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March 19, 2004

3 Million Jobs Coming Soon, Economists Say

From Reuters:

U.S. Seen Adding Nearly 3 Million Jobs
The U.S. economy is gearing up to add nearly 3 million jobs by the end of next year and unemployment will drop below 5 percent by the start of 2006, a team of University of Michigan economists said on Thursday.

"We expect to see a strengthening of the jobs picture, with monthly gains in payroll employment exceeding 100,000 over the next several months and moving up from there through the summer months," Saul Hymans, one of the university's leading economic professors, said in a statement.

"Over the next two years, strong output growth and more moderate productivity increases create an improving labor market, with the payroll count finally reaching its previous peak in spring 2005," he said.

The statement was released after Hymans and colleagues Joan Crary and Janet Wolfe issued their annual spring forecast update of the U.S. economy. In the forecast, they predict employment growth of 900,000 jobs this year and 2 million more in 2005. They also said unemployment, which has cast a pall over America's economic recovery for the last two years, was seen falling from last year's 6 percent average to 5.4 percent in 2004 and 5.1 percent next year.

By the start of 2006 the jobless rate will be below 5 percent, the university economists predicted.

And yet there are those who would put the Bush Boom at risk by turning the economy over to John Kerry, who intends to rescind much of the tax cuts that fueled the economic recovery and who will have to layer on $900 billion in new taxes to keep his spending and deficit-reduction promises. Here's the statement from the University of Michigan economists - it's got more good economic forecast information that didn't make it into the Reuters story. One thing that caught my eye: mortgage rates are expected to stay low, and housing starts are expected to remain strong, through at least 2005 - and inflation is also expected to remain low. Low mortgage rates are one reason homeownership has reached a record level during the Bush Boom, and low mortgage rates are helping fuel the new-home construction industry.

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Comments

If Kerry doesn't prevent it from happening, of course, he will be more than happy to take credit for it.

Just remember where and when you saw the forecast, and who was President at the time...

Posted by: DrSteve at March 19, 2004 09:58 AM

So, uh... is Bush going to endorse this prediction?

Posted by: Gary at March 19, 2004 09:59 AM

Probably not. He's smart enough to know that if he makes or endorses a prediction, and job growth creates even ONE fewer jobs than the prediction, the media will spin it as a broken promise. What matters for Bush is that job creation is going to pick up the pace, and voters will increasingly see/feel/sense the economic recovery.

Posted by: Bill Hobbs at March 19, 2004 10:09 AM

So far Bush's projections (the ones he used to sell his tax cuts to the public) have been off by millions, and that hasn't stopped him from making new projections each year... until this year.

Now tell me, why should it not be 'spun' as a broken promise when Bush claims that his tax cuts will create X number of jobs and the actual result does not come anywhere close to that? I'm not talking about quibbling about ONE job less than the prediction, but a difference by an order of magnitude.

After a while, it is common sense to simply question the effectiveness of the method. We think this will result in X. It doesn't. We try it again: We think this will result in X. It doesn't. We try it again: We think this will result in X. And so on.

At what point do we start thinking about adjusting the method?

Posted by: Gary at March 19, 2004 10:16 AM

The report didn't indicate what kinds of jobs these might be. I am inclined to believe that the strongest growth areas will be in service sector jobs that are export-proof, such as food servers, cashiers, baggers, greeters, etc.

Posted by: SemiPundit at March 19, 2004 10:52 AM


Yep, I can see it. 3 million jobs, more proof of evil Bushitler screwing it up again. ;)

I bet that if these jobs are there and they aren't McJobs as Semipundit is hypothesing and that employment does drop below 5%, then all the leftward pundits will complain Bush screwed it up and it should be more.

General Rule for the left
1. Bush is wrong
2. If bush is found to be right, then see rule 1

Posted by: capt joe at March 19, 2004 11:15 AM

Umm, Semipundit? You might want to check out the CBS Marketwatch article yesterday on mfg.

Posted by: Sandy P. at March 19, 2004 11:48 AM

Also from the Fed Philly Index via CurryBlog:

Firms were asked special questions this month regarding their experience in filling recent job openings (see Special Questions). Seventy-three percent of the firms indicated that they have had job openings in the past three months. The most frequently cited problem in filling such positions is a lack of qualified applicants (89 percent). Nearly 41 percent of the firms indicated that they have filled recent openings with temporary or contract workers. Almost 77 percent of firms anticipate openings over the next six months, although 33 percent of these positions may be filled with temporary or contract workers.

Posted by: Sandy P. at March 19, 2004 11:53 AM

The Left always complains that new jobs are of the low-wage hamburger-flipping service-jobs variety, but the claim is never true.

