their peak during the pre-virus recovery (last December), only 61.71 percent had been regained.

That is, thanks to the CCP Virus, both the U.S. economy overall and its manufacturing sector remain awfully sick on the employment front.

Making News: New Daily Caller Piece On-Line on the CCP Virus and the Economy

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bankruptcies, CCP Virus, consumers, coronavirus, COVID 19, DailyCaller.com, deflation, economy, exports, Im-Politic, Jobs, manufacturing, public health, real estate, recession, recovery, rent, reopening, restart, restaurants, retail, small business, testing, travel, unemployment, vaccines, Wuhan virus

I’m pleased to announce that my latest freelance article has just been published on the popular DailyCaller.com news site.  The title pretty much says it all:  “Don’t Expect A V-Shaped Recovery From Coronavirus,” and you can read it at this link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Picking Through the April Jobs Wreckage Details

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Employment, Great Depression, Great Recession, Jobs, Labor Department, manufacturing, NFP, non-farm jobs, non-farm payrolls, private sector, unemployment, {What's Left of) Our Economy

Today’s U.S. jobs report from the Labor Department (for April) is the first that makes fully (so far) clear the historic American employment disaster created by a combination of the CCP Virus and widespread economic shutdown and lockdown orders.

As widely observed already, the 14.9 percent national unemployment rate for the month is the highest suffered since the Great Depression of the 1930s. During this slump, (which, it can never be forgotten, helped pave the way for World War II), the annual jobless rate peaked in 1933 at 24.9 percent. Moreover, as always with these monthly jobs releases, the data only cover mid-month. So the May report will almost surely bring considerably worse new April revisions, just as the April report showed sharp downward revisions for March and even February.

Worse, as the Labor Department employment trackers observed, in April they were able to reach only about 70 percent of the number of households they tried contacting in their standard efforts to calculate that unemployment rate. They pre-virus response rate was 83 percent. And although it’s entirely possible that this weak response rate has overestimated unemployment, it could be producing an underestimate, too.

That big uncertainty aside, the revisions are a good place to start highlighting how the details of today’s numbers underscore what an unprecedented shock the economy is absorbing.

Principally, that March total plunge in non-farm payrolls (NFP, the Labor Department’s U.S. jobs universe) was first reported at 701,000 – a figure that was (sadly) exceeded four times during the Great Recession that followed the 2008-09 financial crisis. Now these March losses are pegged at 870,000 – much higher than the Great Recession peak of 784,000 in January, 2009. April, of course, has blown away such comparisons, as NFP plummeted by 20.50 million. Indeed, that’s the largest monthly decrease in absolute terms in the history of these Labor Department data, which go back to 1939.

As a result, U.S. employment levels are back to where they were in February, 2011 – meaning that more than nine years of jobs gains have just gone up in smoke.

In fact, those 20.500 million net jobs destroyed in April alone (again, this is a preliminary number, which will be re-estimated twice more in the next two months, and then again when Labor issues the next of its standard multi-year revisions) represent more than twice as much employment loss as that experienced during the entire Great Recession (whose jobs dimension lasted from December, 2007 until March, 2010) – 8.698 million.

As for the private sector, the initially reported March jobs collapse of 713,000 was topped five times during the Great Recession. But this morning’s new March jobs wipeout figure of 812,000 now matches that recession’s worst (hit in April, 2009). Tragically, the new April private sector job loss figure of 19.520 million makes even those dreadful numbers look positively quaint.

Oddly, even though its April monthly job loss was 1.33 million, manufacturing has continued to hold up relatively well so far during the CCP Virus crisis. Industry’s March payroll decline was revised down from 18,000 to 34,000. And the April figure was much worse than manufacturing’s worst month during the Great Recession (289,000, recorded for January, 2009). Moreover, the 1.330 million April manufacturing employment nosedive was more than half of the total manufacturing job decrease during the entire Great Recession (2.293 million).

All the same, since February, whereas total U.S. job totals are off by 14.02 percent since February, and private sector employment has fallen by 15.70 percent, manufacturing’s drop has been 11.87 percent.

