A RODNEY DANGERFIELD ECONOMY
November 7, 2006
No matter how good the news, how strong the data or how encouraging the outlook for any American striving for a better life, the economy continues to be shown in a negative light -- as Friday's job report proved again, says Investor's Business Daily (IBD).
In October, 92,000 jobs were added to payrolls. That may have been below estimates for the month, but the total first reported for August was revised upward 42,000 to 230,000, and September turned out to be nearly three times as strong as first reported -- 148,000 vs. 51,000. Bottom line: Corporate hiring is running near a healthy 150,000 positions a month, says IBD.
And that doesn't include jobs in the household survey, which measures both corporate payrolls and the hard-to-gather data on entrepreneurial jobs and self-employment. By the household measure, the number of jobs surged 426,000 in October to a total of 145.3 million, even stronger than the strong gains of the previous two months and pulling the monthly average in 2006 to 251,000.
- All this has contributed to a 0.2-percentage-point drop in the jobless rate -- to a 5 1/2-year low of 4.4 percent.
- That's lower than the Clinton-era unemployment average of 5.2 percent, by the way, and is hair-close to the level where employers start having a hard time finding workers.
- Meanwhile, wages are growing at 4 percent, a rate -- as economist and commentator Larry Kudlow notes -- almost twice that of inflation, which itself has been cut in half with the plunge in gasoline prices.
This is not rocket science, and the fact that the economy is doing well may be starting to sink in at last, says IBD. Surveys suggest the drop in gasoline prices has had a bullish effect on consumer psyches and this may be spilling over into election data.
Source: Editorial, "A Rodney Dangerfield Economy," Investor's Business Daily, November 6, 2006.
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