Jobs gloom, with glimmers

Nov 6th 2009 | WASHINGTON, DC
From Economist.com
America's jobless rate passes 10% but the job market should start to improve soon
AP
IT WAS widely expected to happen at some point, but not yet. The unemployment rate in America jumped to 10.2% in October, up from 9.8% the month before, an increase that was far more dramatic than most economists had projected.
The grim milestone demonstrates that, even though the recession is apparently over, for the average worker it remains in force. The misery is actually greater than the headline number suggests: an alternative unemployment rate that includes those who would like to work but are not looking for a job, and those who are employed part-time but would rather work full-time, rose by half a percentage point to 17.5%. This rate has jumped almost nine percentage points since the recession began in December 2007, compared with an increase of 5.3 points in the regular unemployment rate. The median spell of unemployment now stands at a record 18.7 weeks.
Yet there are other signs that the problems may eventually ease, and indeed the jobs report itself, released on Friday November 6th, contains puzzling contradictions. The total number of non-farm payroll jobs fell by 190,000, or by 0.14%, led by construction, manufacturing and retailers. That was a bit more than expected, but consistent with a generally moderating pace of job losses. Payroll declines in the previous two months were revised down by a total of 90,000. A shift from downwards to upwards revisions often accompanies a bottom in jobs growth. The number of people who were employed by temporary agencies rose by 33,700, or 2%, the third monthly gain. This is usually considered a precursor to more permanent recruitment, although Capital Economics notes this gave a false signal in 2002. The number of new claims for unemployment insurance has also declined steadily in recent weeks. Employment in economies highly geared to the American market, such as those of Japan, South Korea and Canada (up until the last month), has already turned up.
The increase in GDP has not translated into jobs yet because of firms’ strong tendency to work each employee harder early in a recovery before hiring more of them. The Labour Department reported that productivity soared by 9.5% at an annualised rate in the third quarter, a rate surpassed only once since 1983 (in 2003). China can sustain such rates of productivity growth; America cannot. Assuming that sales keep edging higher, companies will soon have to boost hours, employment, or both.
If the underlying trends are constructive, why is unemployment still rising fast? In part, it is a statistical mystery. The payroll data are based on a survey of establishments covering roughly a third of the workforce which is continually revised until almost all establishments have been counted. The household survey is based on a much smaller sample of 60,000 households which is volatile and never revised. It showed a gigantic, 589,000 drop in the number of people working in October, triple the tally of the payroll report. Once the two surveys’ differing definitions of a job are reconciled, the household survey shows 914,000 more lost jobs in the past 12 months than the payroll survey. Perhaps a third of the discrepancy will disappear with forthcoming revisions to the payroll data; the remainder is a mystery.
 

Politicians will focus on how to respond to voters’ demands for action. On Friday Barack Obama was expected to sign into law a hotchpotch of stealth stimulus measures. They include some badly designed but popular measures such as letting money-losing companies claim tax refunds against profits earned up to five years earlier and an extension to the tax credit for buying a home. A third measure, extending unemployment benefits for some who have lost their jobs, will alleviate hardship and boost demand but will probably raise, not lower, the unemployment rate. Richer benefits encourage workers to look for a job rather than quit the search, and to turn down unsatisfactory job offers.
There is growing support for a tax credit for firms that hire more workers: Mr Obama is reportedly interested in the idea and Joe Sestak, a Democratic congressman from Pennsylvania, introduced a bill for one on Friday. However a similar measure in the 1970s had at best a marginal benefit according to Gary Burtless, a scholar at the Brookings Institution.
To make a real dent in unemployment would require a lot more money. Mr Obama and his Democratic allies in Congress are reluctant to spend more. Peter Orszag, his budget director, acknowledged this week that the deficits he now projects are “well above the fiscally sustainable” level and the administration is “considering a number of proposals” to bring them down. The politics are treacherous: voters rejected Democratic candidates to be governors in Virginia and New Jersey this week in part because of concerns about the economy and government spending. Mr Obama can't address both at once. Although painful, patience is the better choice: in time, the employment numbers should go his way; not so the deficit.
KACEY1 wrote:
Nov 6th 2009 6:09 GMT
The nation's unemployment rate rose above 10% for the first time since 1983 in October. This was the 22nd straight month of job losses. The unemployment rate for teenagers in the labor force soared to 27.6%.
If you considered part-time workers, discouraged workers and so called “unemployable” workers, the unemployment rate is approaching 20%. Compare to 1933 (it was 24.9 percent), the real unemployment rate is worst in 76 years.
President Bush had a 750 billion dollars stimulus package, after congress added several hundreds so called “sweeteners”, that was really 821 billion dollar stimulus package. President Obama had an 870 billion dollars (may be more) stimulus package.
