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With firms cautious about hiring the number of temporary workers is increasing. About one fourth of new jobs created in the second quarter of 2012 in the U.S. were for temporary workers. In June 2012 of the 80,000 jobs created a third were for temporary workers. About 8 million Americans work part-time. This is an increase of half a million since March 2012 for people unable to find a full time job. The number of full time workers has declined by 700,000 since March 2012, and self employed workers have increased by 381,000 since March 2012. This gives the picture of a labor market with employers unwilling to commit and hiring temps, using overtime to meet demand.

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With 40% of the unemployment shown as longterm unemployed, U.S. Federal Reserve policies are focussed on bringing down these levels, which pose a risk to the productive capacity in the U.S.

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This editorial in the New York Times is strongly critical of former president Barack Obama for accepting $400,000 in speaking fees from Wall Street for a single speech. It says the news is causing people to question the ideas and words presented by Obama in his books about the dangers of losing sight of the interests of ordinary people. It gives the impression says the NYT, that Obama is cashing in like everybody else, and that his talk was empty. The editorial says the millions raised by Hillary Clinton led to her defeat in the election. Obama is reported to plan a foundation with the work of training a new generation of political leaders. This NYT editorial says it would be better to stay true to vision and purpose, to walk the talk for president Obama, especially now that a recent poll shows two thirds of voters, including about half of Democrats say that the Democratic Party is out of touch with the interests of the American People. By associating this closely with wealthy donors leading Democrats contributed to this. During a period when some of the remarkable achievements of the last fifty years such as the European Union are being called into question, when ordinary working people, young people and older people are struggling, this is all the more a tone deaf approach by politicians. The idea of helping train a new generation of political leaders through a foundation sounds bizarre in this context, and seems to suggest politicians believe there is always a solution through marketing their audacity and money.   ...

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Alan Meltzer is a respected voice on US Federal Reserve policies since the time Paul Volcker was Fed chairman He says the Bernanke Fed is making some serious policy mistakes. The first is concentrating on near term events, such as business response to Obama administration policies, over which it has little influence, while neglecting the long term consequences of its policies. The second is its effort to tackle unemployment by interpreting its mandate as a dual mandate of tackling both unemployment and inflation. By tackling one at a time, he says, the Fed is likely to fail totally. The US is unlikely to not feel the inflation that is going on around the world. By ignoring the changes in money supply growth the Fed is making another mistake. His advice is for the Fed to increase interest rates it controls to 1%, to signal that it is aware of inflation risks. Second, the Fed should annonce a specific, detailed plan explaining how it will reduce $900 billon of the $1 trillion banks continue to hold in excess of the legally required reserves. Third, the Fed should end QE II, the most recent round of treasury bond purchases. Meltzer says if the Fed waited for two more months in Nov 2010, it would have found that a double dip recession was not about to occcur and it could have held off from pursuing QE II. Meltzer emphasizes that slow growth and unemployment is not a monetary problem, because of the ample liquidity already in the financial system. Uncertainty about government policy and the future direction has been clarified by the election which will help put the economy back on track. Philadelphia Fed chairman expresses similiar views in other articles and an interview with O'Grady of WSJ....

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The wars in Afghanistan and Iraq by one estimate have already cost 1 trillion dollars. By comparison World War II cost 4 trillion dollars in inflation adjusted dollars. The figures are from the Congressional Research Service, and show the pressures to control spending. The reason that civil society is not very disturbed even as these wars cost so much, is that so far these costs in 2008 for example were 1.2% of GDP, creating the danger that these wars can be carried out by a political leadership without the nation feeling the strains of the war. This may change with higher unemployment, and the feeling that not much is gained, that this money can be used in better ways to rebuild the US economy and infrastructure.

