Explaining Southern California's economy

Recovery might be slow, but it isn't uneven

Scott Olson/Getty Images

Workers build a Jeep Compass at the Chrysler assembly plant in Belvidere, Ill. Manufacturing has been a high point for the recovering U.S. economy, reflecting the rebirth of the U.S. auto industry.

Strange assertion from the L.A. Times today, as some new construction and manufacturing data comes out:

The economic recovery is happening at a very slow and not especially steady pace, according to new indicators that include construction spending sliding to a 7-month low and ever-so-slight improvement in the manufacturing sector.

Construction, given its exposure to the cratered housing market, should really be viewed off to the side of the rest of the data. The real meat of the matter is in manufacturing:

The factory outlook was more optimistic, though not by much. An index on the manufacturing sector from the Institute for Supply Management was up to 53.4 in March from 52.4 in February.

Any level above 50 – which production facilities have managed to maintain for more than two and a half years – represents growth. Fifteen of the 18 industries in the survey, including apparel, machinery and transportation equipment, reported overall expansion.

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It was a meh week for the stock market

Price Of Oil Rises Amid Stock Market Volatility

Mario Tama/Getty Images

Traders work in the oil options pit on the floor of the New York Mercantile Exchange on August 11, 2011 in New York City.

First the Dow hit 13,000. And almost immediately, as if it we suffering a financial bout of triskaidekaphobia, the market retreated. And then it spend the week basically going nowhere, despite the launch of a new Apple iPad, a solid February jobs report, and a sense that the worst might be over for Greece and that whole neverending European debt crisis.

What's are the markets going to need to hit 13,000 again — and climb higher? Well, it's hard to say. Better GDP growth would help. But the real secret sauce will have to come from the Federal Reserve, which could do another round of "quantitative easing" or employ some new form of monetary policy — perhaps "sterilized" easing, with the focus on preventing inflation from creeping back into the economy.

Is Wall Street trying to force the Fed's hand? Maybe. But for the moment, it looks as if the Fed isn't quite ready to have its hand forced.

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February jobs report: Just what the doctor ordered

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

A real recovery in the U.S. jobs market is definitely building up a head of steam, but at this point it's still a slow process. The February jobs report is out from the Bureau of Labor Statistics (BLS), and while it's not a home run or even a nice stand-up double, it's still pretty solid: The economy added 227,000 jobs in the shortest month of the year. The unemployment rate remains unchanged at 8.3 percent.

That's the headline number, but what's really encouraging about this report is the revision to the January data. The BLS initially reported 243,000 jobs added, but that number has been revised up to 284,000, which means that on an adjusted basis we're getting closer to the 300-350,000 new-jobs-per-month number that would start to move the national unemployment level much lower. 

In any case, if the trend of upward revisions continues — the past two months have both been revised up the following month — then we can expect February to look better by the time the March data rolls in come April. The bottom line is that the official number came is slightly higher, by around 10,000 jobs, than both the ADP report and the so-called economic "consensus." It also beat bullish predictions that said we'd add less than 200,000 jobs and see the unemployment rate actually rise. 

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February jobs report: Better than January?

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

The Bureau of Labor Statistics (BLS) will release its February jobs report on Friday. The January report was better than expected, with the country adding 243,000 jobs and the unemployment rate falling to 8.3 percent. The big question for February is, "Will the improving trend continue?"

Chances are good. The ADP report — which hasn't been all that reliable a predictor of the BLS data of late — came out today and said that the economy had added 216,000 new jobs, barely beating the Bloomberg consensus, which expects a nearly identical 215,000. 

Meanwhile, Business Insider engaged in a very elaborate piece of analysis and came up with — wait for it — 285,000! That would be, as BI notes, the best monthly jobs report in six years. I like that BI zeroes in on auto sales as a key predictor. February saw sales rise to a 15-million annual pace, more than two million better than 2011. 

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Unemployment: We may have finally turned the corner

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

The national unemployment rate has been falling faster that anyone expected it would. You can debate the numbers. For example, are we currently at 8.3 percent because the so-called "long-term unemployed" have given up and dropped out of the labor force altogether? Maybe. But there's no arguing other data, some of which is starting to look a lot better.

This is from Bloomberg:

The number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing.

Applications for unemployment insurance decreased 2,000 in the week ended Feb. 25 to 351,000, Labor Department figures showed today. Economists forecast 355,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments also declined.

[...]

The four-week moving average, a less-volatile measure, fell to 354,000, also the lowest since March 2008, from 359,500.

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