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Did Washington Save the Economy? Part 1

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A "jobful" rebound is unlikely to goose the recovery.

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By the same token, it's very evident where all of the remaining 90,000 new jobs in the headline print originated. The census bureau enrolled 48,000 temporary employees in March while the volatile BLS category for "temporary help" had a monthly census gain of 40,000. Some of these "temps" may be just that and others may migrate into full-time status, but, as will be seen below, this category has almost no bearing on the longer-term trend of job creation. The more immediate point, however, is that the ballyhooed gain in the March headline, setting aside the HES Complex evergreen, occurred within a narrow 5% slice of the nonfarm job market. The vast remaining expanse of the job market was still dead in the water. And the corollary conclusion from the March report is that any single month's print most likely contains as much noise as signal. The notion of a jobful rebound, therefore, requires a deeper and more extended look at the data.

One way to accomplish that is to analyze the recent monthly and recession period data for the various segments of the jobs market in the context of the longer term boom and bust cycles of the past decade. Thus, the long period from January 2000 to December 2007 measures the peak-to-peak result of the last business cycle and may fairly be considered an indicator of Boom Period trends for each job category. Next, the 24-month period from December 2007 to December 2009 can be considered the Slump Phase of the cycle, since it begins with the officially designated start of the recession and ends at the point when material job losses ceased. Finally, the first three months of 2010 have been labeled the Bounce Phase in deference to the general perception that the jobs recovery began this winter and that a full quarter's observation is less susceptible to noise and revision than the preliminary print for the latest month.

When viewed in this framework, the first high-level conclusion is nearly fatal in its implication for the jobful-recovery thesis. Specifically, even during the seven-year Boom, the American economy was only a tepid generator of jobs, with growth totaling about 7.2 million or 86,000 per month over the period. Running at its boom time average rate, then, the job market would require a decade to recover the Slump period losses -- to say nothing of absorbing the 170,000 per month growth rate of the labor force.
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