October 3, 2003
A BONE FOR DARWIN
U.S. stocks score gains on strong jobs data (Reuters, 10/3/03)
Stocks jumped on Friday after a report showing that U.S. employers added new jobs in September for the first time in eight months fired up investor enthusiasm over the U.S. economy.Take a baby and sit it in front of a screen. From a place where the baby can see you, throw a ball so that it passes behind the screen. Repeat daily. At some point, the baby will develop sufficiently to realize two things: objects continue to exist even if you can't see them and the ball will reemerge from behind the screen at a predictable time and place. Our ability to unconsciously calculate that time and place, to a high degree of accuracy, is obviously of great value to hunters on the veldt."Obviously this is very good news," said Hugh Johnson, chief investment officer at First Albany Corp. "It's not a strong number, but at least it's an increase."
Unfortunately, ever since we moved off the veldt, this ability has been more of a curse than a benefit to those of us whose jobs don't include balls (I put that inartfully, but I meant sporting goods). Everyone's first thought, on identifying a trend, is that it is going to continue on indefinately. Jobs will continue to be lost, the President's approval ratings will continue to fall, the invasion of Iraq will continue to be a quagmire, the occupation of Iraq will continue to be a quagmire: tommorow will be like today, only more so.
This isn't true, of course, and 9/11 should have shut this theory down for a generation, but apparently its hardwired into our brains and there's nothing we can do about it other than think twice.
On the other hand, we keep forgetting that things continue on even when we can't see them.
Posted by David Cohen at October 3, 2003 11:24 AMDavid:
Well put. Indeed the "Invisible Hand" is at work. In fact, that we have an expectation of what the jobs/jobless level SHOULD be is indicative of your continuation theory. Ours is a very adaptive economy. As such, the almost unpredictable ebb and flow of efficiency, and thereby jobs, is increasingly the only constant.
Posted by: John Resnick at October 3, 2003 12:45 PMJust for fun, here is the lead paragraphs on the Associated Press' story this morning on Bush's trip to the midwest. To be charitable at best, it sounds like Scott Lindlaw wrote the lead sometime Thursday morning, and then some editor pasted in the latest economic numbers 18 hours later along with the last words on the opening graph about enough jobs:
By SCOTT LINDLAW
Associated Press Writer
WASHINGTON (AP) - President Bush is touting the job-creating power of small businesses as he looks to blunt news about an economy that is not generating enough jobs.
Both Bush and Vice President Dick Cheney planned to hit the money trail Friday to raise more campaign cash. Bush was headed to Wisconsin, while Cheney had stops scheduled in Iowa and Pennsylvania.
Before leaving Washington, Bush was meeting with Bernard Kerik, the former New York City police commissioner who was in Iraq until last month to help rebuild the country's police force.
The unemployment rate held steady at 6.1 percent, according to figures released Friday on September's jobs picture, although the economy added 57,000 jobs - the first increase in eight months.
My guess would be the opening paragraph originally said the economy was losing jobs or gaining no jobs, and was altered after the new numbers came out. The new numbers cause the tone of the first graph to be at war with the facts of the fourth paragraph (but allows the lead to remain critical of Bush, if you're the cynical type that thinks the writer and editor wanted to be critical of Bush and were willing to accept an awkward opening to the story to do so).
Posted by: John at October 3, 2003 2:37 PMBack around March/April on this blog, everybody except me was crowing about the "red hot" stock market, then about 9,300 by the Dow.
Nobody, except me, was shy about declaring a trend then.
Last I looked, the Dow was all the way up to 9,400.
I happen to think the economy is in reasonable, not great, shape; but I don't evaluate it according to who I want to be elected.
Posted by: Harry Eagar at October 3, 2003 10:49 PMHarry-
March-April High DJI:8551
March-April Low DJI:7427
Friday Close DJI:9572
If third Q earns are as improved as forecast (Easy comparisons) more upside is possible. Forward looking ests, Corporate capital budgets key. Fiscal, regulatory policies are most importance in improving employment picture.
Those who thought like most on this blog have made some money during the period you mention. You are not quite the genius you think you are. Buy low still works from time to time.
Posted by: Tom C., Stamford,Ct. at October 4, 2003 5:11 PMHarry:
Thank you for stating what should be said more often - "I don't evaluate the economy according to who I want to be elected". I will always remember Bush 41 taking his wallet out at a campaign stop in 1984, and telling the crowd that the election was about who could put more money into it (not just his, I hope). That struck me as way too mercenary (especially from him, who probably never talked about money at home).
Economics is important, but not vital. If the DNC had taken Rush's bet back in 1993 (that Clinton's tax cut would freeze the economy), he would have had to fork over $1 million.
Posted by: jim hamlen at October 4, 2003 9:33 PMWhoops! - make that tax increase. Economics is not that fungible.
Posted by: jim hamlen at October 4, 2003 10:30 PM