Let the good times roll -- 249,000 new jobs!

[Seeker]

my reaction:

http://apolyton.net/forums/showthread.php?s=&threadid=136219

anyone else feel the terror?

[pchang]

It turns out that average job growth for all of 2004 turned out to be 183,000 per month. I guess this new recovery has been going on for over 18 months now.

[DanS]

Originally posted by Seeker
my reaction:

http://apolyton.net/forums/showthread.php?s=&threadid=136219

anyone else feel the terror?

To be fair, that insterstellar oil stuff was a thought exercise, not an actual proposal.

I have been wrong with regard to oil so far. I thought prices would moderate. And if they didn't moderate, I thought our economy would run off the rails. But prices have gone up even more and the economy is chugging along at a good, measured pace. I still think that the price of oil will go down a lot. So I guess I'm doubling up on this bet.

Edit: To be clear, the reason why oil will go down in price a lot is because even the most marginal of oil producers are making good money off of oil nowadays and have an incentive to increase production. This state of affairs isn't in the long-term interest of the oil-exporting nations.

[snoopy369]

I'm not sure I agree with that reasoning, DanS. OPEC handles a huge chunk of global oil production, and is pretty tight-fisted when it comes to oil production levels. If Canada or Finland or some other relatively minor oil producer chooses to add a few percent more oil to the market, they'll do well monetarily, but they won't significantly impact the oil prices as a whole.

Ultimately, oil is really a limited resource - and as supply globally decreases, which WILL happen at some point, prices will go up - until/unless alternatives are developped. That's not really happening right now - not fast enough anyway - so prices will continue to go up ... and OPEC isn't going to flood the market to reverse that trend significantly, any more than it's going to risk prematurely running out of oil ...

[DanS]

Canada is a classic example. Canada is making money hand over fist in the oil sands, which by all rights shouldn't be very profitable. But at these prices, it pays hugely to increase capacity. This capacity will be there pretty much forever.

Every barrel of oil exported from a non-OPEC state that replaces an OPEC barrel of oil is bad news long-term for OPEC. OPEC's long efforts to run everybody non-OPEC out of the business by having rock bottom prices are being set back decades.

[pchang]

DanS is wrong about oil

Global demand for oil has outstripped the capacity of any one organization to control its price. The price of oil will temporarily stabilize at higher and higher levels until a suitable alternative becomes viable. At that point, the price of oil will stabilize for good or perhaps even drop a little.

[:) Smiley]

191,000 new jobs per month, hmmm

295,700,000 people in the USA
Annual growth rate of 0.92%
Equals 226,000 new Americans per month.

147,000,000 Americans are in labor force or unemployed, meaning roughly 1/2 work or are looking for work.

Equals a demand for 113,000 new jobs a month.

So there's about 80,000 more new jobs than needed to keep with capacity per month, not bad, so long as the job counts are by worker and not by job, as there are people who work multiple jobs.

The service side of the economy created the lion's share of the jobs. Retailers added 50,000 workers, in part reflecting job growth at automobile dealers hiring to cope with a surge of shoppers enticed by special sales incentives.

The size of the auto sales industry is disturbing; there are more people selling cars than making cars. I question how sustainable this is.

[pchang]

And hence, the economists estimates that it takes 150,000 new jobs per month to keep up with population growth.....

As for builders vs. sellers - you will find the same ratios for almost every product there is. How many people do you think sell digital cameras vs. build them?

[DanS]

Re: DanS is wrong about oil

Originally posted by pchang
Global demand for oil has outstripped the capacity of any one organization to control its price. The price of oil will temporarily stabilize at higher and higher levels until a suitable alternative becomes viable. At that point, the price of oil will stabilize for good or perhaps even drop a little.

That's only a temporary phenomenon and would only become permanent if OPEC doesn't get with it and invest in much more production.

The percentage of oil used that is supplied by OPEC is going up, not down. That's the long-term trend. And OPEC hasn't stopped being a cartel, last I checked, even if it misjudged demand this once.

[:) Smiley]

Originally posted by pchang
And hence, the economists estimates that it takes 150,000 new jobs per month to keep up with population growth.....

As for builders vs. sellers - you will find the same ratios for almost every product there is. How many people do you think sell digital cameras vs. build them?

Cars take considerably more people to build than digital cameras, so you'd expect the ratio to be lower.

[Adam Smith]

Originally posted by mrmitchell What does "seasonally adjusted" mean for labor statistics?

Simple explanation:

Suppose you have data on how many people are employed in Arkansas every month. You notice that every December over a period of years the number of people employed goes up by 10 percent due to Christmas retail sales. If employment goes up by 11 percent this December, then employment is up by 11 percent on an unadjusted basis, and by 11 - 10 = 1 percent on a seasonally adjusted basis. The 10 percent is what we expect to see every December anyway, so the 1 percent seasonally adjusted is the additional employment beyond what we would normally expect to see.

Originally posted by mrmitchell total nonfarm seasonally adjusted: AR added 3,600 jobs

total nonfarm not adjusted: AR lost 700 jobs

This is the above situation in reverse. AR lost 700 jobs unadjusted. But they normally lose 700 + 3,600 = 4,300 this month for whatever reason. This means that there is additional employment of 4,300 - 700 = 3,600 beyond what we would normally expect. 3,600 fewer people lost jobs than they normally do this time of year in AR.

[Ted Striker]

Re: Re: DanS is wrong about oil

Originally posted by DanS


That's only a temporary phenomenon and would only become permanent if OPEC doesn't get with it and invest in much more production.

The percentage of oil used that is supplied by OPEC is going up, not down. That's the long-term trend. And OPEC hasn't stopped being a cartel, last I checked, even if it misjudged demand this once.

I don't know DanS.

It seems to have been "temporary" for the past few years.

With China growing at breakneck speed, it only will get worse, unless we invade the moon and get the oil fields under our control.

[KrazyHorse]

Re: Re: DanS is wrong about oil

Originally posted by DanS
The percentage of oil used that is supplied by OPEC is going up, not down. That's the long-term trend. And OPEC hasn't stopped being a cartel, last I checked, even if it misjudged demand this once.

I dispute your assertion.

[KrazyHorse]

Basically, in the wake of the dual oil crises of the 1970s, non-opec production reached a high of 71% of total production in the early 1980s. Throughout the 1980s and early 1990s opec production recovered to the point where the split is now 60-40, where it has remaned fairly stable for the last decade.

[KrazyHorse]

Though of course OPEC's reserves (conventional reserves, that is) are so much larger than non-OPEC conventional reserves that without such unconventional sources as the tarsands the day is quite possibly rapidly approaching that non-OPEC suppliers will not be able to keep up.

For instance, the US and UK have basically pumped themselves dry, and cannot hope to maintain previous levels of production.

Saudi Arabia is sitting on giant amounts of reserves, and can continue pumping at the current rate for a hundred years.