9th September, 2014 – Article previously published in CincoDias.com
I read with great surprise that something as generic as “the consensus of analysts” or “the market”, the hands have been at the forefront with the latest unemployment data from the United States. There 142,000 net new jobs were created in August. Apparently someone expect more than 200,000 jobs were generated. Interestingly, market values, at least, the Americans-or flinch: the DJ continued its upward wake, SP-500, say the economists and analysts with names interviewed by Bloomberg and The Wall Street Journal continued unstoppable around 3000, after having spent its historical record of 2,000 points. These analysts and economists know more than the anonymous “consensus and markets.” I have lived in the United States in the last month and a half and I’ve seen work and consumption in every corner of America.
It’s amazing how many as are led by the last data vanes; outrageous panic and run, haphazardly, indiscriminately. So that, it seems, according to these behaviors, one day America will conquer the world, and the next day is going to sink into poverty. How wonderful, thoughtlessness against frivolous and superficial, is to focus attention on trends in evolution … the causes and the effects. Otherwise, economic and business life is not lived. The American economy, as the country itself, is full of contrasts. But it has an internal logic, without which nothing is understood. Examples are many:
The first quarter of 2014 gave us the shock of the sharp contraction of GDP by -2.9%. Frivolous were shocked, and libertarians said, “if we said already, Obama does not know how to run the economy and so is the approval rating of his administration, at historic lows.” The Department of Labor explained the role that the hard winter had played negatively on economic growth, because there was a sharp contraction in demand. Some laughed, thinking it was a baseless excuse.
The reality is that since 1939 this phenomenon-the influence of meteorology on the economic and performance had happened: during the 8 years when Bill Clinton was president (1993-2001), 22 million jobs were created or, that is, an average of 240,000 jobs per month. There was one exception: the winter of 1996 when Clinton began his second term, full of snow, because of which were created, only 2,000 fewer jobs in January: 220,000 therefore. Otherwise, all we know that with Clinton, thanks to new technologies and the Internet, not only was economic growth and job quality, but also sharp increases in business productivity (annual average of 3%, with increased of the workforce, also each year, 1%).
GDP grew 4.2% in the second quarter of the year, so “anonymous analysts” were left without arguments to attack President Obama: Of course, this growth was due to the start of the summer season, in the same way it was in the winter slowdown. And what happened to the job? In the first six months of the year, 1.4 million jobs were created or what is the same, 240,000 jobs a month on average, and the entire Clinton era. And this, with decreases of GDP (-2.9%, first quarter) and increases in GDP (4.2%, second quarter).
August has not been such a good month for employment for those already generated 142,000 jobs in that month in the private sector. The unemployment rate, though, fell to 6.1%. Everything indicates that, in order to reach the 5.5% unemployment rate will come in 2016, the middle of that year, facilitating the work of the candidate / a Democrat who wants to succeed Obama in the White House. The participation rate was 59% (low by historical standards since the end of World War II).
Who found work? Those with better educational and professional qualifications in two specific sectors: Professional Services and Information Technology, as well as Health. In the first case, all we know that ICT and the Internet have a carryover effect of demand, in other business sectors and consumption, which accounts for 70% of the American GDP. In the second case, it appears that the influx of millions of Americans with health insurance, thanks to the Obama Health Reform (Obamacare, or Affordable Care Act) has positive effects on the economy, since patients require treatments, medications, etc., those who will reply to hospitals, laboratories and medical personnel-doctors, nurses / as-, previously not necessary: once again, has stimulated demand for products and services and therefore consumption.
Okay, 142,000 jobs with growth of 4.2% of GDP are few jobs. Do many 268,000 per month in the first quarter, a decrease of -2.9% of GDP? I sense that too. Then, with what number we were? The answer is unequivocal: none. Examine what has happened since the economic recovery began in June 2009: GDP has grown by an average of 2.2% and have generated 10 million jobs in the private sector in the past 54 months. It is the longest period of job creation since 1939, in the United States. And this is the trend that really matters.Compartir / Share