Without these economic stimulus packages, the unemployment could be worse.
Federal Reserve Bank is buying Treasury Bills? to keep the interest rate down.
U.S. Government has a deficit of 180 billion dollar deficits on a budget of 350 billion dollars per year, which means every one dollar the government spends; 50 cents are borrowed from China? Japan?
Perhaps, people should forget about the entitlement mentality, the fraudulent in the social welfare is rampart?
Willing to take less pay, why the person put a ‘screw’ onto a car can make $76.00 per hour in U.S.? But, the pay is less than $1.00 in China?
Move into a smaller house, the waste of big mansion is too much?
Use sub-compact cars, and improve the public transportation. I take BART (Bay Area Rapid Transit), it costs $12.00 per round trip, that is only 1/3 of the operating costs? The system was built in 1976, car is dirty and not rapid at all. I can use the brand new subway systems in Beijing, free transfer among half a dozen lines for 30 cents. Why is such a big difference?
Send the crooks in Wall Street to jail will give ordinary citizen more confidence on this economic system than bailouts?
Why pencil pusher can make millions and millions, just like you have 100 dollar in your pocket and you bet $3,500 on a gamble table. The government will pick up the tab, if you lose. You will pocket the winning, if you win. What the hell is this?
The best way to reduce the unemployment is face the reality. It took World War Two to cut down ten of millions of people, and billions of people live in poverty for decades. Let’s hope people will learn from this.
The world leaders should come out and say the truth, we created a big bubble in the past decades, now, we need to tighten out belt and help each other. Try to create another bubble by government is not the solution….
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MattyJohnson wrote:
Nov 6th 2009 6:12 GMT
Unquestionably, moves to extend unemployment insurance are the most fiscally prudent, humane, and go directly into boosting demand for commodities. From my perch, it would make sense for President Obama to continue using his speaking abilities, to both boost confidence in markets and to keep brighter days ahead in the minds of our citizens. While there will certainly be cynicism, particularly from the Wing Nut fringe, come rebounded numbers in 2010 showing that this President and Congress’s work to remedy our poor economic position made good sense, the Democrats will keep their majority in both the House and Senate!
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TheOldMan wrote:
Nov 6th 2009 6:22 GMT
I am so confused. Back in January, Obama and the Democrats said that it was urgent to pass the $900,000,000,000+ debt funded "stimulus" in order to keep unemployment at 8%. The rallying cry was that without borrowing the money and spending it, unemployment would spike up to 8.75%. Well here we are in November, we are over 10% unemployment, and we have another 900 billion dollars of debt. So what happened? Did Obama, Geithner, Nancy, Harry, etc.. lie to me? We should have simply skipped the extra borrowing and let the country work its way through the problem.
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spillmind wrote:
Nov 6th 2009 6:34 GMT
'If the underlying trends are constructive, why is unemployment still rising fast? In part, it is a statistical mystery.'
what's so mystifying? with the dollar dropping like a stone, credit that tech start-ups depended on previously impossible to find, the deficit swelling, spending out of control, wars with no end, NO REAL BANK REFORM, it's obvious to me.
the one redeeming point in this article is that they actually included the data exempting the skewed birth-death model the US bureau of labor statistics always spins like mad to keep the medicated populace at bay.
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Tenmaou2010 wrote:
Nov 6th 2009 6:37 GMT
"Assuming that sales keep edging higher..."
That is a big IF. Consumers are burdened by heavy debt they accumulated over the years, negative equity, high unemployment and in many areas of the country, still rising foreclosure. They would be extremely cautious when it comes to spending now. The biggest spenders in the past, who were the engine of global growth, are exactly the ones who are in debt and negative equity today. "Employment ought to recover eventually," well, duh!
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albertaxy wrote:
Nov 6th 2009 6:41 GMT
Well said, KACEY1. Hope the government someday can respond to people's online reviews.
I always read reports like "jobless recovery" and "gloom but with glimmers." Are the media and the government living in denial or something?
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hohan wrote:
Nov 6th 2009 6:44 GMT
MattyJohnson
One question if nearly all of the 3.5% GDP growth is from the Government sector where are the jobs coming from? Unless the Government plans on employing 14 million people there won't be any jobs; there needs to be real incentives for businesses to hire.
Here's reality:
1. We are no farther in opening more nuclear plants (none in 30 years) then we were 9 months ago reducing our need for coal-fired plants. (would generate million+ new jobs)
2. We aren't reducing our need for foreign oil no drilling off shore. Like it or not we consume gasoline and that ain't changing any time soon. (another million+ jobs)
3. We're so hyper-focused on universal healthcare that there no common sense plans for reform. Apparently it's all or nothing with Congress.
