US private sector cuts 10,000 jobs in Aug

[OhioChick]

Source: Reuters

Sept 1 | Wed Sep 1, 2010 8:21am EDT

(Reuters) - U.S. private employers unexpectedly cut 10,000 jobs in August compared to a revised gain of 37,000 in July, a report by a payrolls processor showed on Wednesday.

The July figure was originally reported as a gain of 42,000.

The median of estimates from 34 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 19,000 private-sector jobs in August.

The ADP figures come ahead of the government's much more comprehensive labor market report on Friday, which includes both public and private sector employment.


Read more: http://www.reuters.com/article/idUSEAP10340020100901

[tritsofme]

1. Ick, the BLS report on Friday is going to be nasty.

[FormerDittoHead]

2. Why not? No DEMAND for what those jobs produce, so lay them off!

Of course, this is EXACTLY how the Great Depression lasted as long as it did until the New Deal + WWII was able to increase aggregate demand.

This is taught in the ECON-101 in college, although maybe not "faith based" colleges or talk radio, however.

You see, Rush Limbaugh and Glenn Beck never went to college (my bad: Beck attended a single class, then dropped out)

So, the Republicans threaten to withhold their votes and GUT the stimulus package in "exchange" (not that they gave anything in return) for tax cuts, which we have seen time and again does NOT increase DEMAND.

And we go round and round like a bunch of idiots "respecting" and "compromising" with the Reagan-heads instead of LAUGHING at them as WE SHOULD while the WHOLE COUNTRY SUFFERS IN THIS ECONOMIC MORASS.

[Lightning Count]

7. So the solution is New Deal II+WWIII?

I think the solution is to buy American whenever possible.

[FormerDittoHead]

8. Yes, we should start WWIII, that's exactly what I meant.

:sarcasm:

OK, I'll break this down.

History shows that the New Deal didn't pull us out of the depression, but WWII spending increased aggregate demand enough where businesses were justified to hire people. Those people then spent their wages, more people got hired and the great depression ended.

But instead of building ships and tanks and having them destroyed overseas, we could have equally stayed out of the war, sunk the tanks and ships in the Atlantic and the economic effects would have been the same.

...or we could have alternatively built bridges, roads, dams, canals, tunnels, factories, steel plants, etc. with the same money and gotten the same results - people working.

Economists will argue it doesn't matter what you spend the money on, but I honestly believe that war (or military spending) is an inefficient way to spend the money over the kind of things listed in the previous sentence.

The point is, for those who haven't taken economics, "war" didn't pull us out of the Great Depression to increase demand, SPENDING did. When I refer to WWII and the great depression, it's not nothing to do with "war" except SPENDING.

And that's what we need NOW.

Over a year ago, Paul Krugman said to get us out of this mess we should spend TWICE what the stimulus ended up being through senseless tax cut compromises.

reference: http://www.cbsnews.com/stories/2008/12/28/ftn/main4688594.shtml

At the time he said that the smaller amount of spending finally approved in the Senate would mean minimal relief and actually prolong the recession as it wouldn't be enough to increase demand enough to justify employers to hire (back) more people. And here we are.

IMO, the 900 lb gorilla in the room is the military, and I would propose that over 10 years, the military be cut in HALF, so that it's only as much as Russia, China, France and UK COMBINED, and we take that money and pour it into alternative energy R&D & production and infrastructure rebuilding.

[AlbertCat]

3. Are these the guys who are supposed to hire because of the current tax cuts?

How're those tax cuts workin' out for you guys?

[HughBeaumont]

5. Maybe they've been frightened for 9 years straight?

Jobless recoveries, despite the wealthy having the lowest top marginal tax rate in 7 decades, were the signature of the Failure Fuhrer's reign.

So damned TIRED of their stupid excuses. This was a THEFT and an upward transfer of wealth.

[HughBeaumont]

4. Hey, I have an idea (started about 30 years ago)!

Let's turn over the economy to the war/defense industries, pharmaceuticals, insurance, debt investment, technology and risky financial instrument trading!

Let's also cut or de-fund every social and educational program, resulting in poor schools, crumbling infrastructure and a social safety net that isn't worth the paper it's non-existent plan is printed on!

Let's make higher education expensive and harder to get, so only the well-to-do (and generally, less liberal) members of society can get degrees and the rest will be crippled under a mountain of debt only to graduate to the worst job market in decades! WHAT an R.O.I.!

Let's tax the wealthy less and less with each passing year, skyrocketing the national debt and affecting the economy with booms, bubbles and crashes rather than steady job creation and real wealth building!

Let's offshore Manufacturing, Automotive and General Industry in the US, resulting in several million displaced workers experiencing long periods of un/under-employment!

Let's stagnate worker wages so that they make relatively the same amount in real dollars as they did in 1973! Oh, and we can also get Mom and Dad for what we used to just be able to get Mom OR Dad for!

Let's offshore/inshore IT, radiology, law, RNs, factory workers, lab technicians, software developers, construction workers blah blah blah let's DO IT ALL!! HA HAAAAAAA!

WHAT COULD POSSIBLY GO WRONG??!?!

[Scruffy1]

6. Yep-its a perfect plan-capitalism at its finest

[daleo]

13. Don't forget "turn the media over to right-wing loons"

So that people will be distracted from all of the above.

[Imajika]

9. Real report is Friday...

I have a hunch it will show some modest improvement.

It's certainly no "recovery summer", but we aren't going off a cliff either.

[tritsofme]

10. I'm expecting it to be pretty terrible.

The census layoffs will push the headline number way down, and based on this report and the absolutely awful initial jobless claims numbers over the past month, the BLS report will likely show a net loss or something very close to flat for the private sector in August. Along with the unemployment rate likely ticking up, this report is just going to be bad.

[Imajika]

14. You could be right...

Expectations are so rotten right now that I'm betting even a mediocre report will be greeted with fanfare.

Considering the census layoffs, and that many more people will just leave the job market I'm going to guess the following:

Net Loss: 55000 (census + public sector layoffs accounting for all)
Private Sector Gain: 57000
New UI Rate: 9.3%

Hope I am right, a bad report would be terrible since there is only 1 more after this till election day.

[Psephos]

11. Release the Biden! n/t

[defendandprotect]

12. Are we now headed towards Obama's Depression???

Insufficient action could make this happen -- !!

[Mimosa]

15. Oy vey...I'm feeling it, seeing the effects. n/t