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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Jobs/Unemployment
January 10, 2014 at 10:17 AM

Vote: The economy in 2014

It’s a tough day to ask for your prediction for the new year. December saw only 74,000 jobs added to U.S. payrolls, far below what is needed merely to keep up with the natural growth of the labor force (around 125,000). Worse, it brought the average monthly growth for the year to 182,000 vs. 183,000 in 2012.


Comments | More in Jobs/Unemployment | Topics: 2014 predictions

November 6, 2013 at 10:45 AM

Minimum wage: Today SeaTac, tomorrow the nation?

Well, no. If the trend holds and SeaTac voters approve a $15-per-hour minimum wage, it will be very hard to translate this victory into a national movement.

SeaTac is a tiny municipality with only 12,000 registered voters. It has a large number of low-wage restaurant and hotel businesses that are captive to their proximity to Seattle-Tacoma International Airport. They will have little choice but to pay the new wage.

For that same reason, SeaTac won’t likely be a useful laboratory to examine the unintended consequences that critics warned about, or the benefits that supporters claim.

Enacting the wage in a city such as Seattle would be much more difficult, even though Mayor-elect Ed Murray has paid lip service to it. Business community resistance would be fierce and potent. And businesses would have more options: Move, close, cut back hours and refuse to hire the least-skilled workers.


Comments | More in Inequality, Jobs/Unemployment | Topics: minimum wage, SeaTac vote

October 29, 2013 at 10:07 AM

Six key signs to watch for job improvement

Earlier this month, Mary Daly and Bart Hobijn of the Federal Reserve Bank of San Francisco published a paper examining the unemployment situation. It was not quite as gloomy as one might expect.

After looking at 30 economic indicators, they argue that six are most important to predicting whether the labor market is healing: The insured unemployment rate, initial claims for unemployment benefits, capacity utilization, the jobs gap, the Institute for Supply Management (ISM) manufacturing index, and private-payroll employment growth.

The “jobs gap” comes from the Conference Board and measures the percentage of households that say jobs are easy to get vs. those that say they are difficult to land.

In general, according to Daly and Hobijn, the six are doing well and might point to better conditions ahead.


Comments | More in Jobs/Unemployment

October 24, 2013 at 11:09 AM

Slight improvement: 2.9 workers for every job

Economists pay close attention to the Job Openings and Labor Turnover Summary from the U.S. Bureau of Labor Statistics. The so-called JOLTS report gives the clearest indication of how many job-seekers are chasing the available positions. The August report came out this morning, and shows that for the first time in five years the ratio is below 3 to 1. It’s not much of an improvement, but 2.9 people are seeking every available job.

According to labor economist Heidi Shierholz of the Economic Policy Institute, the August numbers overstate the improvement because at least 5 million have dropped out of the workforce because of the weak economy. “These “missing workers” are thus not counted as unemployed, but many will become job seekers when a robust jobs recovery finally begins, so job openings will be needed for them, too.”

Not only that, but the ratio is nearly as high as the worst month of the 2001 recession. And no sector has as many or more openings as unemployed workers. “There are between 1.3 and 9.8 times as many unemployed workers as job openings in every industry.”


Comments | More in Jobs/Unemployment | Topics: federal employment, Job openings

October 22, 2013 at 10:28 AM

Why the jobs report is scary

The government’s report on September employment came out today, delayed by the shutdown. Although late, it is valuable because it gives us the last snapshot of the economy before the costly effects of House Republicans closing the government and playing chicken with national default. In other words, jobs reports for the rest of the year will not be better and are likely to be far worse.

The 148,000 net new jobs created were little more than the 125,000 or so needed to keep up with the natural growth of the labor force. Not only that, but the third quarter saw a significant deceleration in job creation. In the first quarter, payrolls rose an average 207,000 per month, including 211,000 in the private sector (government austerity continued to hurt the public sector). That slowed to an average 182,000 in the second quarter.

With September’s data, the third quarter shows the monthly average at 143,000. Not only that, but private-sector hiring dropped to an average 129,000.


Comments | More in Jobs/Unemployment | Topics: unemployment

September 19, 2013 at 9:58 AM

Did that recovery feel good? Sorry it was so brief

We shouldn’t be too complacent about the rise in Seattle unemployment to 5.2 percent in August from 4.8 percent the month before. True, one month does not a trend make and there’s always “noise” in data. But, as the Seattle Times’ Amy Martinez reported, the metro area’s joblessness hasn’t risen four-tenths of a percentage…


Comments | More in Jobs/Unemployment | Topics: Seattle economy, unemployment

September 9, 2013 at 10:35 AM

Yes, the August jobs report was that bad

Friday’s jobs report was bad. Forget the unemployment rate falling to 7.3 percent in August from 7.4 percent in July. That was mostly the result of 312,000 people dropping out of the labor force. Labor force participation is its lowest since 1978, and while economists are divided on why it is happening — baby boomers retiring, people going on disability or staying in school, discourged workers who have stopped looking for a job — it is almost certainly not a healthy sign. There aren’t enough job openings. Most boomers are horribly prepared for retirement. This is a metric that almost certainly points to a lack of good jobs and slower growth.

