Monday, December 27, 2010

The Economy and Labor Market in 2011


Here is a link to a story that NPR's Tamara Keith did for last Sunday's Weekend Addition.

I am cautiously optimistic about the economy's recovery. The new stimulus will help the recovery accelerate, but its impact may not be as large as predicted. We have several drags on the economy:

-State and local governments are doing "anti-stimulus". Due to balanced-budget requirements, they are raising taxes and/or cutting expenditures.
-Many home owners remain underwater or have lost a serious amount of equity in their homes. As a result, they will continue to be cautious about spending money. Further, many can't move to areas where job are available.
-Along with the 15 million Americans that are searching for a job, we have an unprecedented 9 million Americans who are working part-time, but want full-time work. Creating a large number of jobs without stoking inflationary fears will take time.

Let's end the year on a positive note. In 2010, the labor market turned the corner:

-Private sector job creation occurred in every month.
-Growth in temp employment, a precursor to full-time job creation occurred in every month except one.
-Increases in hours worked, also a precursor to full-time job creation occurred.
-Retail sales during the Holiday season are up from the previous year!

In 2011, with the second stimulus' help, the labor market will accelerate out of the turn.
Happy New Year!!!!

Thursday, October 21, 2010

African Americans and the "Great Recession"


Here is the link to an opinion piece that I just did for CNNMoney on the disproportionate impacts that the "Great Recession" had on African Americans:

If you look at reader reactions, I clearly struck a nerve. I look forward to your comments and suggestions on follow up.


Kids and Economics

You can see the segment that Christine Romans did on financial and economic literacy at:


Saturday, October 2, 2010

Economic and Financial Literacy Finally Get Their Due

This weekend (CNN's Your $$$$$) and on Monday (CNN's American Morning), Christine Romans will shine a light on economic and financial literacy. It is an answer to the following question.

Want to help stimulate the economy, spend time with your child, and reduce the chances that the financial crisis occurs in the future?

Until Christine's report and forthcoming book (Smart is the New Rich: If You Can't Afford It- Put it Down), a long-term strategy not receiving enough attention is strengthening the economic literacy of our youth. One way to prevent a financial crisis from happening again is to better educate today's youth on economic principles, such as consumption, saving, and investment. Almost all states have economic content standards that begin in Kindergarten, but as parents, we must play a bigger role.

Prior to the financial crisis, parents and teachers had few well-known resources for identifying children's books that teach kids about the importance of saving and the importance of not living beyond one's means. For several years a little known "free" resource has existed at

The concept behind the youth-oriented and user-friendly website is simple. Rutgers economics Professor Yana Rodgers and Williamsburg, VA K-5 reading specialist Shelby Hawthorne have developed a "living" catalog of children's literature that teaches a wide range of economic concepts that are linked to state curriculum standards. The site provides quick lesson ideas that are based on current research in economics and education.

Based on objective research criteria, you can click on an economics concept and obtain a list of the site's "Top Five" choices for acclaimed children's books that use enjoyable stories to teach economics.

The site encourages return visits. It profiles a new book each month, reviews new children's books and identifies their economic content. I am a labor economist , so one of my favorites is "Click Clack Moo," a wonderful story about some cows who go on strike because they want blankets and a duck, who serves as the arbitrator.

For sure, using will not solve the credit card problems that many young adults have gotten themselves into. Nor will it solve the sub-prime lending mess that played a big role in dragging the economy into the worst recession since WWII. However, the site provides some neat stocking stuffer ideas for the holidays that will help your children become savvier and smarter consumers.

In short, you will be investing in your child's future and the nation's return to prosperity. If these economic rationales are not clear, then maybe you, too, will benefit as you read to your child.
Enjoy the Site and enjoy the time with your child!!!!

Friday, August 6, 2010

July 2010 Jobs Report

Friends, today's Bureau of Labor Statistics July jobs report revealed that the private sector added 71,000 jobs. The good news is that this marks 7 consecutive months of job growth and the July increase may signal that the June lull or pause (+31,000) could be over. We will know next month.

Should we worry about the weakness of these numbers? On one hand no. This pattern happened after the 2001 and 1991-92 recessions. At the start of these recoveries, we got several strong months of job creation, followed by a lull, and then a return to stronger growth. Assuming we don't get bumped by breaking news, you can hear me talk in more detail about this issue on this weekend's Your $$$$ on CNN.

Further, because of the weak job creation and declining prices (yes, declining), many fear we are headed to a period of deflation. For what this means and should we be concerned, listen to my interview on NPR's The Takeaway:

On the other hand, yes. These job creation numbers are not strong enough to reduce unemployment and part-time employment. The impact of the $787 billion stimulus has started to wane and the economy clearly needs help standing on its own two feet.

Several months ago, I participated in a small discussion with the Speaker of the House and her committee chairs. We talked about ways to create jobs. I offered the idea of a tax credit and/or wage subsidy to nonprofits like the United Way who hire unemployed and/or part-time workers. These Americans would work for 3 to 6 months on specific projects (e.g., resource development), helping to rebuild their lost capacity.

Do you have any ideas on how to provide incentives to create jobs? If so, please share them with me and if promising I will pass them on to the Speaker and friends in the White House. Yes, I will give you credit. I look forward to hearing from you.

Saturday, January 9, 2010

New Study: Is the stimulus landing in the Neediest Communities?

Happy New Year!!!

Here is a quick alert to a new study on the stimulus' job impacts.

The study shows that the contracts, loans, and grants in the American Recovery and Reinvestment Act of 2009 (ARRA) have reduced or reversed job losses in key states. During October and November 2009, employment levels were higher than expected in 33 states.
Overall, the stimulus money is landing in states with the weakest labor markets. Unfortunately, the stimulus in 16 high-unemployment states -- such as Michigan, Florida, Rhode Island, Oregon, and North Carolina -- may still be in the pipeline or too small."

Even with the national loss of 84,000 jobs during December (November was revised for an increase of 4,000), since October the stimulus has added an additional 2.0 million jobs. Almost 1.8m were in the private sector.

Here are the major industry breakouts: Construction (+190,000), Durable Manufacturing (+408,000), Professional Business Services (+794,000), Trade (+62,000), Transportation (+79,000), Utilities (+6,000) Information (+75,000), Financial Activities (+164,000), Education and Health Services (+47,000), Leisure and Hospitality (-131,000) and Other Services (-42,000). These patterns are consistent with the type of projects that have been funded.

Want to read more? Go to for the full report and state estimates.