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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (504007)	12/5/2003 9:25:06 AM
From: Richard S	Read Replies (3) \| Respond to of 769667

Very disappointing Job Growth The U.S. Labor Department said non-farm payrolls increased by 57,000 during the month of November. While jobs were added for the fourth month in a row, the number fell short of economist forecasts of payroll growth of about 140,000. I know college students who can't even get a job at McDonald's.

To: Kenneth E. Phillipps who wrote (504007)	12/5/2003 9:58:38 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 769667

Mornin', Kenny. Never thought I'd say this, but great interview with Robert Reich on CNBC a little while ago. He and Larry Kudlow actually agreed with each other on most everything they discussed. I think everyone will agree that this was a disappointing jobs number this AM. 82k per month the last four months is an improvement, but not enough. The question is why it's picking up so slowly and Reich didn't even remotely blame it on Bush's economic policies. Before he came on, others were blaming it on outsourcing, but Reich pretty much called that nonsense, dismissing the claim that jobs are going overseas because it assumes jobs are a fixed quantity - i.e. that a job created in Mexico or India or China from "offshoring" means a job must have disappeared here. Obviously that is not true - demand for labor isn't a constant, jobs are not a zero sum game. So, what does Reich attribute it to? Well, two things - continuing uncertainty in the board room about future demand, causing companies to hesitate on new hiring and investment in spite of strong current demand and profits; and a tendency toward using now-proven technology to boost productivity rather than hiring to increase capacity. In other words, technology is a cheaper, lower risk means of growing production right now than is labor. Makes sense, though it's a bit of a sick joke on technology workers, isn't it? Some additional good points made in the discussions among economists on CNBC - points not really in dispute among them: 1) we are still absorbing excess capacity and at some point businesses will have no choice but to hire (tightening of business inventories is something to watch here), and 2) corporate profits are "the engine of job growth" and recent strength in profitability points to a coming surge, though the timing remains uncertain. One last thought - it occurs to me that the incredibly low cost of new capital right now would tend to encourage capital investment over adding labor as long as the two are interchangeable (presumably there is some limit to it, but on the margin they are interchangeable to a large degree). Good for sellers of technology, but compounding the preference Reich noted for technology based productivity improvement over hiring to increase production. Well, I see the market's not falling apart over the number. Mr. Market always knows, you know. ;-)