We also need the government to stop this notion that everyone deserves a house by maintaining the housing credit. Canada has it right, large down payments for home coupled with smart interest rates reduces any housing bubble.
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neopublius wrote:
Nov 6th 2009 7:14 GMT
oh no, appears that Obama and his team are as dumb as Nancy Pelosi and the dems said Bush and his team were when they had their jobless recovery....
WHAT - how can it be that new taxes, new unfunded entitlements, new government coercion, new costs for business, new protectionism, and a higher minimum wage for teens DONT HELP CREATE JOBS (teen unemployment at 25%)????
We should not have expected Rahm "the hatchet" emmanuel to know this or care...but larry summers....I mean this is the same harvard guru who figured out that women are less apt to be scientists or financiers....and geitner at least was smart enough to see that his taxes would rise...so he started NOT paying them now.
BUT HEY - OBAMA AND MICHELLE ARE BOTH LAWYERS...SO MAYBE THEY WILL SUE CHINA TO GET THE JOBS BACK... HA
CHANGE, CHANGE YOU CAN believe in.
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Quite Like Frank wrote:
Nov 6th 2009 7:17 GMT
@ MattyJohnson:
"Unquestionably, moves to extend unemployment insurance are the most fiscally prudent, humane, and go directly into boosting demand for commodities."
Not unquestionably. In fact, those collecting unemployment insurance, which for the most part is an abysmally small amount, put that money into necessities and are already saving a surplus on top of that--a condition that hardly creates more disposable income.
"...it would make sense for President Obama to continue using his speaking abilities, to both boost confidence in markets and to keep brighter days ahead in the minds of our citizens."
Spoken like a true believer in a do-nothing administration...
"While there will certainly be cynicism, particularly from the Wing Nut fringe, come rebounded numbers in 2010 showing that this President and Congress’s work to remedy our poor economic position made good sense, the Democrats will keep their majority in both the House and Senate!"
Are you willing to put money on that? I guarantee you we are not going to sustain growth anywhere close to 3.5% in the next three years. 1.5% to 2% is going to be more like it, if that. I doubt 3.5% is even accurate to begin with. If we haven't pushed away trade partners through protectionism led by the Democrats and allowed a complete Obama administration-led downward spiral of borrowing and spending, the Dems will be lucky to maintain a majority. Furthermore, looking at lower growth numbers for the next several years, perhaps even decade, is not something coming from a "Wing Nut fringe" as you put it. It's something some of the moste astute, well-learned economic minds are forecasting.
Wake up and smell the coffee. Vote Libertarian.
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sbaddog wrote:
Nov 6th 2009 7:26 GMT
I am hoping that people that read the Economist are savvy enough to know that these economic stimuli are merely political gimmicks. The politician hopes that the timing of the spending aligns with the natural uptick in the business cycle, and takes credit. In 1982-1984, the upturn in the business cycle was aligned with a massive tax cut. It doesn't take an Einstein to know that, if you are a business owner or just a regular taxpayer, you are about to get smacked with a humongous tax hike. That will inhibit consumer spending...which will inhibit hiring...which will increase uncertainty in the job market...which will prolong the pain.
I hope I am wrong.
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Truthful James wrote:
Nov 6th 2009 7:33 GMT
Frankly, the stimus money has gone to those favored classes to prop up rather than create new jobs. The most obscene phrase used by the Administration is "saved or created jobs."
School districts got stimulus money and the NEA was ever shovel ready. At least one district in Illinois had more jobs saved than they had employees on the rolls.
The problem is that the consumer, and most of them are intelligent, has not followed the lemming like lead of the President to go further into the swamp of debt as his government has done.
Rational consumer behavior suggests that the consumer bears two types of debt -- Long Term mortgage debt aginst his sset which his his major source of savings; Short term installment debt (which with credit cards is infinite in length) used to purchase depreciating assets. As long as the value of his housing asset rose, he could in essence borrow against his increasing equity, purchasing on what the Brits used to call the Never-Never plan short lived assets. From time to time he could convert this credit card debt into home equity loans.
However, when the value of his housing asset decreased (and equity shrank), he changed his consumption patter, paid down his installment loans and created what had been thought to be an extinct bird -- actual savings.
This "unpatiotic" failure to immolate himself with hot new installment debt has had certain effects. First, the retail market crumbled, stores closed, commercial property owners found their properties in a downward value cycle, and banks raised the Cap Rates at which they valued commercial property -- driving down prices in the market up to thirty percent as the Cap rates climbed from 6% to 9% Second, the drop in sales lowered the demand for product, hitting manufacturers in the gut, both in America and abroad.
