2000 Words

Consider these charts:

As can be seen above, having a college degree is becoming worth less. And the cost continues to increase. Worst of all, one cannot default on student loans, so those who take on massive loans to fund their education will find that they are essentially slaves to the banks for life if they cannot find a decent-paying job.

I hope we can finally stop with the utterly worthless advice to go to college and pursue a career. The former is becomingly increasingly less correlated with the latter, and we are only doing a disservice to young people if we say otherwise.

Also, my experience has taught me that most of what passes for higher education is nothing more than drivel. Most of what is taught is obvious, wrong, or pointless. If you want to be smarter, go to the library and find good books to read. If you need help getting started, use a search engine to find classics of the western canon. Then imbibe deeply.

In the meantime, forget college.

Unstats for Unemployment

So just poking a bit at the news with the latest labor force data that came out yesterday..

PG headline: Region’s jobless rate falls a little.   The drop was 4/10ths of a percent was one of the largest month over month drops in a decade.  The only bigger drop was what is reported between Dec 2010 and Jan 2011 where there was a -0.7 point drop.  I bet that has more to do with some revisions in 2010 more than anything else.  Might forbode some similar out of pattern shifts at the end of this year as well.  So if that was a little, I just wonder what would constitute a moderate drop in the unemployment rate?  Honestly, it is a sampling artifact most likely, but so was the jump in unemployment rate reported last month.   Wait until the next revision when the data gets matched to more complete payroll data and I bet there will be some surprises for the region.

Trib also tried to discount it with this line of explanation “The jobless rate fell mainly because schools reopened and rehired staff, adding 7,200 jobs, state and area economists said. “  Which just isn’t true.  These are seasonally adjusted numbers being reported on.  So let’s go back over a decade and look at all the month over months changes between respective Augusts and Septembers. I am pretty sure schools always open up again in September, yet there rarely is a drop in the unemployment rate.. sometimes even an increase. So that isn’t the story at all. See:

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Period Civilian Labor Force Employment Unemployment Unemployment Rate (%) Report
2011 September 1,227,200 1,136,000 91,200 7.4 Time
2011 August 1,229,700 1,133,500 96,200 7.8 Time
2010 September 1,214,100 1,118,700 95,400 7.9 Time
2010 August 1,215,600 1,119,900 95,700 7.9 Time
2009 September 1,213,200 1,118,000 95,200 7.8 Time
2009 August 1,218,100 1,124,400 93,700 7.7 Time
2008 September 1,231,800 1,165,800 66,000 5.4 Time
2008 August 1,231,100 1,165,800 65,400 5.3 Time
2007 September 1,210,000 1,155,900 54,100 4.5 Time
2007 August 1,207,400 1,154,800 52,600 4.4 Time
2006 September 1,204,600 1,149,200 55,400 4.6 Time
2006 August 1,202,600 1,145,200 57,400 4.8 Time
2005 September 1,201,800 1,138,700 63,100 5.3 Time
2005 August 1,200,700 1,139,500 61,100 5.1 Time
2004 September 1,199,100 1,132,000 67,100 5.6 Time
2004 August 1,198,700 1,130,600 68,100 5.7 Time
2003 September 1,199,000 1,128,400 70,600 5.9 Time
2003 August 1,197,400 1,127,800 69,600 5.8 Time
2002 September 1,218,900 1,150,800 68,100 5.6 Time
2002 August 1,218,900 1,150,600 68,300 5.6 Time
2001 September 1,210,000 1,151,000 59,100 4.9 Time
2001 August 1,204,800 1,146,200 58,600 4.9 Time

and just something to ponder a bit..  Other than for September 2008, the regional labor force is the highest it has ever been in any September ever.  All while at least nationally labor force participation is down significantly over the last few years.

Anyway… just an update on my graphic showing the difference between the local and national unemployment rates.  Now at 60 straight months of faring better than the nation.  Well into historic territory for Pittsburgh where this has never been recorded before over such a long period of time.

Manufacturing Sector Growth Hits 29 Months in a Row

Manufacturing continues to be the shining star in this recovery.  Several reports out this week underscore the fact that US factories continue to post solid results in a growing US economy.

The ISM report on business reported on Tuesday that their “PMI indicates growth for the 29th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 27th consecutive month. The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (55.7 percent) corresponds to a 4.6 percent increase in real gross domestic product. In addition, if the PMI for October (50.8 percent) is annualized, it corresponds to a 2.9 percent increase in real GDP annually.”

On Monday two region reports underscored the ISM report.

Very strong rates of monthly expansion in the Chicago area extended through October. The Chicago purchasing managers composite index came in at 58.4, well above 50 to indicate monthly expansion in general business activity though at a slightly less robust pace than September’s 60.4 level. But October’s 58.4 reading, which is four tenths above the Econoday consensus, is impressive and is right at the four-month average of 58.5.

In Texas — factory activity increased in October said the Dallas Fed Manufacturing survey. The production index remained positive, suggesting growth is continuing. Other measures of the Dallas survye of current manufacturing conditions also indicated growth in October, and the pace of new orders accelerated, compared to September.

The reports summarize surveys which include businesses from all areas of the economy — surveys that continue to show exceptionally healthy manufacturing conditions in their regions.

Economic Events on November 2, 2011

The Mortgage Bankers’ Association purchase index will be released at 7:00 AM EDT, providing an update on the quantity of new mortgages and refinancings closed in the last week.

The Challenger Job-Cut Report will be released at 7:30 AM EDT, providing an estimate of the number of layoffs in October.

At 8:15 AM EDT, the monthly ADP Employment Report will be released.  Investors will be watching this number to get advance notice on the state of the job market in advance of the government’s report on Friday.

At 9:00 AM EDT, the Treasury Refunding Announcement will be released, where the U.S. Treasury states its funding needs for the next two quarters.

At 10:30 AM EDT, the weekly Energy Information Administration Petroleum Status Report will be released, giving investors an update on oil inventories in the United States.

At 12:30 PM EDT, the FOMC Meeting Announcement will be made, which will provide insight into how long the Federal Reserve plans to keep rates at 0%.  It is assumed that there will be no immediate change in the Fed funds target rate, but any hint that rates could rise in the future could have an impact on the bond market and stock market.

At 2:15 PM EDT, Federal Reserve Chairman Ben Bernanke will hold a press conference to discuss the FOMC economic projections.

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