Wednesday, September 06, 2017

Thursday: Unemployment Claims

by Bill McBride on 9/06/2017 07:46:00 PM

From Noah Smith at Bloomberg: Don't Believe What Jeff Sessions Said About Jobs

While announcing President Donald Trump’s decision to end the Deferred Action for Child Arrivals program, which protects undocumented immigrants from deportation if they arrived as children, Attorney General Jeff Sessions made a startling and blatantly incorrect claim:
"[The DACA program] denied jobs to hundreds of thousands of Americans by allowing those same jobs to go to illegal aliens."
Hundreds of thousands? How did Sessions arrive at this number? It appears that he simply counted the number of adult Dreamers (as the program’s beneficiaries are known) and assumed that each one of them had denied a job to an American.

That’s terrible economics. It’s a classic application of a well-known fallacy called the Lump of Labor -- the idea that there are a fixed number of jobs in the world, and those jobs get divvied up among people.
The Lump of Labor fallacy is frequently heard. I wrote this in 2010: Older Workers and the Lump of Labor Fallacy
Unfortunately Span concluded:
So to that Wisconsin reader who grumped, “Too many older people (professors, Morley Safer, etc.) continue to work for selfish reasons, thereby taking jobs from the young and unemployed” — I’m afraid you ain’t seen nothin’ yet.
That is a classic lump of labor fallacy. This is a common error people make with immigration - that immigrants displace other workers, when in fact immigration increases the size of the economy. I suspect we will see more and more of this age related "lump of labor" fallacy. The number of jobs in the economy is not fixed, and people staying in the work force just means the economy will be larger.
Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 239 thousand initial claims, up from 236 thousand the previous week.

• At 10:00 AM, The Q2 Quarterly Services Report from the Census Bureau.