The 169,000 jobs added must be measured against the 125,000 or so needed just to keep up with the natural growth in the labor force. Net new job growth has slowed since earlier in the year. Slipped into Friday’s report were revisions cutting the number of jobs added in June and July. Government jobs overall continue to be slashed, a stark contrast to other recoveries and a huge headwind for this one. Most jobs are being created in low-wage sectors. Part-time work is rising (and no, not mostly because of Obamacare).

The “jobs gap,” what is needed to get us back to 2008 employment levels, continues to be disastrous. See for yourself in the Hamilton Project’s calculator. There’s no end in sight to the jobs crisis.


Comments | More in Jobs/Unemployment | Topics: unemployment

August 1, 2013 at 10:47 AM

Behind the fast-food protests

Picketing to highlight low-wage fast food jobs and so-called wage theft are set to intensify today in Seattle, including a 4:30 p.m. demonstration at Westlake Park, according to the group Working Washington. Thousands of workers in New York and the Midwest have held one-day strikes this week and picketed such chains as McDonald’s, Burger King, Subway, KFC and others,  seeking a $15 an hour wage instead of minimum wage or little better.

It’s not a surprising development considering the weak recovery, high unemployment, rising inequality and the large number of jobs in the restaurant industry — rising much faster than most other employment sectors — many of them paying low wages:



Comments | More in Jobs/Unemployment | Topics: fast food strikes, Wages, Working Washington

June 11, 2013 at 10:22 AM

Household wealth still far from recovery

Four years after the official end of the recession, the average American household has recovered only 62.8 percent of the wealth it lost in the crash. The findings come from a new report by William Emmons and Bryan Noeth at the Federal Reserve Bank of St. Louis. That’s in real dollars. All household net wealth has rebounded 114.3 percent from the trough to a record high, but it doesn’t account for inflation or increased population. Adjusted for these factors, the number is well below where it stood in 2006. And the recovery is highly uneven, mostly benefiting the better off with the stock-market boom and saving the big banks.

According to the Fed’s Survey of Consumer Finances, household finances were “severely” affected by the downturn. Median household wealth dropped 39 percent. Among those worst hurt were the young, those with less than a college education, minorities and those carrying heavy debt. With wages largely stagnant, wealth was increasingly dependent on housing, which was in a bubble. In a separate essay by Emmons and Ray Boshara, the importance of household balance sheets to the larger economy is explained. This element was largely discounted by many macroeconomists before the collapse.

It has come as somewhat of a surprise, therefore, that many economists now are calling the Great Recession of 2007-09 a “balance-sheet recession” and that balance-sheet failures of the type described above are seen as important contributors to the downturn and weak recovery.


Comments | More in Consumer spending, Debt, Demographics, Great Recession, Housing, Inequality, Jobs/Unemployment

May 29, 2013 at 10:29 AM

The economy this summer

Laying down some markers to watch now that Memorial Day has passed and summer is almost upon us:

Will the recovery hold and expand? Housing prices are finally making a solid move upward. Consumer confidence is at a five-year high. They’re also taking on more debt again. This morning’s correction notwithstanding, stock prices are surging. Banks recorded their best profits on record. Some of the worst outcomes haven’t happened — a double-dip, eurozone contagion and war on the Korean peninsula. All this translates into a widening of the very slow recovery. On July 31st, the government will release its second-quarter gross domestic product report. Unfortunately this will contain revisions that make the economy seem to be growing faster than it is. The best metric of the strength of the recovery will continue to be unemployment. Eleven million Americans are still without jobs and although corporate profits are at a record, hiring has been fairly weak.

Will the stock market keep rocking? Stocks have been a good investment, especially in companies that came through the recession with healthy balance sheets. And where else could investors put their money with the pitiful returns from fixed-income? The big question is how long the run can last. You’ll find predictions across the spectrum. Average investors are just bystanders in this drama. With high-speed trading and huge institutions driving the action, even small macro warnings might trigger at least a modest correction. The big enchilada will be…

What does the Federal Reserve do? The Fed’s QE-eternity bond purchases and expansion of the money base have been a huge factor in the bull run. How Fed Chairman Ben Bernanke would respond to a real recovery has been for years a hypothetical question. Now it’s becoming smash-mouth real, as in the way today’s rise in Treasury yields has tanked the market. Even though he coined the metaphor, Alan Greenspan was never willing to take away the punch bowl as the party was getting going. Will Bernanke? And if so, how will the Fed’s pivot be handled — and received by the markets. Like much since 2007, this is unknown territory.


Comments | More in Aerospace/Boeing, Banking, Boeing, Federal Reserve, Jobs/Unemployment

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