Once more, this relatively bright picture could change either with next month’s NFP report, or relatively quickly thereafter, as the economy reopens. But it’s also important to keep in mind that the pre-Great Recession total U.S. employment peak of 138.392 million in December, 2007 wasn’t matched again until May, 2014. It took until March, 2014 for the private sector to regain its pre-recession employment peak of 116.060 million. And manufacturing has never regained its pre-recession level of 13.746 million – which itself was far from a peak, because its payrolls had been decreasing for decades. The best it did was to regain 1.413 million (61.62 percent) of the 2.293 million jobs lost during the Great Recession. This level was hit just last December.

And all these recoveries were reasonably “V-shaped” (that is rapid), by historical standards. Unfortunately, “V” seems to be a letter going out of style as economists struggle to figure out what the post-CCP Virus recovery will look like.

Making News: A New Trade and Globalization Podcast Interview, and on National Radio Tonight

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America Trends Podcast, China, decoupling, globalization, Gordon G. Chang, Jobs, Larry Rifkin, Making News, manufacturing, supply chains, The John Batchelor Show, Trade

I’m pleased to announce that a podcast interview focusing on my views on trade, globalization, and the U.S. economy went on-line yesterday.  The interview, conducted by veteran talk radio show host Larry Rifkin for his America Trends Podcast, was conducted in late January, so the CCP Virus was just becoming a headline issue.  But I think you’ll agree that the analysis of major problems with U.S. trade policy, why they’ve emerged, and how to handle the China challenge, have held up well.  Here’s the link.

In addition, today, I recorded an interview for John Batchelor’s nationally syndicated radio show for broadcast tonight.  The segment deals with the Trump administration’s announced renewed determination to bring U.S.-owned manufacturing and its supply chains out of China, and also features co-host Gordon G. Chang.

Normally, John’s shows are broadcast live, but virus conditions have prevented easy access to his New York City studio.  I don’t know exacty when my segment will air, but you can listen to the entire show on-line starting at 9 PM EST at this link.  As usual, moreover, I’ll post a link to the podcast as soon as one’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: Evidence that Trump Would Be Foolish Not to “Run on China”

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2020 election, CCP Virus, China, climate change, coronavirus, COVID 19, cybersecurity, Democrats, environment, Gallup, human rights, Im-Politic, Jobs, Joe Biden, Pew Research Center, polls, public opinion, Republicans, tariffs, Trade, trade deficit, trade war, Trump, Wuhan virus

Monday I laid out the case that presumptive Democratic presidential nominee Joe Biden has cheer-led every major Washington policy decision in recent decades that has enabled the rise of a wealthy, powerful, and worst of all, hostile and dangerous China. So it’s at least awfully interesting that the day after, a new poll was released making clear that the Trump campaign’s decision to brand the former Vice President as “soft on China” is not only on the mark substantively, but a smart political move.

The poll, conducted by the Pew Research Center, shows that Americans of all political stripes have turned into strong China critics. And especially important – there’s much more going on here than blaming Beijing for the CCP Virus outbreak. Respondents across-the-board now strongly agree that China poses a major threat to a wide range of U.S. interests – including on the trade front, where President Trump’s tariffs were widely reported to be devastating pretty much every major group of actors in the American economy, from businesses to consumers, and from farmers to manufacturers.

P.S. It’s not like Pew has ever itself shown any signs of being critical of China. Indeed, its introduction to the results includes this moral equivalence-friendly assessment: “…with the onset of an unprecedented pandemic, the stage has been set for both sides to cast aspersions on the other.”

The finding Pew emphasizes is a dramatic rise in unfavorable American views of China since Mr. Trump’s inauguration. When he entered office at the beginning of 2017 , the respondents Pew interviewed disapproved of China, but only by a narrow 47 percent to 44 percent margin. The most recent results show unfavorable ratings thumping favorable by 66 percent to 26 percent. The latest negative reviews garnered by Beijing, moreover, represent its worst such showing since Pew began asking the question in 2005.

And as Pew points out, looking at this divergence over time makes clear that China’s ratings began deteriorating long before the virus appeared. In fact, the sharpest increases in Beijing’s unfavorables and sharpest decreases in its favorables started in 2018 – when the administration began announcing and imposing steep levies on huge amounts of prospective imports from China.

Indeed, China’s image among Americans is now so bad that it’s shared among Democrats and Republicans alike. Frustratingly, the survey doesn’t measure the attitudes of declared political independents, but the latest figures show that 72 percent of Republicans and those “leaning” Republican hold unfavorable views of China, and that 62 percent of Democrats and their “leaners” agree. And both negatives are up sharply since the trade war began – or more accurately, since the United States started fighting back.

