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Friday, June 7, 2013

I Love the Chicago Fed.. Today..


How Many Jobs Do We Need a Month to Accommodate the Growing Population and Reduce the Unemployment Rate?


In an article published yesterday in the Global Economic Intersection blog 
(and several other outlets),  Daniel Aaronson, vice president and director of microeconomic research, and Scott Brave, senior business economist, at The Federal Reserve Bank of Chicago, have validated my claim that we need many thousands of jobs a month fewer to provide for a growing population than most economists claim due to changing demographics.  They believe we now need about 80,000 jobs a month:



I had calculated last fall that we needed about 65,000 jobs to reduce the unemployment rate and accommodate the growing population due to changing demographics.  They used much more sophisticated methods than I used and they went into Census estimates and discussed the possible influence of immigration (which I didn't), but I'm pleased that somebody with some authority is looking at things the same way that I am. 

Over the past few years, since we started a fairly sluggish recovery from this miserable recession, the "pundits" have been complaining and complaining more that we are not generating enough jobs to "accommodate population growth".  Most pundits believe we need at least 125,000 and some people even conjecture that we need 200,000 due to population growth.  I've always felt that was wrong (as I explained in the above linked article) because almost all of the growth is occurring among the oldest age groups as people age into those older age groups, and those older people are in the labor force in lower percentages than younger people.

Let's get one thing straight, however.  We still have a huge jobs deficit that is only slowly being erased.  But what the Chicago Fed report indicates is that it will probably take us less time to erase that jobs deficit.  When we add more than 80,000 jobs a month, those extra jobs reduce the jobs deficit.  We don't need 150,000 jobs a month to reduce the jobs deficit.

Chicago..

I'm sure that at least one or two illogical people will contend that those guys are from the Chicago Fed, and, as they are from Chicago and are part of the government, the fix must be in and they are trying to make bad data look good and "all those Chicago guys stick together".  Sure.  That just has to be it.  (Yes, I'm being sarcastic right there.)

1 comment:

  1. I don't know what drives you other than I believe you are a staunch believer in liberal causes. We have the worst recovery to a recession since the great depression, and yet you continue in article after article to put a rosy spin on any and all data regardless of the facts. You continue to ignore the drop in the labor participation rate and brush it aside as a change in demographics, though demographics cannot explain the sudden change but only a slower gradual change.

    Are we really to believe that 2008 was a turning point in America and suddenly, make that rapidly so many more Americans entered the baby boomer age and so many more Americans entered the going to college age .... both at the same time mind you, that it caused about a 2% drop in labor participation and has remained at about that level now for more than four years. That makes no sense.

    I pointed out a month ago that statistics show that the birth rate remained steady during the baby boomer birth decades, that school enrollment rose at the same rates during the Bush and Obama administrations, and yet you ignore facts and stubbornly push the change in demographics mantra in light of facts to the contrary. What's most troubling about this is that few things change if we ignore or deny they even exist. If you, and the rest of the very compliant liberal news media held this administrations feet to the fire, the American people might just get up enough outrage over his poor job performance, that this administration might just be forced into actually doing what's good for the economy regardless of whether it fits his liberal vision of America. Patting themselves on the back with the help of you and others like you month after month when jobs numbers come out that show a falling unemployment rate, and yet ignoring the reality that food stamp recipients under Obama are up more than 46%, does nobody any good but this administration. If most of the drop in labor participation as you claim Molly, is not need but rather want driven, why the nearly 50% rise in food stamp participation? Do you think that maybe the nearly 10 million missing from the labor market might be now receiving food stamps? That doesn't sound so voluntary to me.

    Many of those that retired had to retire because they couldn't find a decent job, and many of those that went back to school did so because they couldn't find a decent job ..... many in both groups are hurting and so supplement school and retirement living with food stamps. And in addition studies show that as many as 50% of all the jobs created in this weak recovery have been low wage jobs that replaced living wage jobs, hence the need for more food stamps.
    Spinning this administrations dismal recovery doesn't make it better, if anything it prolongs true change for the better.

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