If you need a dose of Christmas cheer, it’s best to look in a very unlikely place. The business and financial press is positively melting down over the most recent jobs report, which showed an impressive 321k net increase in jobs. Given that Barataria has been very positive on the US economy in 2014, you would expect us to join in the merriment.
Sure, why not. Just don’t over-do it, because this is only a make-up call. There is nothing reported this week that hasn’t been true for a year, and the noise in the data makes it look especially strong for November. The truth is that job growth has been strong all year and we are on pace for a good 2015.
There are plenty of reasons to cheer, but like the office Christmas party a good time is no reason to get crazy.
First, we need to look at what was reported. Not only did November come in at +321k jobs, October was revised up to +243k and September to +271k. It’s a huge increase over the bump of +190k per month we were seeing one year ago, which implies that hiring is accelerating. This is all from the official data released by the Bureau of Labor Statistics (BLS).
But these data were not confirmed by ADP, which saw an increase of only 207.8k in November. Over the last year, ADP tells us that there were 2.5M jobs added, while the official BLS numbers come in at about 2.7M. These two never diverge by this much, meaning that something is up that we should keep an eye on. There’s a good chance that the BLS numbers will swoon a little in coming months as the two converge again.
That may not matter much, however. What matters most is the psychology of the situation, and that is overwhelmingly positive. The stock market reacted negatively to the good job news at first, probably over concerns that interest rates will have to rise as the economy picks up. That reversed later in the day as good news was finally accepted as good news.
Adding to the good news, it seems that employers are going to add more jobs in 2015. Whether you believe the official numbers or not, the acceleration that we’ve all been waiting for in 2014 may indeed be happening.
What needs to complete the cycle of good news are some reports of strong holiday sales. The expectations have been raised to a healthy gain of 4.1% over 2013. If retail performs well for the first time in six years we can expect the good news to keep coming.
And we have reached the point where that is what matters more than anything else. The news has been good, if not great, but what we have been looking for is a spate of optimism to help us turn the corner. Businesses need to expect a better tomorrow if they are going to start investing in themselves. Higher interest rates are actually a good thing if fairly conservative investments start to generate a decent return against crazy speculation.
How good has the economic news been? Good enough to get everyone out of a Winter funk and into a rousing chorus of Christmas cheer. So far, that has been the element that has really been missing in the business section.
Is the news as good as everyone says? If everyone keeps saying it, sure. Good tidings create more positive feeling as we shake off the depression that has hung around us for far too long. A few hundred thousand more jobs is a good thing, but the exact numbers are less important than the expectations.
Merry Christmas to all and a Happy New Year! If you’re not exactly feeling it yet, you will be.
If there’s a good reason for optimism lets have more of it. But seriously, there are still a lot of long-term unemployed and this is not making a big dent in that number. You try to tell people who can’t find work that they should cheer up because its christmas.
9M still unemployed, yes. At this rate we’ll still have two years before we’re at what is considered “full employment ” (not quite zero, but a real unemployment below 4% solidly). Again, we’re on track for 2017, but not before.
I can’t breathe.
Come up for air, then.
I am coughing up blood from this horrible year in international relations and domestic affairs. It reminds me of none other than 1968.
If your saying the cure for depression is to tell the patient to buck up it’s not so bad I think you need another course in pop psychology.
It is much better this year than last and there is a good reason why the press is celebrating. I think you were ahead of it this summer but there is no doubt that people feel better this year and are opening up their wallets. I already got three Christmas presents from clients of mine that were much nicer than last year which shows that they really like me, which they do & I’m thankful! , and they have more to give out. Maybe it isn’t much better for everyone but if a lot of people feel good maybe it will turn the corner for the rest.
You probably should write more about the charities that depend on Christmas & encourage people who do feel blessed to pass it on directly to those in need.
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