The Health Care Industry is Booming

It’s nice to see that at least one sector of the U.S. economy continues to do well, earning profits and creating jobs consistently (more than 40,000 last month) while the rest of the economy goes in and out of recession. McClatchy reports on where an increasing share of the money to fund those profits and new jobs has been coming from.

It must really suck to be an HR person around this time of the year as you prepare to tell all the company employees how much more they’ll be paying for their health insurance premiums in the year ahead. Of course, most workers are probably just happy to have a job, so the push back is likely not what it was just a few years ago before the recession began.

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Romer is Reassured

Before departing for the cozy confines of Berkeley and the job of teaching economics rather than making economic policy (what’s that old expression about “teaching” and “doing”?), Christina Romer, the outgoing chair of President Obama’s Council of Economic Advisers, had these thoughts to share on this morning’s labor report:

Against the backdrop of some unsettling economic data in the past few weeks, today’s numbers are reassuring that growth and recovery are continuing. At the same time, the fact that the growth of private-sector payrolls is below the level needed to keep up with normal growth of the labor force is obviously unacceptable. There are a number of steps we could take to help increase private sector job growth and put the economy on a path of steadily declining unemployment. We will be working with Congress on these measures in the coming weeks.

It’s not likely that this sort of “reassurance” is going to pass muster with voters in a couple months when they go to the polls and the fact that the President’s top economic advisers are exiting stage left just when it looks as though things are about to take a turn for the worse only adds to the growing concern that Americans will soon be able to express.

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Payrolls Down 54K, Jobless Rate Rises to 9.6%

The Labor Department reported that nonfarm payrolls declined by 54,000 in August and the unemployment rate rose to 9.6 percent. The overall decline was driven by the departure of 114,000 temporary 2010 Census workers and private sector payrolls rose by 67,000.

The increase in private payrolls was more than the consensus estimate of 40,000 and, coming after an upwardly revised gain of 107,000 in July, eased some fears that higher jobless claims might lead to renewed job losses for U.S. companies.

(more…)

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W(h)ither the White House Recovery Blog?

Richard Blackden files this report for the U.K. Telegraph on the question of whether the White House Recovery Blog may undergo some sort of a name change in the months ahead.

Will the White House have to replace its recovery blog with a double-dip one?

Have you read the White House’s Recovery Blog? If not, you’re joining a large number of Americans who have failed to log on.

The 8.5m who lost their jobs in the recession; the 1.2m who have given up looking for work and, finally, the Republicans who can smell a Democratic President in trouble.

Like the recession, America’s recovery is departing from the normal script. Since World War II, the deeper the downturn the economy has endured, the steeper the recovery it has enjoyed on the way up. But a summer that brought record temperatures to many parts of the country has seen the momentum that the economy began to lose in the spring evaporate further.

Critics of the administration cannot say it hasn’t taken action. There’s the original $800bn American Recovery and Reinvestment Act that was passed in February last year. Then there’s the HIRE Act, which provides a tax credit for companies that employ people who have been out of work for more than two months, and the list extends to the cash-for-clunkers programme, the homebuyers’ tax credit and the National Export Initiative

The President’s immediate priority, though, is to make sure he doesn’t have to replace the Recovery Blog, with a much nastier sounding Double-Dip one.

Tomorrow’s labor report will go a long way in determining if such a change will be needed…

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ADP Data Bodes Ill for Friday’s Labor Report

A short time ago, ADP reported that U.S. private sector employment fell by 10,000 in August, the first monthly decline since January. Shown below are the changes in employment for goods-producing industries where job losses have accelerated since the spring.

This bolsters the case that Friday’s nonfarm payrolls report from the Labor Department is likely to produce a six figure number with a minus sign in front of it after laid off Census workers and cutbacks in state and local government jobs are included in the mix.

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Krugman on the Need for More Stimulus

Princeton economics professor and Nobel Laureate Paul Krugman laments the smallish $800 billion stimulus of last year and says we should now double down with another $800 billion.

On what’s going through the mind of fixed income investors, Krugman says:

The bond market is telling us not to worry about the current deficits. They’re happy to lend the federal government money at very low rates. What the bond market is telling us is they’re terrified of deflation and of a weak economy for a very long time.

They’re also terrified of the stock market…

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