We will not see permanent relief until the supply of housing equals the number of qualified buyers. At that point there will be a more orderly increase in housing prices, consumer confidence will increase.
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uru86 wrote:
Nov 6th 2009 7:36 GMT
This crisis is transforming into a serious crisis, unless the government is wiling to take some dramatic steps. Unlike the 2001 crisis when the fiscal house was in order, which enabled the government to spend money; or the crisis of the early 80s when interest rates were close to 20 percent, giving the government room to ease the monetary base. This crisis has left the government no more real room for maneuver. The Fed cannot cut interest rates further, banks are not wiling to lend and as Orzak argues, the fiscal deficit is no longer sustainable; however, this assumes that conditions as they are, are unchangeable.
A big part of the solution is to raise taxes, which helps break the hegemony of neoliberalism/supply-side economics nonsense. Firstly, to help cover the huge budget deficit that is starting to seriously undermine confidence in the American dollar and economy; secondly, the private sector is NOT using the money effectively, it is too over-leveraged and hesitant to part with its capital. If we are dependent on what bankers and other capitalists think, we will not get out of this malaise because their mentalities are based on a self-reinforcing, pro-cyclical, 'herd' mentality.
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neopublius wrote:
Nov 6th 2009 7:37 GMT
you are right, it is time for the government to take serious action.
dissolve and leave us the hell alone.
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neopublius wrote:
Nov 6th 2009 7:40 GMT
uru86, are you a communist, or just an uneducated ignorant or philosphy major or what?
herd mentality....you got that from newsweek who got it from time, who stole it from some stalinists at harvard....can you say MOO.
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MattyJohnson wrote:
Nov 6th 2009 7:46 GMT
@Quite Like Frank:
Clearly, if you know it’s an “abysmally small amount,” then you know paying a mortgage and for goods like its utilities, food, and gasoline are far from leaving much room for a surplus of savings. I wasn’t speaking to disposable income or savings rates; I was speaking to unemployment insurance being directly put back into the economy.
As for these more downtrodden numbers, to what are you comparing those numbers? Our economy’s growth over the past decade was predicated on consumer spending financed by a housing bubble. Responsibly returning to numbers we saw preceding this massive deflation won’t happen soon, with or without laissez faire market policy. Moreover, without the government having injected capital into the market, supporting its commanding heights, we’d be in even more dire straits. One can espouse fresh water economics all they want, but allowing mortgage lenders the ability to also acquire risky derivatives and over-leverage their banks only led to our being in this spot in the first place.
Voting Libertarian is better than voting Republican, but deregulation is just as much to blame for this problem as anything. The Libertarian Party hasn’t seen me advocate its position since I was in High School.
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Maddox10 wrote:
Nov 6th 2009 7:53 GMT
I can only shake my head and say to myself "Oh, What a Liberal World."
For those of us in the home construction industry the future looks dim for years to come.
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oscar james wrote:
Nov 6th 2009 8:59 GMT
The housing market was distorted by government policy... giving loans to unqualified borrows. This drove up demand increasing prices on homes, which allowed existing homeowners to borrow more than a real market would allow without the government policy. How does a government undistort a market by giving incentives to individuals to buy the now deflated priced homes that could not afford these houses at the deflated prices? It is impossible to get it back to a normal housing market. Government interventon must stop and let real supply and demand work the houseing market out. There is going to be losers no matter what... once the government distorts a market it is distorted until the government gets out.
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temperedglass wrote:
Nov 6th 2009 9:20 GMT
It's great when people relate opinions they don't like to communism. It's this kind of stuff that makes debates in the US impossible.
What on earth does the construction industry have to do with liberals or conservatives? Construction is dead because we have too many empty houses and commercial facilities for which there is either no demand or buyer's capable of qualifying for loans. Greenspan left the money supply too loose, created a bubble, and I don't recall either party complaining about it while things were going well.
And if the national debt is such a big issue to people complaining about the stimulus, why aren't you complaining about the two wars we're losing that are costing us just as much?
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Marty Nemko wrote:
Nov 6th 2009 9:33 GMT
The reason that companies aren't hiring is no mystery. The costs of employing someone have mushroomed: government mandated 12 weeks a year of Family and Marriage Leave (which is easily subject to fraudulent use,) increased rights of lawsuits for "wrongful termination," sexual harassment, etc. For example, re the latter, an employer can be liable even if unaware, for example, that an employee hung a calendar with a scantily clad woman in it. Add to those costs all the payroll taxes: Medicare, MedicAid, Social Security, Worker's Compensation, etc., etc., etc.
