The jobs crisis:

Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 422,000, the Labor Department said on Thursday, less than economists' expectations for a fall to 415,000.

Someone should do something. Quick, Austerity Now!

The bar is very high for an extension of the [QE] program and there is little or no political will for fiscal stimulus amid a ballooning budget deficit and high headline inflation.

Not to worry says an economist at the New York Fed, who says we'd never repeat the mistakes of 1937:

Via Atrios, Brad DeLong:

"May’s ADP Report estimates employment in the service-providing sector rose by 48,000, marking 17 consecutive months of employment gains while employment in the goods-producing sector fell 10,000 following six months of increases. Manufacturing employment fell 9,000 in May following seven consecutive monthly gains." [. . . This was well below the consensus forecast of an increase of 178,000 private sector jobs in May. [. . .] This is a very weak ADP report - and more evidence that the BLS report will be below consensus on Friday.

Austerity Now!

Speaking for me only

There is mounting evidence that the economy is in difficulty. In addition to the now rote +400k new jobless claims weekly report, yesterday, Brad DeLong discussed the downward trending estimates of economic growth:

Time to push the panic button. Macroeconomic Advisers is revising their tracking forecast of real GDP growth in the second quarter. It now looks as though, come July 1, that there will have been no gap-closing in the six quarters since the start of 2010.

Krugman writes:

Via Kevin Drum, the WSJ reports:

Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom. [...] Prices are decelerating in large part because the many foreclosed properties that often sell at a discount force other sellers to lower their prices. Mortgage companies Fannie Mae and Freddie Mac have sold more than 94,000 foreclosed homes during the first quarter, a new high that represented a 23% increase from the previous quarter. More could be on the way: They held another 218,000 properties at the end of March, a 33% increase from a year ago.

(Emphasis supplied.) Tim Geithner has HAMP'd us and he may have "HAMP'd" Obama's reelection.

Speaking for me only

Writing about the the ignorance of the WaPo Ed Board, Dean Baker writes:

The piece got off to a bad start early, telling readers: "The unemployment rate remains stuck at 9 percent of the workforce, up from 8.8 percent in March. But, good news: The higher rate reflects job-seekers reentering the market because their prospects are better."

Actually, this is not the reason that the unemployment rate increased to 9.0 percent. The Labor Department's household survey showed a 205,000 increase in the number of people categorized as unemployed and a drop of 190,000 in the number of people reported as working. So, almost the whole change from March to April is explained by people going from being employed to unemployed, not new entrants to the labor market.

One basic mistake folks make when discussing the unemployment rate and the monthly jobs information is not knowing that these are two complete different and independent surveys (see David Leonhardt.) You would not know it from general reporting, but the household survey, from whence the unemployment rate is produced, reported a loss of 200k jobs last month (in stark contrast to the establishment survey which reported 268k jobs gained.) Consider Steve Benen:

Uh-oh:

The number of people applying for unemployment benefits surged last week to the highest level in eight months, a sign that the job market continues to struggle to gain any momentum.

The Labor Department said Thursday that applications rose by 43,000 to 474,000 in the week ended April 30, the third increase in four weeks. The four-week average, a less volatile measure, rose for the fourth consecutive week to 431,250.

Atrios:

As I've said many times, if the economy fails to turn around sufficiently in time for the election it will in large part due to the failure of HAMP. It was bad in that it screwed a lot of individuals and failed to help enough, but it was also bad because it failed to help the macroeconomy.

From the rortybomb link:

Gagnon earlier in his talk said that “one of the biggest goals [. . .] was to push down the mortgage rate to spark a refinancing boom to encourage households and enable households to reduce their expenditures and repair their balance sheets and be able to spend again. That worked not quite as well as we hoped because the administration’s program for getting underwater borrowers to borrow didn’t work and I think that’s a true disaster that has no excuse. I have nothing but [. . .] blame [for] the administration on not doing this[ . . .] This could have been a huge success. [. . .]" I haven’t heard this critique before and I thought it was really interesting.

(Emphasis supplied.) I know rortybomb does not read TalkLeft but Atrios has only written about this about a gajillion times. Weird that he says he has not heard this critique before.

Speaking for me only

The "experts":

Ironically, the labor market, which until recently had lagged the economic recovery that got under way in the second half of 2009, is seen underpinning growth in the coming quarters.

Meanwhile:

New U.S. claims for unemployment benefits surprisingly rose last week to their highest level since January in a sign an anticipated recovery in labor markets may take time, a government report showed on Thursday.. Initial claims for state unemployment benefits jumped 25,000 to a seasonally adjusted 429,000, up from a slightly upwardly revised 404,000[.]

Happy Days Are Here Again!! Geithner could cost Obama his reelection.

Speaking for me only

Standard and Poors is a clown car, and I like the Lakers tomorrow. Tonight I like the Celtics, Magic and Blazers.

Open Thread.

The House of Representatives is voting on the Budget legislation, H.R. 1473. You can watch live at C-Span here.

Update: The budget deal passed. 260 to 167. Two resolutions will now be voted on. One will be on repealing the Health Care bill, the other is on blocking funds to Planned Parenthood.

Via Politico: Obama advisor David Plouffe said this morning on Meet the Press that President Obama will make a major address on the budget later this week, which will include "finding savings in Medicare and Medicaid." More from Reuters, which says the address will be on Wednesday.

Plouffe also said that even if Rep. Paul Ryan's medicare kill bill passes the House, it won't become law. (Does he mean it won't pass the Senate or Obama will veto it?)

Ezra Klein saying Obama's health care law (The Patient Protection and Affordable Care Act) already addresses Medicare problems and will do a lot more for containing costs than Paul Ryan's kill bill.

Ezra highlights two documents to make the point. One is the Congressional Budget Office's Long Term Budget Analysis and the other is Kaiser's summary of the Affordable Choice Act (the Medicare portion begins on page 8.) [More...]

President Obama briefly spoke from the White House tonight. His statement aired on the White House website and Facebook. Via CNN:

The president said the agreement "invests in our (America's) future while making the greatest annual spending cut in our history." Thanked House Speaker John Boehner and Senate Majority Leader Harry Reid for their "leadership and dedication" during the negotiation process.

I wouldn't describe this deal as historic. It's more like the all too obvious final scene of a badly scripted movie. And the spin begins. A Democratic source tells CNN:

[T]he budget deal would cut between $38 and $39 billion dollars over the 2011 fiscal year.

Reid and Boehner released this statement: [More...]