What is another 800,000 or so…
The job market lost 820,000 jobs last month. Well not exactly last month. This number included the 'adjustment of statistics' for the past year. In this column we will not get into how the government miscounts so badly. However, we will point out that it just makes the deep recession we are coming out of even deeper. Eventually we must replace all of these jobs and we have dug ourselves quite a hole to climb out of. Certainly this makes the jobs programs proposed by the Administration more likely to become law as the next phase of stimulus kicks into gear.
And certainly, the fact that there would be such a significant adjustment is one reason the stock market became so volatile this week. Thursday was particularly brutal, especially when we mixed in concerns about the debt of foreign governments. When you remove this big adjustment, the numbers for January were not all that bad. The loss of 20,000 jobs is not positive, but it still is much better than the hundreds of thousands of jobs we were losing just a few quarters ago. However, it is still a long way from recovering from seven million jobs lost. This does help by way of the fact that it takes some of the upward pressure off of rates, oil prices and other commodities, at least in the short-run
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