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A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.
Friday morning, the Labor Department will release its jobs report for January. I'll be up at the crack of dawn in Southern California to write up the numbers when they hit, so join me in the darkness with a big cup of coffee or three.
The current U.S. unemployment rate is 7.8 percent. Private payrolls processor ADP, which generates an employment report ahead of the Labor Department, said that the country added 192,000 jobs in January.
Economists surveyed by Bloomberg expect 185,000. Both numbers are higher than what we wound up getting, on a preliminary basis, from the official government data in December: 155,000.
If ADP and the Bloomberg economist brain trust are right, then we're off to a decent start for 2013 — although to really push the unemployment rate lower in a hurry, we need to add 300-400,000 new jobs each month.
The labor participation rate has declined dramatically since the Great Recession. But after the 2001 recession, it never really recovered.
Thanks to James Pethokoukis for drawing my attention to the chart above. It shows the civilian labor force participation rate from 2000-present. The labor participation rate has been a sort of "third number" when U.S. jobs data comes out each month. The other two are the headline unemployment rate — now at 8.1 percent — and the level of U.S. economic growth, measured as GDP, which came in at only 1.3 percent for the second quarter. That's troublingly low.
And what about labor participation? It's at levels not seen since the early 1980s. A couple of factors are contributing. First, unemployment is high and job creation is weak; this means that workers are out of the labor force, either drawing or having exhausted unemployment benefits. Second, people are retiring as the first wave of the Baby Boom collects its gold watch.
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Warren Buffett, chairman of Berkshire Hathaway, attends the Allen & Company Sun Valley Conference.
Billionaire investor Warren Buffett released his annual Berkshire Hathaway shareholder letter over the weekend. As Marketplace's Heidi N. Moore reported on Monday, this is a much-anticipated and closely studied document. And as one of her sources pointed out, sometimes it's more interesting to focus on what went wrong in Buffett-land than on what went right — because Buffett provides engaging details on both outcomes.
For this letter, you want to zero in on the housing market, which in early 2011 Buffett figured would begin to recover in a "year or so." Wrong! Or to quote the Great Man himself: "dead wrong." Berkshire Hathaway has several housing-related companies in its portfolio, so Buffett would ultimately like to see the long-expected bounce-back. He's optimistic — because you can't fight human nature! Or more accurately, randy human hormones:
This has been provoking much discussion today. It's a Brookings Institution report on the "re-emergence" of concentrated poverty in America. In the video, Alan Berube lays it out in brief and makes one very interesting — and alarming — marco point: In the cities of the Midwest, "the recession that started at the beginning of the decade never really ended."
The coasts have fared better. However, Berube also observes that concentrated poverty isn't just an urban phenonomeon any longer; it's moved into the suburbs. We've seen this in California. The UCLA Anderson Forecast that came out earlier this year indicated that the state is separating into two distinct regions or zones: the coast, where unemployment is moderating and growth is resuming; and the inland areas, where economic stagnation is setting in.
Not a rounding error. California was at 12 percent unemployment. Now we're at 12.1: "California's dependence on the real estate industry is going to continue to cause pain until home-building starts again. But with uncertainty throughout the economy, few businesses in any field seem willing to hire." (LAT)
Lose your job in a recession, see your future income reduced by almost 20 percent: "For high-tenure workers who experience job displacement in a recession, the losses amount to about three years of earnings at pre-displacement levels and 19% of the present value earnings of otherwise similar workers who retain jobs." (Brookings Institution)
It's springtime for car mechanics in LA: "And as the U.S. vehicle fleet ages and consumers continue to save, repair shops, analysts said, are in a good position to continue their growth." (LAT)