So it's no surprise that companies try to automate (e.g., software), and hire temps and part-timers, and outsource as often as possible. They outsource to nations where the costs of employment--not just salary, but those other costs, are far lower.
Marty Nemko, Ph.D.
Employment consultant
www.martynemko.com
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Quite Like Frank wrote:
Nov 6th 2009 10:01 GMT
@MattyJohnson:
"I was speaking to unemployment insurance being directly put back into the economy."
Unemployment insurance comes out of taxpayers pockets, gets put back into taxpayers pockets (after depreciating) who save it rather than spend it. Where's the hike in commodity expenditures? There isn't one, is my point. Even when that money somehow does get 'put directly back into the economy' it's only going back in after having been taken out of taxpayers' pockets in the first place, so where's the net stimulus? There is none.
"As for these more downtrodden numbers, to what are you comparing those numbers?"
Look at Ed Gross' "New Normal" forecasting and others in the world of Economics.
"Our economy’s growth over the past decade was predicated on consumer spending financed by a housing bubble."
I love it. Like there were no other contributors to growth during the past ten years. Come, come.
"Moreover, without the government having injected capital into the market, supporting its commanding heights, we’d be in even more dire straits."
Your argument above states that unless the government (cape whipping back in the wind) flies in and dumps a bunch of borrowed cash into the marketplace, we will all suffer greatly. Well, frankly, this is a shortsighted viewpoint. Nor is government stimulus a factor that drives real, sustainable growth. Every politician, especially the president, will tell you differently, however.
"...allowing mortgage lenders the ability to also acquire risky derivatives and over-leverage their banks only led to our being in this spot...deregulation is just as much to blame for this problem as anything."
Need I remind you that it was President Clinton that put the nail in the coffin of the Glass-Steagal Act, allowing different forms of banks all to act as intermediaries and engage in these practices? This rash of bad management was, for its part, politically influenced as well. Fannie and Freddy were formerly government entities, and when unleashed into the private sphere were more responsive to political pressures than are many private firms. So fearful are politicians of losing votes in an economic downturn, they will purposely influence economic actors when they can to spur growth. This was one of the reasons for the overleveraging and sub-prime lending bubble. They (Fannie and Freddy) had the implicit backing of the government and ended up destroying the value of these assets by their terrible lending practices. The financial instrument is not to blame. The managers making the poor decisions are to blame. The politicians who, when the housing market slowed down, encouraged sub-prime lending to take place are to blame. People who don't know how to use complex financial instruments are to blame. Deregulation didn't have anywhere near to do with the crisis as did bad management and unsound business practices. The government can go ahead and re-regulate all it wants, but this would hinder the U.S.' ability to compete against foreign banks that don't have the same anxieties surrounding the (most) recent banking crisis...
temperedglass wrote:
Nov 6th 2009 10:01 GMT
Marty, you were born about a 150 years too late. That and I still haven't gotten my weekly credit for the company store, could you look into that for me?
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dhendry wrote:
Nov 6th 2009 10:04 GMT
What I've found to be really exciting about the success of Mr. Obama's stimulus is since it doesn't create a net increase in jobs, bright economists working in his administration get to try to spin how many jobs have been created in the months following Mr. Obama's inauguration as unemployment marches upward. It seems like a lot of fun since they have a job and the number is not measurable -- how cool is that? I think I've though of a great tag line though: It's the second derivative even if we're still hemorrhaging jobs, stupid. I’m eager to hear next how Mr. Obama blames his foundering policies on Mr. Bush. Great job, Mr. President.
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Nirvana-bound wrote:
Nov 6th 2009 10:24 GMT
Come on Folks, cut out the BS, the hype, the bravado & the denial. It ain't gonna change the reality.
What the world is witnessing is the imminent Fall of the American Empire. Like every other degenerate & dissipated empire that crashed before, down the annals of time, so also is Imperial America in the throes of gradual but ineveitable disintegration.
History is cyclical & like a fading Red Star, America is lurching inexorably into oblivion.
Nature calls..
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bushleague wrote:
Nov 6th 2009 10:25 GMT
Folks - we are still in a Depression. The "real" unemployment numbers are easily comparable to the 1930s.
Until the debt overhang is resolved, there can be no real recovery. Households and banks are saturated with bad debt. No amount of free, easy credit removes this debt overhang. Like a saturated sponge, the consumer cannot absorb any more debt & the banks won't loan to tens of millions of bankrupt households struggling to keep their jobs. There can be no real recovery until households and banks clean up their destroyed balance sheets.
Think about it. We are 2 years into this economic catastrophe. Have the banks even begun to clean up their balance sheets? Did any of the toxic assets go away? How many households in the US are technically bankrupt (underwater)? The "bell curve" of ARMs reset in 2010. The numbers are mind boggling ...