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The Wall Street Journal CEO Council which met in Washington for a 1 day conference provided some idea about what CEO's are thinking. Laurence Meyer a former Federal Reserve governor said he projected a 4% annualized contraction in output in the 4th quarter and a 2% annualized contraction in output in the first quarter of 2009, and the US unemployment rate exceeding 8% by the end of 2009. That does not include impact of alarge stimulus program by the incoming Obama administration. Asked to vote by electronic device only one out of 93 CEO's said it will be 6 months before the economy returns to a normal growth rate, almost 80% were expecting a slow economy through 2009 and 2010.

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U.S. Federal Reserve chairwoman, Janet Yellen, says the Fed's promise to be "patient" before raising interest rates means it will hold off for 2 months to check economic conditions before taking action. This would put the decision off till June 2015. The Fed will look at a range of factors including inflation, says Yellen. Yellen's comments to the Senate Banking Committee on Feb. 24, 2015 were- "I don't want to set down any single criterion that's necessary for rate increases to occur. We will be considering a range of evidence that pertains to the inflation outlook." In testimony Yellen said she wanted to be "reasonably confident" that inflation will return to 2% before raising rates. The Fed's measure of inflation, Commerce Department's personal consumption expenditures price index is below the 2% inflation target of the Fed for 52 of the past 68 months, and for 34 consecutive months.

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Robert Doll, equity strategist for Black Rock, the world's largest money manager, says the growing population of the U.S. will drive economic growth in the next decade compared to Japan and Europe. He says that over the next two decades the U.S. work force will grow by 11%, Europe's will decline by 5%, and Japan's will decline by 17%. China's population growth will be only slightly more than that of the U.S. during that period and Doll expects China's growth to slow. He sees America as the best bet in a bad neighborhood. Higher immigration in the U.S. is a huge positive, as he points out economic growth is simply the product of the change in the size of the work force multiplied by its productivity. And America's productivity is good enough compared to other nations, is how Doll sees it. In 1995 the U.S. produced 25% of the world's goods and services, it was still 25% in 2010 says Doll. Other economists have pointed to this and observed a similiar pattern for most of the twentieth century. Doll sees this pattern continuing. India's population will show signficant growth and he sees greater opportunity there for long term investing. Doll sees a decoupling between U.S. stock markets and high unemployment. Most of the large U.S. companies generate a large portion of their sales and profits overseas. He estimates 40% of the business of these companies is overseas. Doll's estimate is for 70% of the incremental earnings growth of the S&P 500 companies coming from overseas markets. He also expects higher inflation with the Fed keeping it from getting out of control, and deficit cutting efforts to cut some trillions over the years. He sees favorable prospects for equities based on the money growth being strong and credit markets being good....

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This WSJ editorial comments on the low U.S. employment to population ratio of 58.9% in March 2014. It was 62.2% on average in 2007. This is the share of all potential workers with a job.

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This Journal editorial looks into the jobs numbers for September 2012 that showed unemployment decreasing to 7.8% according to the household survey. By taking the numbers as they are in the Labor Dept. surveys and setting aside skepticism it provides useful insights into the condition of the labor market. It cites the reason for some of the skepticism about the numbers- the 873,000 jump in employment shown by the household survey which looks at 60,000 households. It is the largest increase in employment for one month in 30 years says the Journal. The household survey finds that 582,000 of the 873,000 jobs are "part-time for economic reasons" in the survey's words. The number of part-time workers for economic reasons went up from 7.7 million in March 2012 to 8.6 million in September 2012. This also returns the focus on U-6 the measure of unemployment that Fed chairman Bernanke and experts looks at. This has remained the same for Sept. at 14.7% and includes the number of people working part-time who cannot find full time work. Another useful statistic for insight into the labor market is the decline in household incomes. Studies of Census data show a $4019 decline in median household income from Jan 2009 to June 2012. And the long term unemployed represent about 40.7% of the employed in recent data, an unusually high number that worries Mr. Bernanke. By looking at the broader picture one can get a better sense of the labor market....

