Last
week the "clincher" arrived with the headline, "Valley CEOs 'bullish' on hiring for 2006." As usual, the headline was picked up and parroted, literally word-for-word, on seemingly all the local radio and television
"news" programs. (Is it really "news" when you report somebody else's press release?) The sub-headline, "More
jobs were added in 2005 than expected," caused me to laugh out loud.
Apparently we've been doing something the "professionals,"
or people paid to know what the heck they're talking about, do not do. We've been keeping track! We reported last
March in, "Playing with the jobs stats," the state of California and the BLS changed their benchmarks, setting the stage, in
our opinion, to show statistical job growth by manipulating the basis for calculations.
Under this new regime, the
net of 2005 "job growth" in Silicon Valley was 25,100 (+3.0%) accompanied by a decline of -500 (-1.3%) in the reported number
of unemployed. How do you "gain" 25,000 jobs but only lose -500 unemployed? Measuring Santa Clara County "residents
employed," (which should be harder to fudge) the y-o-y number comes in at -1,100 (yes, it was negative!), which could
begin to explain the -500 unemployed?
Of course, the media focused on the most positive number. (We don't blame
them but do wish they would point out 2005 was the first year ANY net job gains were recorded since the boom.) Even
with the lack of traction on unemployed, 2005's +3% gain in "total jobs" was clearly, "better than a sharp stick in the eye,"
as my grandmother used to say.
One more factoid, then we'll get back to the point: 2005's local employment of
791.4K compares to December 1997's 925.6K, a deficit of -134K jobs (-14.5%). (The highest December was 944.3K
in 1999, which means we are still missing -153K jobs during today's "recovery.")
The point at hand was the "clincher"
article, citing various percentages of un-named CEOs and their expectations for hiring in 2006. We were in the process
of point-by-point pithy comments and snappy comebacks but instead decided to settle for the following:
Housing net# of 2005
Median$ new jobs January $0K +8.6Ku February
+$22K +4.3 March +$33K
+2.2 April +$17K +5.2 May
+$8K +5.2 June +$15K
+5.1 July -$5K -1.1 August
+$14K -2.7 September -$9K +0.1 October
+$9K +2.3 November +$1K +0.1 December
-$15K -3.8
Yes, the valley added some new jobs in 2005. However, beware the touts
telling us things will only get better in 2006. Company insiders are selling their stock at record rates(&). Executives whose business it is to "spin" news so that you will feel safe buying
their shares, are missing the correlation with housing.
Conclusion: During the months housing
prices were running up (January through August), 30,600 "total jobs" were added. The real "clincher" is once we got the first
downtick in housing prices in July, the county lost -5,500 jobs the rest of the year.