Not that trade is the only China-related concern expressed in the Pew survey, or even the strongest. Pew gauged U.S. opinion on several China-related issues, and the biggest worries were voiced over “China’s impact on the global environment.” Fully 91 percent of respondents labeled it as a “very serious” or “somewhat serious” problem for the United States, the former responses hitting 61 percent. Next came “cyberattacks from China,” rated as problems by 8 percent of those surveyed, and as “very serious” problems by 57 percent.

Coming in third and fourth were the economic issues. Eighty five percent saw the U.S. trade deficit with China as a problem, including 49 percent calling it serious. And for “the loss of U.S. jobs to China,” the numbers came in at 85 percent and 52 percent, respectively. Interestingly, those latter results nearly matched those for the issue of “China’s growing military power” (84 percent and 49 percent, respectively).

Important to note, however, is evidence that, high as they are, the economic concerns have been leveling off in recent years, while the environmental concerns have been rising (along with those centered on human rights). That’s not necessarily great news for Mr. Trump, whose focus has been on the jobs and overall economy impact (along with the technological threat from China – which is a major source of public China-related concern).

Much better news for the President – Americans aged 50 and older (whose voter turnout rates have long been high) – hold the most negative views of China. Yet this year, Beijing’s image has turned negative for Americans in the 18-29 age class for the first time ever. And for both groups, disapproval of China surged starting in 2018.

Of course, China’s not the only issue on which Americans will be voting this fall. But the latest Gallup results, for example, show that virus-related issues have surged to the top of their rankings for the “most important problem facing the U.S.” If the President can link the virus with the overall China challenge in voters’ minds, his odds of reelection would seem to be pretty good. His biggest obstacle? Possibly the companion Gallup finding that right behind the virus on the list of national problems is “The government/poor leadership.”

(What’s Left of) Our Economy: A Great Recession-Like Jobs Report

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BLS, Bureau of Labor Statistics, CCP Virus, Employment, Great Recession, Jobs, manufacturing, nonfarm jobs, private sector, {What's Left of) Our Economy

Since this U.S. economic nosedive is, as the Monty Python crew liked to say, “completely different,” this post will depart from its usual format, too – by trying to provide some perspective on today’s horrendous (March) employment report from the Bureau of Labor Statistics (BLS). Unfortunately, this perspective isn’t terribly comforting. 

First, three reminders:

>The insanely astronomical number of jobless claims applications filed in the last two weeks make clear that at least in the near future, the employment situation will become much worse. Specifically, these claims numbers have totaled some 10 million in the last two weeks alone. That’s 7.75 percent of the entire private sector workforce as of the March figures.

>Similarly, as with all the monthly U.S. jobs reports, the March number described the situation only as of mid-month. Most of the economy and broader American CCP Virus-related shutdown measures were mandated or suggested afterwards.

>And in this vein, this morning’s March data were only preliminary. They’ll be revised twice more in the next two months, and then the full-year 2020 results will be revised. Indeed, the job creation figures for January and February (which were still decidedly strong) were downgraded by 57,000 in all.

Having cleared away that brush, it’s still interesting to note that, however terrible the new numbers are – and however terrible-er they’re bound to get – so far the March jobs meltdown hasn’t been as bad as the monthly nosedives suffered during the Great Recession. But it’s already way too close for comfort.

Whereas total nonfarm jobs (the BLS’ U.S. jobs universe) fell on month in March by 701,000, during the previous decade’s punishing downturn, that figure was topped no less than four times, and peaked at 784,000 in January, 2009.

Moreover, no sequential employment growth returned till that November, and it hit just 12,000. Worse, the very next month, payrolls sank by 269,000. The bottom was finally hit in February, and jobs growth recovered slowly afterwards, in fits and starts. Year-on-year employment gains didn’t reemerge until September.

As for private sector jobs, last month’s 713,000 collapse was exceeded during the Great Recession five times, with the worst results coming in April, 2009 (when 812,000 jobs were wiped out).

Private sector employment bottomed in February, 2010, too, and also rebounded sluggishly unevenly, with year-on-year gains coming only in August.