We are still in a multi-year self-reinforcing deflationary downward spiral driven by negative equity, increasing unemployment, record foreclosures, household bankruptcies, business bankruptcies, record unsold homes inventory, record vacant commercial property, stagnant wages, reduced work hours, and zero job creation.
This downward cycle will not be easily broken! It has not been broken yet ...
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Monique2009 wrote:
Nov 6th 2009 10:49 GMT
If you think the current economic situation is getting any better, think again. From South Florida, I can inform your readers that things are very tough right now. I am in a upper middle class neighborhood. Let me explain what I am seeing. My neighbor in the back of my house loss his job a few months ago, for the second time since the crisis. My neighbor to my right-his income has decreased so much, he will leave his house in two weeks and try to do a short sale with the bank. My best friend lost her good paying job and is barely getting by. My husband had to shut down his business and works out of the garage with almost NO INCOME. He recently started cutting grasses for neighbors and friends. Thanks God, I still have my job, while hanging from a string and taking a pay cut, I trying to make ends meet. I pray for my husband, my friends and strangers all united by this painful crisis. It's time for our government to focus, and QUICKLY, on a recovery plan that truly brings jobs to Americans. I hope this happens sooner rahter than later, before the situation of folks here described, gets any worse.
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Austrian Smith wrote:
Nov 6th 2009 11:45 GMT
The Economist should believe in and support the free market.
What is needed is dramatic quantatitive easing to alleviate the credit crunch. The banks were leveraged 1:50 in 2007 and are now being encouraged to go to 1:10 this is an 80% reduction in available credit. The velocity of money is falling and this means the monetary transmission mechanism is failing.
The low interest rates distort the market and allow further misallocation of resources. The government should ask the Fed to start a two year stepped increase in interest rates. This will encourage people to save and prevent annuity rates from collapsing.
The longer the government continues the deficit the more painful and prolonged will be the recovery.
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magic_marker wrote:
Nov 7th 2009 12:49 GMT
These are treacherous times and america must tread carefully; but business sentiment is changing around the globe: banks are beginning to lend out and entrepreneurs (mainly cash rich) are waiting to take advantage of opportunities to stimulate trade. The US will start taking a whiff soon enough.
There's a lot of hard work ahead folks but let's not forget: every day of rain brings us one day closer to sunshine :)
Peace
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Anne chufan wrote:
Nov 7th 2009 2:34 GMT
people focus on go abroad for study. but if the situation is like this should we go abroad?
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Ianmac37 wrote:
Nov 7th 2009 3:11 GMT
I doubt the employment situation will improve until consumption picks up and that is hampered by the changes in income distribution in the USA over the past 28 years. The top quintile of income earners is the only one that showed an improvement in income share either after or before taxes. This was due to the wrong-headed Republican tax policies that have impoverished the poor and middle class to an extent not seen since just before the Great Depression.
Only when we correct the disparities in income will we see a resumption in consumption and, therefore, a resumption in real employment. We elected Republicans for too long and now we have to pay the price. The rich, however, are doing very well.
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boontee wrote:
Nov 7th 2009 3:27 GMT
Yes, the US unemployment rate has finally crossed the 10% threshold as predicted some three months ago.
An increase far more dramatic than most economists had projected – Naturally economists are not always right.
The recession is apparently over -- But no, not yet, it only appears to be.
There are other signs that the problems may eventually ease – Of course most problems would resolve themselves with time. The question is when?
The US government is reluctant to spend more to help alleviating unemployment – No surprise, they do not have much left in The Treasury.
(btt1943)
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Sclavinian wrote:
Nov 7th 2009 4:05 GMT
The rate of losses is slowing - a good sign eh? When the Titanic hit the bottom, it's rate of sinking slowed to zero but I wouldn't buy White Star Line stock (or their insurers) until the Titanic started rising. We are not in a recovery.
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valwayne wrote:
Nov 7th 2009 4:30 GMT
More glimmers. UNEMPLOYMENT is at 10.2% a nearly 1/2 percent jump and we here about Glimmers. Sounds like White House spin. It will be intersting to see if Unemployment starts to drop, but its doubtful it will. The 3rd Qtr saw growth because of Government spending and cash for clunkers, but that's over and car sales are back in the pits. And who is going to hire anyone when Obama and the Democrats are ignoring the economy to focus on their corrupt multi-trillion dollar Obamacare plan. Trillions and trillions in corrupt spending, debt, and printed money! We may get a short term bump. If you borrow and print enough money you should get something for it. Then the inevitable crash. As the President of the European Union said: Obama has us on the road to hell!
