QUOTE OF THE DAY
Real Time Economics: Why Did the Unemployment Rate Drop So Much?
The U.S. unemployment rate tumbled to 6.3% in April as the overall labor force posted its biggest decline since October. The question for the health of the labor market: Why did all those people drop out? The details suggest it might not be for the most worrisome reasons.
The jobless rate is calculated by taking the total number of unemployed people and dividing it by everyone in the U.S. who is working or looking for work — what the Labor Department calls the labor force. When both of those numbers decline, even if fewer people got jobs in the month, the unemployment rate falls. Both of those numbers can fall for many reasons, and they’re worrisome to different degrees.
The one that raises the biggest concern is when unemployed people get discouraged with the job market and give up looking for work. Once someone leaves the labor force, it’s much harder for them to eventually find work. Many never return. That was at least part of the reason for the decline in April. The number of workers who said they weren’t looking for work because they were discouraged over job prospects ticked higher. But the number remained below the average for all of last year, and doesn’t come close to accounting for the big drop in the labor force. Meanwhile, the total number of people who moved from unemployed out of the labor force also ticked up last month, but it was very close to the average for 2013, indicating no acceleration.
Better Government Association: Where’s Lisa?
When she first won election as Illinois attorney general in 2002, Lisa Madigan told a packed room of supporters: “We will fight . . . corrupt public officials.”
That same year she told an interviewer she would tackle political corruption “even if it involves my father,” Illinois House Speaker Michael Madigan (D-Chicago), chairman of the Illinois Democratic Party.
And her own campaign website still lists “Battling Public Corruption” as a top priority.
Chicago Sun Times: CPS sets 2015 capital budget at $423 million
Easing overcrowding, repairing crumbling buildings and installing air conditioning all get priority in Chicago Public Schools’ proposed 2015 capital budget — one of the smaller budgets in recent years, officials said Friday.
“We’ve tried to be incredibly thoughtful — between the imperative of upgrading our schools and fiscal prudence,” CPS CEO Barbara Byrd-Bennett said during a conference call.
At $423 million, the budget is among the smallest of the last six years, officials said. About $260 million of the budget comes from district financing. About $134 million is made up of $91.4 in TIF funding and other “outside” funding, which includes state and federal grants and corporate and private donations.
Washington Post: The hidden weakness in this month’s jobs report
The good news from the April jobs report is that the recovery is the same as it’s always been. The bad news is that, well, the recovery is the same as it’s always been — and some workers are giving up as they realize that.
As you may have noticed, this winter was pretty cold. So cold, in fact, that the economy might have ground to a halt, as shoppers stayed home and home-building stayed weak. The initial estimate of first-quarter GDP growth was a miserable 0.1 percent — and that was after a string of disappointing jobs numbers to start the year. That’s why the April employment report was such a relief: The economy added 288,000 jobs (the most in any single month since January 2012), 36,000 more in revisions, and the unemployment rate fell from 6.7 to 6.3 percent.
That sounds like unambiguously good news. But beneath the headlines, the recovery doesn’t look quite so robust. The jobs report is really two different sets of data. There’s the establishment survey, which polls businesses about how many positions they added or lost to come up with the jobs number. And there’s the household survey, which polls households about how many of them have jobs, or are looking for one, to come up with the unemployment rate. In April, the establishment survey showed the economy bouncing back from its winter of discontent. But the household survey showed discontented workers getting discouraged and dropping out of the labor force.
WSJ: Get Ready for Regulators to Peer Into Your Portfolio
In December, the Financial Industry Regulatory Authority, which oversees how investments are sold, proposed what it calls Cards, an electronic system that would regularly collect data on balances and transactions in brokerage accounts.
If adopted, Cards would revolutionize how regulators do their jobs and could make it harder for unscrupulous brokers to bilk customers.
But some critics think it could endanger the privacy and security of investors’ confidential data. And the proposal ups the ante for Finra, which often has been criticized for letting wrongdoers slip through the cracks.
Chicago Sun Times: State, federal probes expand into Quinn anti-violence program
-Two separate law-enforcement agencies launched a new round of inquiries Friday into Gov. Pat Quinn’s now-defunct Neighborhood Recovery Initiative, marking an expansion into the dual criminal probes of the governor’s tainted, one-time anti-violence program.
“The Illinois Criminal Justice Information Authority has received inquiries from the Cook County state’s attorney’s office and the U.S. Attorney’s…office-Central District regarding the now-defunct Neighborhood Recovery Initiative. We are working with these agencies to provide all records and requested information,” said Cristin Evans, a spokeswoman for the Illinois Criminal Justice Information Authority.
Her agency fielded a phone call seeking records on the 2010 program from the U.S. Attorney’s office in Springfield, which has racked up a succession of successful state grand-fraud prosecutions, including former Country Club Hills Police Chief Regina Evans, who was sentenced to five years in prison Thursday for state grant fraud.
Sun-Times: Has Chicago become a pension fund with a city attached?
Pat Quinn has offered up a new way to pay down the pension debt cities and towns across Illinois have accumulated: increase the share of income tax revenue the state doles out to municipalities. The governor floated this proposal during his remarks at the City Club of Chicago luncheon on Monday.
Relief cannot come soon enough for Chicago. Currently the City of Chicago has more than $19 billion in pension debt. That’s five times the city’s entire 2014 operating budget.
We already looked at the state of each of these funds. See how things stack up for the city.
CARTOON OF THE DAY
