San Diego's Job Growth Streak Carries On

Submitted by Rich Toscano on June 23, 2010 - 5:08pm
As it has every month since January, according to the latest estimates from the state of California, San Diego's regional employment grew in May. 

But what (as I imagine some of the more bearish readers are thinking, and, perhaps, readying to inform me via electronic nastygram) of the effect of temporary hiring for the US Census?  It's a fair question.  The Bureau of Labor Statistics estimated that short-lived census jobs accounted for a over 95 percent of nationwide hiring in May.  Isn't the same thing going on here?

No, as it turns out.

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Submitted by urbanrealtor on June 23, 2010 - 8:31pm.

Riddle me this:
If the icons on the 1st chart represent months (which I assume, since there are 12 of them), why do the December levels not connect to the levels of the following?
For example:
December of 2008 is around 1,290,000 and January of 2009 is around 1,250,000.
Is it the case that our county lost 40,000 in 30 days (and similar amounts every year-end)?

Submitted by Rich Toscano on June 23, 2010 - 9:29pm.

Howdy Dan, haven't heard much from you in a while.... welcome back.

Yes, the answer is that the county (and every other county) loses a huge amount of jobs every January as seasonal holiday workers are let go.

A similar but lesser thing happens in July. That's why month to month comparisons are tricky, and it's why I did that graph that way (so you can see what typically happens in a given month).


Submitted by gandalf on June 24, 2010 - 10:23am.

Nice article, Rich. Comparatively, we do better than many other regions. San Diego has a lot going for it.

How do economists flatten the seasonal anomalies out? Is there some standard practice -- moving averages, retail excluded, etc.? Do they just scrap the EOY for trend purposes? Essentially same type of problem as correcting for census workers. Wonder if there's a standard practice.

Also, I like the articles, figures and research on this topic. Employment drives housing long-term. I don't see how we get back to a normal market with normal ratios without job and wage growth. The big bogus bailout keeps things afloat things for now. But mostly, it just looks like a long, slow, ugly unwinding. Your take too?

Any Piggs care to weigh in?

Submitted by Rich Toscano on June 24, 2010 - 5:24pm.

Thanks Gandalf. There are two typical ways to deal with seasonality. One is to just look at year-over-year changes, which makes them irrelevant because you are looking at the same month last year. The problem there is that you could miss shorter term inflection points by comparing a whole year's change.

The second is to "seasonally adjust" the numbers -- I've never looked into this much but presumably you figure out the typical seasonal effect for a month by looking at lots of past data, and you try to back out that seasonal effect. (EG if jobs typically fall 1% in Jan, but you only fell .5%, you are up on a seasonally adjusted basis). I could probably do this but I'm far too lazy and anyway, seasonal adjustments can add their own distortions too.

I agree that this is an important topic. My take on job growth has, for a while, been less bearish than what I perceive as the pigg mainstream. All that stimulus (massive govt borrowing, money creation, low rates) can have a big effect. I think we will pay a terrible price for it later, but between now and then, I wouldn't rule out the possibility of a cyclical stimulus-driven boom. Of course, I wouldn't depend on that possibility either. So I am kind of agnostic on the job growth front. FWIW the data says that jobs are in an uptrend for now; I'm just going to keep watching and charting.


Submitted by gandalf on June 25, 2010 - 8:58am.

Definitely, the stimulus is a BIG DEAL. I'm certain that's what we're seeing in the economy right now, the effects of stimulus efforts starting with Bush and continuing on through Obama.

Last time I tried to estimate it, I think the total monetary / fiscal stimulus (most of it originating from the Fed through various mechanisms), lump sum amount was somewhere around 10T-14T dollars -- the equivalent of an entire year of United States GDP.

Granted most of that funny money went to prop up the fraud, to bring various accounts into balance, and I suspect quite a bit went overseas, but still, that is a LOT of goddamn money, pulled out of thin air, or piled onto our already obscene national debt.

I wish I could say I'm an optimist but I'm not. I'm bearish, and I'm calling a double-dip post-election (I hope I'm wrong). We haven't fixed the root causes of the downturn, which center around FRAUD in the FIRE sector. And I don't think the stimulus is a sustainable economic policy.

What's the good news? Stimulus seems to be working for now and things are beginning to unwind. I think that's the least dangerous outcome given the circumstances. The other decision trees (e.g. let it fail) seem to involve quite a bit of downside risks -- system breakdowns, huge unemployment, social upheaval, geo-political conflicts, etc.

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