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Jobs, jobs, jobs: California unemployment rate falls
A solid national jobs report this morning — 227,000 new jobs added, unemployment rate steady at 8.3 percent — was followed by a psychologically significant California report, from the state's Employment Development Department. At long last, we're below 11 percent — 10.9 to be exact, for January 2012.
Bear in mind that 10.9 percent is still much higher than the national rate. In Los Angeles, it's even higher, at 11.6 percent (that's the December 2011 number). Still, the overall trend is down. After a rough 2011, we can start to feel better about the economy's momentum.
Importantly, in California we're beginning to see signs of a recovery in the housing sector. Home sales and home buildings appear to be picking up, although it's still unclear whether prices have bottomed. The market continues to be out of whack and could take another four or five years to normalize. But improvements showed up nationally and at the state level, as construction added jobs. The pace is slow, but the direction is positive.
February jobs report: Just what the doctor ordered
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.
Making too much money is the least of UC Davis head's problems
At Slate's Moneybox, Paul Collins does a deep dive into the compensation history of the chancellor at the University of California-Davis. He was evidently prompted by the controversy surrounding current chancellor Linda Katehi and her role in the pepper spray incident that occurred last year, when students were engaged in an Occupy protest.
Katehi makes $400,000, a figure that critics think might be too high for a university president. Collins calls her a "bona fide 1-percenter" and points out that UC Davis chancellor pay has "rocketed upwards in the last two decades" (he has the data to prove it).
All true, but these are the least of Katehi's worries — if she's worried about them at all. And anyone who thinks she's paid to much and that overcompensation should be held against her, especially given the pepper-spray incident...well, those folks need to dig a bit deeper into Katehi's background. They should ask if she should be getting $400,000 to run an institution that's ever likely to experience student protests or have to make quick decisions about the enforcement of order on campus.
Starbucks goes single-cup
Big news! But bad news for Green Mountain Coffee Roasters. Starbucks just announced that it will begin selling a single-cup home coffee-brewing system. This is from MarketWatch:
Starbucks said its brewer, called Verismo, will make coffee, espresso, latte and Americano drinks. Verismo will be available by the 2012 holiday season and be sold over the Internet, as well as at certain Starbucks stores and retailers.
In a statement, Starbucks didn’t give pricing information or indicate how this would affect its current relationship with Green Mountain, which this past fall began selling K-Cups with Starbucks coffee. In the first two months, Starbucks shipped more than 100 million of its branded K-Cup packs.
The single-cup coffee brewer market is growing fast, and Starbucks Chief Executive Howard Schultz has been seeking to make a strong push into it.
“We have long believed that the biggest prize within the segment is a high-pressure system that would give us the opportunity to deliver Starbucks-quality espresso beverages at home and at work for customers who desire the Starbucks espresso experience outside of our stores,” he said in the statement.
Following up on the flock of black swans
Last week, I had a great follow-up conversation with Matthew Le Merle of Booz & Co., prompted by my post on a white paper he authored for the consultancy. The paper was titled "Are You Ready for a Black Swan? Stress-Testing the Enterprise with Disrupter Analysis" and it laid out a methodology for global corporations to mitigate the impact of "black swans" — unforeseen events that can have cataclysmic consequences.
One of the things that Le Merle pointed out was that disrupter analysis can reveal greater "risk concentration" in an enterprise than was previously known. I thought this was stunning:
Risk concentration shouldn't be a revelation. Risk ought to be something that professionals can assess if not completely quantify. If the risk crosses a threshold, then they can abandon the project, trade, whatever. They shouldn't have so thoroughly botched the analysis that a black swan looms.