Think the Wizard might know next Friday's number? I guessing 225,000 added. And they still need to get the bad PPI number out, and there's another bad PPI and CPI coming on the 18th and 19th. Would be their excuse to make the initial rate hike March 16 to teach "long everything" speculators some manners. Then Greenspan could announce that deflation has been licked, that jobs are getting on track, do a little "I'm ballsy" end zone dance, announce his retirement, ride off into the sunset, right as the train wreck really gets rolling. The rate increase might delay the train wreck just long enough for him to pack his bags in May (it'll be close, no increase and Train Wreck arrives in force in April). Don't let the door hit you on the butt on the way out, Easy, and don't forget to flush the toilet. And turn off the lights, there's an energy shortage.
Reuters
Greenspan Says U.S. Jobs 'Pop' Possible Soon
Saturday February 28, 7:53 am ET
STANFORD, Calif. (Reuters) - Federal Reserve Chairman Alan Greenspan said on Friday strong economic growth should soon produce more jobs but he warned U.S. manufacturers they should not count on a Chinese currency revaluation being a major boon for them.
"Very sluggish" U.S. job growth would pick up when exceptional strong rates of productivity, or output per worker, slowed and that may be occurring, Greenspan said in answer to questions following an address to the Stanford Institute for Economic Policy Research.
"I would say that we could get a pop in employment almost any time," Greenspan said, since the economy had been growing rapidly enough that companies cannot indefinitely boost output with existing workforces.
"Job creation occurs when you no longer can dip into the system of potential productivity advances to substitute for labor," Greenspan said, adding "My own judgment is that at some point that is almost certainly going to happen, indeed it is conceivable it may be happening now."
JOBS A HIGH-PROFILE ISSUE
The dearth of new U.S. jobs, despite a growing economy, has become a major issue in the run-up to November presidential elections, with Democrats hammering the Bush administration for overseeing a jobless recovery from the 2001 recession.
Audience members pressed Greenspan for his opinion on the impact of any change in China's practice of pegging its yuan currency at about 8.28 per dollar -- something the Bush administration is pressing Beijing to do.
The Fed chief suggested the effect of broadening the trading band for the yuan or moving quickly to a floating exchange rate was largely unknown because it wasn't even clear "what the extent, if any, of the undervaluation" is of China's yuan.
U.S. manufacturers claim it is undervalued by as much as 40 percent, and say that gives China an unfair trade advantage by making its products cheaper for Americans.
But Greenspan said that it was unclear what would happen of Beijing removed its controls on capital flows.
"The one thing I'm reasonably sure of, however, is that if the value of the Chinese currency does rise, which I think is a fairly reasonable expectation....it is not going to shut down exports from China to the United States, which will then be replaced by U.S. production," Greenspan said.
CHEAP LABOR ABUNDANT
Nor will it bring jobs back to America.
"Almost surely, what will happen is that you will move the supply of goods that the Chinese were shipping to the United States from China to other low-cost producers, probably in Southeast Asia," Greenspan said, adding that the Philippines or Vietnam could easily step in.
In Beiing, China's central bank could not immediately be reached for comment.
In his remarks to the group, Greenspan emphasized the growing importance of ideas as the driving influence for economic growth as opposed to manufacturing activity as was the case in the past. He said it focused attention on how to properly protect intellectual property.
Greenspan said a rising proportion of total U.S. economic output now "is essentially conceptual rather than physical," a reflection of an economy reducing manufacturing while offering more services.
As a result, means asset valuation had to measure intellectual property and the legal rights inherent in intellectual property rather than simply physical goods, and it raised questions for the courts and economists.
"If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights," Greenspan asked. "How appropriate is our current system -- developed for a world in which physical assets predominated -- for an economy in which value increasingly is embodied in ideas rather than tangible capital?" |