If it was true, then you wouldn't see household wealth rising and you wouldn't see per capita income rising and you wouldn't see homeownership set a record. If we were truly replacing high-paid jobs with low-paid jobs all of those indicators would be falling.

Posted by: Bill Hobbs at March 19, 2004 11:57 AM

"although 33 percent of these positions may be filled with temporary or contract workers"

Heh. Then the BLS better make sure the wording on their questions in the Household Survey are not ambiguous. We don't need 33% of these new workers continuing to answer incorrectly. :)

Posted by: Syl at March 19, 2004 12:16 PM

Considering Bush's record on labor, particularly the harmful changes that have been instituted by the NLRB, one has to wonder about Bush's concern for jobs.

Posted by: Burt Egel at March 19, 2004 01:05 PM

Are you folks saying that we shouldn't be alarmed that every time we open a newspaper, or check out electronic news sources, we see that a thousand jobs here and a thousand jobs there have been eliminated?

Somehow, this doesn't seem to jibe with the stats churned out by the intellectuals.

Posted by: SemiPundit at March 19, 2004 01:42 PM

Record on labor? Do you mean organized labor? What a relic. I find it ironic that "organized labor" leaders continue to endorse Democratic candidates. Labor has asked for 3 major things from Congress over the years:

1) No NAFTA
2) No free trade with China
3) Drill in ANWR

They got none of these. Lot of help the Dems have been to their "cause," whatever that may be. I'll wager that alot of union members don't vote in elections the way their "leaders" want them to...too bad all their dues go to pay for all those nifty yellow Firefighters for Kerry signs.

Posted by: Ivan at March 19, 2004 02:12 PM

"I bet that if these jobs are there and they aren't McJobs as Semipundit is hypothesing and that employment does drop below 5%, then all the leftward pundits will complain Bush screwed it up and it should be more."

That's a BIG IF. Time will tell, of course. And hey, where's Bush on these projections? Last I heard he was too chicken to even endorse his own Council of Economic Advisors' projection.

"General Rule for the left
1. Bush is wrong
2. If bush is found to be right, then see rule 1"

Newsflash: Bush HAS been wrong. He predicted that if he got his tax cuts, they would create X million jobs (in a period he himself specified). He got his tax cuts. The period he specified is over, and his tax cuts produced nothing like the number of jobs he projected, not even close.

It's not a matter of quibbling over a few jobs here and there, we're talking order of magnitude. And it's a simple conclusion: Bush was wrong about the effect his tax cuts would have. Simple facts.

Speaking of projections, capt joe, perhaps you were projecting yourself. Do you go by these rules, by any chance?

General Rule for capt joe
1. Bush is never wrong
2. If bush is found to be wrong, then see rule 1

Posted by: Gary at March 19, 2004 06:20 PM

"General Rule for the left
1. Bush is wrong
2. If bush is found to be right, then see rule 1"

Bush has never achieved rule number 2 and probably never will. See rule number 1.

Posted by: HeardThis Before at March 19, 2004 08:36 PM

I live in Millington, TN 20 miles from Memphis, last year 2 new small business's opened a floor/carpet/paint store and a Lenny's sub shop along with a Perkins resturant. A Lowe's Home Improvement Center is going up as is a Wal-Greens and another business with 3 bays or windows. This in a town of 10,000. We've not seen this kind of business growth in the 17 years we've lived here. WREC radio news said 27% of TN businesses planned to hire this quarter today. Many businesses going up in Bartlett, TN, Tipton Co just across the Shelby Co line (running from Memphis HIGH taxes). 2 of the largest churches are building new churches, another is remodeling outside. 2 new Kohl's opened in Memphis recently.

Posted by: Gail at March 19, 2004 10:47 PM

That's the pattern here in Montgomery after the city council raised the sales tax to a total of 10 percent. Businesses (especially big ticket items) moved just outside the city and then started advertising that they were only charging 6.5 percent. What A Surprise!

Posted by: SDN at March 20, 2004 12:21 PM

Yes, it is true that as more Americans can afford to eat out more often, more fast food restaurants are being built. Aside from what this means to the construction industry, it does indeed mean that more burger flippers are being hired. It also means that more people originally hired as burger flippers are being promoted to manage these new hires.

My non-exportable job would be listed as a service position if it showed up in the employment statistics. It pays $12.00 per hour. Together with what my wee wifey earns from her non-exportable service job (nearly as much plus an excellent health care package) and the money we gained thanks to the "tax cut for the rich" pushed thru during the Clinton era, we are living quite well, thank you.

Posted by: triticale at March 20, 2004 05:32 PM
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