All told, 8.698 million jobs were lost from the onset of the Great Recession (December, 2007) to that February, 2010 trough. For the private sector, the losses totaled 8.794 million. Both figures are alarmingly close to the sum of the last two weeks’ jobless claims.

Interestingly, manufacturing jobs fell by only 18,000 sequentially in March. And on a yearly basis, they’re actually up by 12,000.

But since so many customers for American manufacturers are the workers who are being sidelined, and their former employers who are closing their doors or scaling their operations way back, these numbers, too, are bound to skyrocket.

Will a recovery in manufacturing and overall employment come even as quickly as after the Great Recession (which, again, wasn’t so quick)? Because this slump really is so “completely different” due to its biological origins, that’s the $64,000 Question. Given that a virus second wave is distinctly possible before vaccines or cures are ready, and given that normality as a result is only likely to return slowly to any business or consumer activity that requires close person-to-person proximity, there’s room for plenty of doubt.

 

(What’s Left of) Our Economy: The (Dangerously) False Choice Between the Virus and a Restart

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Angus Deaton, Ann Case, Big Business, CCP Virus, coronavirus, Deaths of Despair, growth, Jobs, lockdown, public health, shutdown, small business, stress, The New York Times, Thomas L. Friedman, Trump, unemployment, Wuhan virus, {What's Left of) Our Economy

And here I thought that Americans were starting to understand that defeating the CCP Virus and thus protecting public health on the one hand, and restarting economic activity as soon as possible on the other, are not sharply conflicting imperatives. They’re mutually reinforcing – including for public health reasons. Silly me.

One sign was this column by The New York Times‘ Thomas L. Friedman – not someone who’s career-defining predictions and analysis (like the always beneficial and inevitable expansion of economic globalization) have stood up real well. All the same, as one expert quoted by Friedman observed:

“Income is one of the stronger predictors of health outcomes — and of how long we live. Lost wages and job layoffs are leaving many workers without health insurance and forcing many families to forego health care and medications to pay for food, housing, and other basic needs. People of color and the poor, who have suffered for generations with higher death rates, will be hurt the most and probably helped the least. They are the housekeepers in the closed hotels and the families without options when public transit closes. Low-income workers who manage to save the money for groceries and reach the store may find empty shelves, left behind by panic shoppers with the resources for hoarding.’’

P.S. – This expert is a noted public health authority, not an economist callously focused on money and output.

If you still doubt how worsening economic fortunes can literally be a large-scale killer, check out the work of the husband-wife team of Angus Deaton and Ann Case. Yes, they’re economists. But since 2015, these Princeton University scholars have been documenting how deteriorating well-being has helped fuel an historic rise in mortality among middle aged, working class whites. This year, they’ve published the results of their research in a book (appropriately) titled Deaths of Despair. Serious health problems with economic roots have been identified among African Americans as well.

Nonetheless, President Trump’s statement yesterday setting a target date of Easter (April 12) for restarting economic activity was greeted by a howl of protests accusing him of ignoring public health experts’ pleas, and placing his reelection hopes (which, the argument goes, depend almost exclusively on his economic policy record) over the lives of [FILL IN YOUR FAVORITE NUMBER] of Americans. Could anything be eviller?

There’s a counter-argument of course, at least in theory: Cash payments to workers could keep their incomes up and address these economy-related health threats even as most of the economy remains closed. The problem, though, is that without support for business (especially smaller companies, which are big employers collectively but often lack big cash cushions or access to affordable credit even in the best of times), massive payments could (which would be needed as long as workers have regular bills to pay) last a lot longer than the current health emergency because many such companies are likely to close for good, and leave their workers in the lurch, if they don’t start regaining customers fast.

Moreover, these small business vulnerabilities don’t exist in isolation because so many make much of their money selling to big businesses. So when the latter run into trouble because of a weak economy, the little guys – and their workers – inevitably will suffer, too.

So unless you’re a diehard Never Trump-er, and/or know absolutely nothing about the economy or Americans’ health and are unwilling to learn, you’ll recognize that the supposed choice between reopening the economy before too long (if not necessarily by Easter) and saving American lives is a false one. American policy, in other words, will have to learn how to walk and chew gum at the same time. The good news is that, as The Times‘ Friedman and others have noted, any number of approaches are available to achieve the best of both worlds that the nation urgently needs.