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| Lessons on Hornets and Bears; Ukraine Ceasefire a Victory for Common Sense Posted: 05 Sep 2014 11:38 AM PDT If you are looking for something to gag on today, please consider the Bloomberg View by Leonid Bershidsky Ukraine's Cease-Fire Is Putin's Victory. ...As for Russian President Vladimir Putin, he has secured a ringside seat and may settle down with a bowl of popcorn. Any outcome suits him as long as Ukraine struggles to get out of its impasse alone. He will be happy to see the Lugansk and Donetsk regions turn into a frozen-conflict zone, precluding Ukraine's further integration into NATO and the European Union, and equally pleased to have them gain broad autonomy from Kiev and a veto on major political decisions. A military solution suits him, too, since the West has refused to engage him except in the form of ineffectual sanctions.Victory for Common Sense While one can claim this is a victory for Putin, one should rightfully gag over Bershidsky's comment regarding "aggression and duplicity." The US and EU fomented this crisis and now apologists for failed US policy don't like the results: Russia annexed Crimea and Ukraine may splinter. Had this ceasefire not have been agreed to, rebels would have taken Mariupol. The city is now surrounded by rebel forces. Let's accurately label the ceasefire for what it is:
It's also a victory for free trade given sanctions have been disastrous. Europe is back in recession and absurd sanctions are partially to blame. Bloomberg has an appropriate example just today: Europe's Pears Rot as Putin Retaliation Pushes Down Price. Lessons Yet to Be Learned I don't know if this ceasefire will stick or not. But if it does stick, it will be because Ukraine gives in over US objections. It's more up to Ukraine than anyone else. The rebels have made their demands known and I highly doubt they back down unless they get most of what they want. The US ought to consider such outcomes before it goes poking sticks at bears that may bite, and hornets that sting. Hornets and Bears The US stirred up a hornets nest in Iraq. The end result is the destruction of Iraq and the formation of ISIS. The US now has another war to fight. In Ukraine, the US helped incite the Maiden uprising. Victoria Nuland, US ambassador to Ukraine stirred up trouble with her recorded comment "F*ck the EU" regarding US-EU differences of opinion on how to handle Ukrainian protests. Those protests, stirred up by the US, eventually led to the ouster of then president Viktor Yanukovych. For a short while the US was thrilled with that result. Historically, every time the US meddles in the internal affairs of other countries, it backfires. Vietnam is a perfect example. So are past CIA actions that led to the overthrow of the shah of Iran. Yet here we go again, poking sticks at bears, recklessly seeking to move NATO on Russia's front door, not only against the wishes of Russia but also against the wishes of the Eastern half of Ukraine as well. This time the bear did not back off, it bit off a piece of Ukraine. Now Bershidsky whines this is "vindication of Putin's aggression and duplicity." No, it's more of a reflection on stupid US policy of poking sticks at hornets and bears, then getting the EU to foolishly go along for the ride. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Nonfarm Payrolls 142,000; Unemployment 6.1%; Employed +16K; Labor Force -64K Posted: 05 Sep 2014 08:42 AM PDT Initial Reaction The payroll survey shows a net gain of 162,000 jobs vs. an expectation of 230,000 jobs. This broke a six-month string of +200,000 jobs. Digging into the details, things look far worse. The household survey shows a gain in employment of only 16,000. This is the fourth month in the last five that the household survey was substantially weaker than the headline number. The average employment gain in the past five months is 125,200 vs. an average gain in jobs over the same period of 230,800 per month. Is a trend forming? If so, it doesn't bode well. That said, the household survey is volatile and over time the data series merge. The question now is which one is right? At turns, the household survey tends to lead. The labor force fell by 64,000. Those not in the labor force increased by 268,000. The unemployment rate fell by 0.1% thanks to a decline in the labor force greater than the rise in employment. BLS Jobs Statistics at a Glance
Additional Notes About the Unemployment Rate
Please note that over the course of the last year, the working-age population rose by more than the number of people employed. In normal times, the unemployment rate would have gone up slightly. Instead, the unemployment rate fell from 7.2% to 6.1%. Over 100% of the decline in unemployment in the past year is due to people dropping out of the labor force, rather than strength in the economy! August 2014 Employment Report Please consider the Bureau of Labor Statistics (BLS) July 2014 Employment Report. Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services and in health care. Click on Any Chart in this Report to See a Sharper Image Unemployment Rate - Seasonally Adjusted  Nonfarm Employment January 2003 - August 2014  click on chart for sharper image Nonfarm Employment Change from Previous Month by Job Type  Hours and Wages Average weekly hours of all private employees has been flat for six months at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.3 hours. Average hourly earnings of private workers rose $0.06 to $20.68. Average hourly earnings of private service-providing employees rose $0.06 to $20.47. For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution? Birth Death Model Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back. Table 15 BLS Alternate Measures of Unemployment  click on chart for sharper image Table A-15 is where one can find a better approximation of what the unemployment rate really is. Notice I said "better" approximation not to be confused with "good" approximation. The official unemployment rate is 6.1%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. U-6 is much higher at 12.0%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years. Labor Force Factors
Were it not for people dropping out of the labor force over the past several years, the unemployment rate would be well over 9%. Some of those dropping out genuinely retired. However, millions retired involuntarily. That is, they needed to retire and collect social security because they had no job and no income. Such folks are no longer in the labor force even if they want a job. The falling unemployment rate is very deceiving, painting a picture of improvement that simply does not exist. A gallup survey on the economy better reflects how the average Joe feels: 38% Think Economy Getting Better, 56% Say Worse. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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