April 7, 2007

Major Surprise On Jobs

The economy continues its growth under the stewardship of the Bush administration. Unemployment fell to 4.4%, a five-year low, as the nation added 180,000 jobs last month. Wages also rose faster than inflation in March, indicating continuing strength and real gains for workers:

It just keeps going.

The job market showed little sign of losing its vigor last month as wages climbed and job growth rose, the Labor Department reported yesterday.

Economists said the numbers were consistent with an economy that was being supported by strong consumer spending, with considerable hiring in businesses like restaurants, bars, department stores and educational services.

In all, the Labor Department said that employment outside the farming sector grew by 180,000 in March. And in another sign of the job market’s resilience, employment growth in January and February was stronger than the government first reported.

The national unemployment rate also edged down last month to 4.4 percent, from 4.5 percent, matching a five-year low that it reached briefly in October.

What has kept the economy moving? According to the New York Times' Jeremy Peters, "the tireless American consumer." With wages continuing to rise in real terms, consumers spend more money, creating more energy and expansion.

The average wage rose to $17.22 per hour. Overall compensation over the last year rose 3.2%, outstripping inflation and arguing against the notion that employment increases come from so-called McJobs. The overall ratio of working Americans rose as well, from 63.2% in February to 63.3% in March, which again shows real growth for employment.

All of these show good signs for continued, moderate economic growth -- the kind that will keep inflation at bay while creating more and more opportunities for Americans to prosper. The Bush tax cuts continue to do their job by keeping capital in the market and earnings in the pockets of earners. The repeal of those cuts will take that capital out of the market, where it creates jobs, growth, and wealth, and stick it in the coffers of the federal government, where it does nothing but allow politicians to use it for pork projects and expansion of entitlement programs.

Will the Democrats learn the lesson of Reagan, Kennedy, and Bush, and keep the lower taxes that have fueled this expansion? Somehow, I doubt it. But if they don't, hopefully the voters will allow them to cut in the front of the unepmployment lines they will create.


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Comments (14)

Posted by overtaxed [TypeKey Profile Page] | April 7, 2007 8:18 AM

Tax-and-spend Democrats or borrow-and-spend Republicans? They both know how to spend, but neither knows how to manage the public finances.

Posted by John [TypeKey Profile Page] | April 7, 2007 8:19 AM

See what happens when you elect Democrats to power, the economy gets better :-)

Posted by Minesweep Vet [TypeKey Profile Page] | April 7, 2007 8:47 AM

Hey NYT, can we be "the tireless American consumer" and the "war-weary electorate" at the same time ... which is it?

Posted by reddog [TypeKey Profile Page] | April 7, 2007 10:10 AM

It's the war , stupid!

The huge amounts of deficit spending by the Bush administration to "painlessly" fund the war is the root cause of the present economic juggernaut. Happens every time there's a war. It's a great high but the hangover can be a bitch.

Posted by jiHymas@himivest.com [TypeKey Profile Page] | April 7, 2007 10:26 AM

Cap'n Ed: Will the Democrats learn the lesson of Reagan, Kennedy, and Bush, and keep the lower taxes that have fueled this expansion?

I think you'll find, Cap'n, that most economists credit low interest rates (monetary policy) rather than the Bush administration's reckless fiscal policy.

Everything has to be paid for eventually and the stimulus from deficit spending is, as reddog points out, more akin to a benzedrine rush that masks weariness until the crash comes.

America has not yet hit the fiscal wall (where you simply cannot finance your deficits without huge increases in interest rates) and it may never hit the fiscal wall, but you're headed in that direction. The funny thing is, that should you hit it, it is almost certain that it will be the Democrats who bail you out. The Republicans won't have the political room to enact the unpopular cuts that will be necessary - no more ethanol protectionism and subsidies for you, Midwest!

That's what happened in Canada. When the global financial system was stressed (1994) and years of huge deficits (largely from Conservative governments) came home to roost, it was the Liberals who chopped spending and balanced the budget.

Posted by SDN [TypeKey Profile Page] | April 7, 2007 11:09 AM

So would you agree to chop the ethanol subsidies Democrats pushed for and drill in ANWR as they opposed.

And I'd really love to see some links for those assertions on "economists" and "Canada". Wonder whose paying their bills?

Posted by typekeyspams [TypeKey Profile Page] | April 7, 2007 12:13 PM

Predictable the Statists always have a better answer, in theory.

The fact that Socialism has failed in over a hundred nations and never suceeded anywhere, doesn't prevent the true beleivers from thinkg "Next ime it'll be different".

Too bad, they never learn but are constantly successful in getting a few new idiots to agree

Posted by Bitter Pill [TypeKey Profile Page] | April 7, 2007 1:15 PM

right on jimmyhaha. truth to power, dude! It can't be Bush. He he. What a maroon you are.

Posted by jiHymas@himivest.com [TypeKey Profile Page] | April 7, 2007 4:39 PM

The effects of tax cuts on economic growth have been analyzed by the CBO

The effects of monetary policy on the housing market and the dependence of recent growth on the housing market have been very well documented. Try google and get more hits than any one person could possibly read.

There are some good charts available regarding the history of the Canadian federal budgetary balance

I'm surprised that you guys are so modest! Surely, after spending time to create such scintillating economic analysis, you want to sign your names and take full credit for your hard work.

Naturally, all subsidies distort the economy. The ethanol subsidies are just as destructive as all the other farm subsidies so enthusiastically doled out by the American government.

Posted by SDN [TypeKey Profile Page] | April 7, 2007 9:19 PM

The problem, Hymen, is that empirical real-world evidence trumps theory. Every tax cut (Kennedy, Reagan, Bush 43) has raised government revenue intake. The problem, of course is that Democrat congresscritters, joined by RINOS, have managed to find all kinds of pork to spend it on, instead of essentials like defense... and even the defense spending has had plenty of pork to buy the votes needed to get these losers on board.

Posted by Rose [TypeKey Profile Page] | April 7, 2007 11:45 PM

A young man informed me last week that America's economy isn't doing well, and the only reason our deficit has been cut in half is by the magnificent and charitable orchestration of the UN, organizing such nations AS SPECIFICALLY, FRANCE, have given us foreign aid and bailed us out of BANKRUPTCY.

He also informed me that America has NEVER been responsible for one single solitary TECHNOLOGICAL ADVANCE in our entire history.

And that we most certainly have NOT been responsible for spreading any technological advances to the rest of the world.

Posted by Bitter Pill [TypeKey Profile Page] | April 8, 2007 6:14 AM

Rose, his name wasn't Jimmyhaha was it?

Posted by jiHymas@himivest.com [TypeKey Profile Page] | April 8, 2007 9:20 AM

SDN: So it's your view that we could become infinitely wealthy by cutting taxes to zero?

Posted by jiHymas@himivest.com [TypeKey Profile Page] | April 8, 2007 11:39 AM

SDN: Oh, yeah. I think it's fair (and probably more accurate) to say that 'every tax increase has raised government revenue intake", even the ones that are designed to eliminate the taxed item, like tobacco taxes.

I've certainly never heard a politician propose the flip side of your argument - that he wants to decrease government revenue by increasing taxes.

The recent GST cut in Canada, for instance, is estimated to have cut federal revenue by $4.35-billion annually.

If you can cite any studies of the empirical evidence you cite, that seek to isolate the effects of the tax cuts from everything else that was going on, I'd love to see them.