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KACEY1 wrote:
Nov 7th 2009 4:34 GMT
To albertaxy:
You said and I quote:
“Well said, KACEY1. Hope the government someday can respond to people's online reviews.
I always read reports like "jobless recovery" and "gloom but with glimmers." Are the media and the government living in denial or something?”
-------------------------------------
If you look at the government, news media, business, and education systems in U.S., you will find out most of the people in high places are related somehow.
Lots of them are lawyers and they graduated from Ivy Leagues, One day they are in the U.S. Congress, may become cabinet member, or president of a Ivy League, or CEO of some business.
For example, Mr. Larry Summer was labor secretary, a cabinet member with President Clinton, and then become the chancellor of Harvard University, Currently; Mr. Summer is the economic czar under President Obama.
Treasury secretary Hank Paulson under President Bush, he was the CEO of Goldman Sach. Mr. Tim Gauthiner, the current secretary of treasury, was the chairman of New York Fed, before that, he worked for another big Wall Street firm.
Let’s look at President Bush, his SAT score was something like 1,000 and he went to Yale Law School, because he has family connection.
For example, I have 3 sons, they all received more than 1500 SAT scores, in the 95 to 99 percentile of SAT and SAT-II test, they were the president class of their high class and they could not get into Harvard undergraduate, (particularly, they are Asian). Lucky, they all went to University of California at Berkeley, and they all ended up in graduate schools of Harvard, MIT and Wharton school of business.
The playing field is not level in U.S. Look at who were the leaders in U.S., a large percentage of them are lawyers, accountants, salesperson, politicians, and bullshxt artists. You need to know people in high places, and then there is a music chair for you.
This country needs engineers, scientists, mathematicians as our leaders. This society needs honesty, fairness. Unfortunately, the reality is quite different.
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MakatiOne wrote:
Nov 7th 2009 4:35 GMT
Statistics are worthless in today's world, because, they ALL have spin to make the group of your choice look good. GDP, Unemployment, The Market Casino, Government support, etc. ALL are estimates and no-one has the exact numbers, NO-ONE. But...
If you look around your neighborhood, your family, your friends, and see what is happening to them, THAT has more reality than anything else, and is THE most important facts you need to know. All the rest is speculation, and there is not much you can do about the bigger picture.
Yes, read a wide source of newspapers, especially foreign news who are more likely to be telling it like it REALLY is. You won't get a clear pic from US sources as all are owned by the wealthy who want to keep the sheeple ignorant. It makes it easier to shear and butcher them.http://www.onlinenewspapers.com/
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uru86 wrote:
Nov 7th 2009 7:34 GMT
@ neopublis
"uru86, are you a communist, or just an uneducated ignorant or philosphy major or what?"
I am, proudly, a democratic socialist, who identifies with the post-Marxist stream of political philosophy. In terms of political economy, I accept Marx's, Keynes' and Sraffa's critics of neoclassical economics; in addition, I am pursuing my Ph.D at one of the top 20 schools in the world, and you?
"herd mentality....you got that from newsweek who got it from time, who stole it from some stalinists at harvard....can you say MOO."
Moo....
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tryworkingforaliving wrote:
Nov 7th 2009 12:56 GMT
uru86:
I too am a Marxist Communist and I'm growing wary of these little people and their herd mentality. This is not good for us rich liberal elitist. What happened to the progressive master plan?....sending all these common folks to public school so that they would be too stupid to know what we are doing to them? Apparently sending their children to public school starting at age 5 is not young enough....The children will not relinquish their individuality to the collective unless we start earlier.....perhaps we should start a "public option" government run day care program so we could get our hands on these kids starting at 6 months of age. Today's problems require "centralized" solutions. ONLY buy transferring power from the individual to the government, can these problems can be resolved.
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tk1917 wrote:
Nov 7th 2009 1:33 GMT
TheOldMan wrote: "We should have simply skipped the extra borrowing and let the country work its way through the problem."
Yeah, thats what Hoover tried in the 30s and it didn't exactly work out very well now, did it? I think the correct decision was made and if it hadn't then we would be probably looking at an even higher unemployment level.
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happygolucky wrote:
Nov 7th 2009 5:02 GMT
I have been laid off in January 2009 after working for almost 2 years as a board certified family nurse practitioner(and they tell you there is a shortage of primary care providers...). I thought my job was recession proof. It took me almost 3 months to find another employment.
In the meantime, I tried to collect unemployment payments. I registered with Bureau of Unemployment and was determined to get $298 per week. However getting that or anything was not easy at all... In fact, it was so cumbursome--(had to go on a website on odd Sunday between certain time, with passwords that kept changing and website log me out...ect) that I have not seen a single cent. After numerous attempts to talk with somebody in person or over the phone and not succeding, I gave up on whole unemployment benefits.
