The U.S. economy took a solid jump forward in January with the addition of 230,000 jobs, the Department of Labor said Friday.
So, why are so many people still worried?
Well, this is easy.
In the first place, 230,000 is not 7.5 million jobs, which would put the country back to pre-recession comforts.
In the second place, the gains are the largest the economy has added since April and essentially, after April, the gains dissipated. The new year, as it happens, looks very similar to 2011.
The labor market gained by an average of 160,000 jobs per month in 2011, Federal Reserve Chairman Ben Bernanke said Thursday. And the unemployment rate dutifully shrank from 10 percent to 8.5 percent.
In January, that ticked lower, hitting 8.3 percent in what will surely be a setback for any Republican presidential campaign. Undeniably, the unemployment rate is falling with timing that is just as dramatic as a winning streak by the Oakland Athletics in this year's Brad Pitt vehicle "Moneyball."
Come to think on it, what is called moneyball is, essentially, economic theory applied to baseball. What about returning that to its primary source?
The quick explanation is that the Athletics, run by General Manager Billy Beane, needed, in 2002, to replace three star players with a decidedly weak bank account. His assistant, Peter Brand, points out that most player recruitment is done by an established and expensive system that is succinctly described as dug-in addiction to star players. Even people managing the game of professional baseball, in other words, are star-struck. Of course, stars fill a stadium but they do not necessarily win ball game.
Back up the truck. Economically, that means the U.S. economy does not need to rely on General Motors (a star corporation if ever there was one) to lower the unemployment rate. Forget IBM or Dell or Kraft Foods or Pfizer. They've all had their day. That era has come and gone.
Let's hope that's wrong in the absolute. However, just to make the point, the numbers quickly bear this out. Automatic Data Processing said Wednesday that the private sector added 170,000 jobs in January and only 3,000 of those were at companies with 500 or more workers.
In the same news cycle, CareerBuilder said big firms were beginning to hire again, including a target of 13,000 new jobs at Starbucks.
Meaning no disrespect whatsoever, but serving coffee is not going to put the United States of America back on its feet. Again meaning no disrespect, pouring coffee would have trouble helping Liechtenstein, let alone the USA.
Big firms were not only announcing intentions to hire in January, they were announcing intentions to lay off workers. On Thursday, outplacement firm Challenger, Gray & Christmas said announced layoffs spiked in January, rising 28 percent over December and 39 percent over January 2011.
CareerBuilder counted 12 firms ready to hire more than 38,000 people over the course of the year. Challenger, Gray & Christmas, meanwhile, counted 53,486 announced furloughs in January alone.
Economically speaking, when spring rolls around, let's root for the little guys. Let's root for the A's!
In international markets Friday, the Nikkei 225 index in Japan fell 0.51 percent and the Shanghai composite index in China added 0.77 percent. The Hang Seng index in Hong Kong was flat, rising 0.08 percent, and the Sensex in India gained 0.99 percent.
The S&P/ASX 200 in Australia lost 0.39 percent.
In midday trading in Europe, the FTSE 100 index in Britain rose 1.26 percent while the DAX 30 in Germany rose 1.52 percent. The CAC 40 in France rose 0.78 percent and the Stoxx Europe 600 added 1.19 percent.
Most Popular Stories
- Bently Creates Alabama Small Business Commission
- California King Fire Roars Out of Control
- Is Alibaba's IPO Price a Fairytale?
- Mercedes Rolls Out S550 Plug-in Hybrid
- Kardashian: Kanye Never Told Fan in Wheelchair to Stand Up
- SBA Kicks off Hispanic Heritage Month
- CalPERS Pulls Out of Hedge Funds
- U.S. Tobacco Growers Lose Last of Price Supports
- Poverty Rate Drops for First Time Since 2006
- Two-thirds of Hispanics Doubt Media Accuracy