Brad DeLong's Semi-Daily Journal (2004)

If, as observed by scholars, job turnover and employment growth in the United States are countercyclical, and if, as has been reported, employment growth increased by 112,000 odd jobs in January, then it follows that job turnover must be trending counter to that, or, decreasing from a December null state.

http://ideas.repec.org/a/ucp/jlabec/v14y1996i4p603-25.html

Estimates from Job Openings and Labor Turnover Survey (JOLTS) show a YOY statis in private job turnover but a slight decrease in government job turnover, which would therefore imply, based on countercyclical theory, that those 112,000 new jobs are almost exclusively government jobs, paid for by the Bush deficit-and-spend budget.

http://stats.bls.gov/jlt/jlt01_1103.htm

Total separations, on the other hand, show a decrease in private sector, and a statistically insignificant change in government. This further supports the observation that no new positions are opening up or being created in the private sector, only that government is growing on our children's backs once again. (It also supports the widely held belief BLS are lying like dogs about there being a rapid increase in jobs lost.)

But jobs growing not as fast as the deficit is skyrocketing! 112,000 jobs of some 136,000,000 total US employed is only an +0.08% rate, about +1.0% annually, both a statistical artifact, and speaking realistically, a most insignificant ROI for our $100B's in new Federal budget revenues, considering we're spending 5% of GDP to service the Bush budget deficits, and another 5% for the trade deficits, nearly $935B per year, or about
!!!$696,227 in deficits for every job created!!!

http://www.bea.doc.gov/bea/dn2.htm

Robbing Joe to pay Dick, and throw a few crumbs for the suckups and sychophants. Hoorah! Jobs, jobs, just in time for the GWB's re-election!!
Laissez les bon temps rouler, Ricard et George!!

Yup, the trolls are out in force.

I had Ray Fair for macro--nice guy. Loves his models.

Notice this interesting conjecture on productivity trends -

http://www.nytimes.com/2004/02/12/business/12scene.html

Information Technology May Have Cured Low Service-Sector Productivity
By HAL VARIAN

RODUCTIVITY growth took a breather last quarter, slowing to 2.7 percent, after the previous quarter's torrid 9.5 percent growth. Still, by historical standards, 2.7 percent is a respectable number.

From 1948 to 1973, productivity grew at close to 3 percent annually, doubling the living standard in that period. Then came the dark age of productivity growth: from 1974 to 1994, it averaged only 1.4 percent a year. From 1995 to 2000, we had something of a productivity renaissance, with growth climbing to more than 2.5 percent a year.

When the economy started to slow down in 2000, many economists expected productivity growth to fall back under 2 percent. But contrary to these expectations, productivity has continued to grow strongly.

It is difficult to overstate the importance of productivity growth for the long-run health of the economy. Over the years, virtually all economic progress has come from productivity growth. An increase of half a percent a year can make a huge difference over 20 or 30 years.

So it's pretty important to understand why productivity growth declined so sharply in the 70's and rebounded so strongly in the 90's.

Unfortunately, there is no consensus about why productivity growth slowed in the first place, though there is no shortage of theories. Various factors, including the 1973 oil price shock, the baby boomers' entry into the labor market, an increase in regulation and a slowdown in technological innovation seem to have played a role.

But there is an emerging consensus about why productivity growth surged again in the mid-90's: most economists say information technology played a major role.

This isn't to say that the productivity renaissance is completely understood. Was the resurgence in productivity growth limited to a few industries, or was it widespread? How long will it continue? How, exactly, has information technology made businesses more efficient? What specific kinds of information technology make a difference? ...

Have these forecasts, in the past, been used by investors to guide their strategies? Assuming the estimates really are indefensible, should we treat them more or less with a shrug, as we treat a diplomat's excessive optimism about the prospects for peace in his area, or is this more comparable to an FDA official giving false reassurances that some product is safe to use?

Ray Fair is always clever, but I am not convinced that productivity growth will slow soon. Increasing productivity in information technology itself, and especially in the service sector businesses that employ it, makes me quite optimistic about productivity and less optimistic about jobs.

These forecasts about important for shaping Administration and Congressional programs and initiatives. They must be taken seriously, also they are selectively used by market analysts, and I am hearing them well echoed.

The issue to go with, it seems to me, is free trade unions for Chinese, Vietnamese and Indonesian workers.

anne re productivity
"PRODUCTIVITY growth took a breather last quarter, slowing to 2.7 percent, after the previous quarter's torrid 9.5 percent growth."
It's the volatility here that arouses my suspicions about whether the accepted view (that it's IT) is correct.
Where do we find these advances exactly in Q3? And what happened in Q4 that they contract so markedly? And if we can't identify them what prevents us from believing that they couldn't just drop to <1%?
Brad's assurances that it is "unreasonable" ( different thread) do not persuade me.

Just wondering, has anyone ever looked at productivity vs oil price? If so, where might I find that information?

There is a huge collapse in productivity growth in the mid and late 1970s and thereafter as OPEC triples and then the Iranian Revolution again triples oil prices.

There are no corresponding accelerations of productivity growth in years after oil prices collapse, however.

"The issue to go with, it seems to me, is free trade unions for Chinese, Vietnamese and Indonesian workers.."

Good thinking.

----------------------

"So it's pretty important to understand why productivity growth declined so sharply in the 70's and rebounded so strongly in the 90's.

Unfortunately, there is no consensus about why productivity growth slowed in the first place, though there is no shortage of theories."

I don't know about those theories but I could offer my own speculation:

Up until 1970s, Taylorism and Ford's assembly line fed productivity growth.

Meanwhile, beginning in 1950s, in embryonic (spell?) forms, Europe developed Group Technology while Japan developed Just In Time systems, which produced superior results in terms of "through-put": Steel turned to cars faster that way, reducing cost of capital tied up in operating capital.

Around 1970s, while American manufacturers (both management and labor) had become too self-confident and complacent (it came to that mid level management was no less an obstacle to automation than AFL-CIO), European and Japanese manufacturers (both management and labor and their system of industrial relations) had perfected their ways.

So competition forced a decline in productivity in US. Detroit plants began to shut down. Senators declared protection of automotive manufacturers a matter of national security. Service sector, around those days, was pretty labor intensive any way.

The manufacturing robot was really invented/developed by Americans. The American manufacturers spurned it, however, while Japanese manufacturers embraced it.

American manufacturers woke up in late 1970s and early 1980s: Automate, or evaporate! In early 1980s, the technology for "workerless factories" was already there. And it took hold only in 1990s and it is continuing to expand its roots.

"Workerless factory", however, is a dangerous thing for capitalist system. It is a problem that the capitalists have not been able to solve yet. Hence we've had Reagonomics and now the Iraq invasion and tax cuts.

The world now stands at a pretty uncertain juncture.

One of course should also include in this account explaining productivity trends over the decades the role of the excellent system of higher education and R&D capacity in US.

I have a hunch that the higher ed system also became sort of complacent in 1970s as well as left leaning and so came the swing-back in the form of Reagonomics hitting higher ed finances as well. Did that produce good results? I am not sure. I think it produced mixed results.

Calmo

I am convinced there is no reason to expect a productivity slowing in the near future. Technical advances by information technology leaders show no sign of slowing, while application of information technology advances should not slow in our current competitive an environment. Quarterly variations are smoothed in yearly data.

Lloyd-Jones

"The issue to go with, it seems to me, is free trade unions for Chinese, Vietnamese and Indonesian workers."

Important point.