A gasp of life

Oct 5th 2012, 12:55 by G.I. | Washington, D.C.

Nonetheless, it's worth noting that the last three months now look quite a bit better than we thought just 24 hours ago. Employment has advanced an average of 146,000 per month in that time according to the payroll report, and by 186,000 according to the household report. The proportion of the population that now has a job is at 58.7%, the highest since May, 2010.

Sectorally, the gains were concentrated in health care, transportation and warehousing, and finance. Manufacturing employment dropped, which corroborates weakness in factory activity that may reflect the slowing global economy and worries about a recession if politicians don't move the year-end "fiscal cliff".

This will be a pleasant surprise for Mr Obama, who can now claim net job gains of 325,000 over his term once annual benchmark revisions are incorporated. But it is not a game-changer. People's attitudes about the economy have been improving for a few months but are hardly at the sort of level that can allow Mr Obama to claim vindication for his policies. And today's good news could easily be followed by more bad news in the coming weeks. It's been like that for four years.

Note: Some people are wondering why there are two such divergent numbers on employment. The reason is that there are actually two job surveys. One is based on asking establishments how many people are on their payroll, which initially covers roughly a third of all payroll employment. The second is based on asking households how many people in their family are working; the sample covers less than 1% of the population. Normal statistical variation guarantees that the two typically produce different results, though this month's difference was larger than usual. In addition, the two define employment differently. If somebody works two jobs, he will be counted twice by the payroll survey but just once by the household survey. The household survey counts domestic workers and the self-employed.

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New government priorities and an enthusiasm for unconventional monetary policy are changing the way the currency markets work

Oct 6th 2012 | from the print edition

OVER most of history, most countries have wanted a strong currency—or at least a stable one. In the days of the gold standard and the Bretton Woods system, governments made great efforts to maintain exchange-rate pegs, even if the interest rates needed to do so prompted economic downturns. Only in exceptional economic circumstances, such as those of the 1930s and the 1970s, were those efforts deemed too painful and the pegs abandoned.

In the wake of the global financial crisis, though, strong and stable are out of fashion. Many countries seem content for their currencies to depreciate. It helps their exporters gain market share and loosens monetary conditions. Rather than taking pleasure from a rise in their currency as a sign of market confidence in their economic policies, countries now react with alarm. A strong currency can not only drive exporters bankrupt—a bourn from which the subsequent lowering of rates can offer no return—it can also, by forcing down import prices, create deflation at home. Falling incomes are bad news in a debt crisis.

Thus when traders piled into the Swiss franc in the early years of the financial crisis, seeing it as a sound alternative to the euro’s travails and America’s money-printing, the Swiss got worried. In the late 1970s a similar episode prompted the Swiss to adopt negative interest rates, charging a fee to those who wanted to open a bank account. This time, the Swiss National Bank has gone even further. It has pledged to cap the value of the currency at SFr1.20 to the euro by creating new francs as and when necessary. Shackling a currency this way is a different sort of endeavour from supporting one. Propping a currency up requires a central bank to use up finite foreign exchange reserves; keeping one down just requires the willingness to issue more of it.

When one country cuts off the scope for currency appreciation, traders inevitably look for a new target.

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