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The U.S. jobs added for Dec. 2011, are 325,000, according to ADP figures, but the reliability of these figures has been questioned because of the different methods used in calculating the number. For Nov. 2011, the ADP number for private sector jobs added was 206,000. The same number from the Labor Department was 140,000. For June 2011 there was wide divergence- the ADP showed private sector jobs added as 157,000, the same number from the Labor Department was 57,000 jobs. For December 2010, ADP reported private sector jobs increased by 297,000, and official numbers showed 113,000. For December there are seasonal issues as well that affect the figures. Other factors affecting the jobs picture is the loss of jobs inthe government sector, and the gains in jobs predominantly coming from poorly paid retail and restaurant industries and fewer job gains in the better paid construction and manufacturing industries.

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Temp hiring is seeing a slowdown in Aug-Sept 2012. It declined by 2000 jobs in Sept and made no gains in August. By contrast in the first 6 months about 21,000 temp jobs were added each month. The historical correlation since 1990 of changes in temp employment with ensuing job growth in the next 3 months is 77%. This indicates job growth in the fourth quarter of 2012 will be about 72,000 jobs a month says Irwin, not enough to keep up with population growth, and likely to lead to an uptick in the unemployment rate. The results at temp hiring firms Manpower and Robert Half confirm this trend.

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Hilsenrath goes over some of the troubling signs behind the postive job numbers for April 2014. Part time workers looking for full time work actually increased in April 2014 to 7.5 million. More individuals in prime working years of 25-54 dropped out of the work force discouraged and stopped looking for work, with the percentage for this group who are working dropping to 80.8% in April 2014. Wage growth and worker productivity was stagnant. Donald Kohn, a former vice chairman of the Fed, joins other economists who are puzzled by the lack of wage growth and the large number of long term unemployed behind the positive job numbers of 288,000 for April 2014.

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Dennis Berman takes a very instructive and reflective look at what happened in history, the thirties when something like what we are seeing now happened, a huge global downturn. One thing that is being repeated is the tendency to think that things will recover maybe in 2009 or 2010. But oftentimes this is not the way it turns out. President Hoover said to the American people in May 1930, " I am convinced that we have now passed the worst and with continued unity of effort we shall rapidly recover." Hoover is now seen negatively but a visit to the museum section of the Hoover Institution at Stanford University shows that he was a geological engineer, well travelled to other countries, was President of Stanford when it was a small school, and was active in relief efforts for Russia in the years of civil war after the first world war. Was he less compassionate than FDR, was he less educated, and less aware of conditions in other countries than FDR, and less determined than FDR? Could it be that he did not realize the depth of the downturn that lay ahead and for this reason failed to take more aggressive action? WIth FDR, less well known as Berman points out, is the period of 1936 and 1937 covered in the book "The Forgotten Man", a popular history of the Depression by Amity Shlaes. The Federal Reserve used New Deal laws to tighten reserve requirements on the nation's banks. The goal was to make the banks stronger, but the unanticipated result was that the banks tightened still further. This aggravated things in the economy when it was still stuck in difficulties. The Dow Jones Average fell by more than a third between August 1937 and January 1938. Unemployment jumped. Historians call it the 'depression within the Depression. Just a year before this period, FDR predicted in 1935, "Never since my inauguration in March 1933, have I felt so unmistakably the atmosphere of recovery." Berman reminds us that the main force in the economy at this time however well intentioned is the government. And the government is at the whims of politicians, and the error proneness of human beings in positions of responsibility, with so many decisions taken on an ad hoc basis, responding to emergencies and dire situations as they arise, with not enough time for careful thought, and often with little sleep. The AIG intervention has already taken $177 billion in government money in a few months, and everything is being done on a crash basis with little preparation mostly in response to surprises popping up in financial markets. As Frank Rich points out the danger to the President's plans and vision is not from the work outlined for education, energy, health care, or Republicans, as much as it is from this uncertain element about available capital to make the wheels of the economy move again to sustain employment and incomes....