My lesson from this is that don't expect any handouts, plan for tough economic times, be self-reliant, downsize, minimize, move to another country...Because this is only begining...The extra large way in which people of the United States got used to living is going away and not coming back.
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uru86 wrote:
Nov 7th 2009 5:29 GMT
@tryworkingforaliving:
Your total lack of education is showing in your comments, re-read what I wrote and you understand why.
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Dr. Etuka obinwa wrote:
Nov 7th 2009 8:07 GMT
There are several problems confronting America and its people presently. These problems were further compounded by President Obama's Stimulus package which from the on-set lost its bearing and track. It went to people who did not deserve to have it afterall.
When those strategical placed had it, it went into their respective pockets as remunerations. The stimulus package which was supposed to create more jobs around America and cushion the effects of job losses, has in effect aggravated the already bad situation. This is the reason why there are reported cases of grave unemployment rate in most States. The Politicians are in Washington, DC, playing 'Ludo' a game with dice with the lives of the American people, as they await their voting in or out of the office soon. Are the few days ago election results not eye-opener enough for those concerned.
JuanDSolano wrote:
Nov 8th 2009 12:01 GMT
"The number of people who were employed by temporary agencies rose by 33,700, or 2%, the third monthly gain. This is usually considered a precursor to more permanent recruitment"
In what planet?
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Alan McCrindle wrote:
Nov 8th 2009 12:10 GMT
I think the Economist is being a little optimistic here - and I can see at least 4 reasons why unemployment, as measured by the current 10.2% definition, is unlikely to start falling any time soon.
1. The Alternative measurement for unemployment - the one that takes into account people who are under employed - will fall before the 10.2% figure. It is obvious that employers who have staff who are working reduced hours will return these people to full employment before hiring new people.
2. A large proportion of the jobs that were lost are unlikely to come back - they are the types of jobs that were based on the debt/finance/housing/retail bubble or jobs in manufacturing, like Auto, where there is global overcapacity, a drop in local demand and increasing competition from low wage countries like China.
3. Increasing globalisation and competition will continue to drive manufacturing to low cost countries. In China only 74% of last years University graduates are employed and their average wage is $240 per month according to a recent article in the WSJ. And we are talking graduates like Engineers and Biotech - all high end knowledge worker jobs. This is bound to put downward pressure on USA wages and job opportunities - companies like GE are already starting to shift some R&D to China and India.
4. Historical data for the US shows that unemployment will continue to rise if GDP growth is less that 2.5 to 3% due to population growth and technology driven productivity growth. The paradox here is that the faster productivity grows the faster the economy has to grow to maintain stable employment. The latest GDP growth data from the USA is completely unsustainable and based on short term stimulus measures like cash for clunkers and first home owner grants.
Each new dollar of GDP growth now requires $6 in new debt - where is this new debt to come from? In the last 10 years it came from increased consumer debt and bank leverage. But the consumer is maxed out on debt, unemployment is high and house prices are still falling.
On this basis I expect unemployment to continue to rise for some time and to remain at high levels well into the future
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cs96 wrote:
Nov 8th 2009 6:43 GMT
I find the democrats, republicans, liberals, conservatives, neocommunists and neoconservatives repulsive if not traitors. Even the ECONOMIST simply doesnt get it as they say we cannot create jobs and attack the deficit at the same time.
1) change the tax laws to tax consumption rather than savings/investment
2) create tax liabilities for outsourcing and offshoring instead of tax credits
3) follow other nations and implement a mirror VAT tax which taxes imports to the US and subsidizes exports out of the US.
4) continue devaluing the dollar to punish those who undervalue and manipulate their currencies for their export oriented economies.
ALL 1-4 WOULD NOT ADD TO THE DEFICIT BUT WOULD ACT TO REDUCE THE DEFICIT.
ALL 1-4 WOULD ADD JOBS THAT BELONGED IN THE US.
THE IDEA THAT JOBS CAN ONLY BE CREATED BY FISCAL STIMULUS IS STUPID.
AM I THE ONLY ONE THAT IS APOPLECTIC LOOKING AT THE MINISCULE UNEMPLOYMENT RATES IN FOREIGN NATIONS WHOSE ECONOMIES ARE BUILT ON EXPORT TO THE UNITED STATES! IF THEY HAVE A 5% UNEMPLOYMENT RATE AND WE HAVE A 10% UNEMPLOYMENT RATE THEN OBVIOUSLY THERE IS AN IMBALANCE WHEREBY WE ARE IMPORTING TO MUCH AND THOSE GOODS AND SERVICES NEED TO BE BROUGHT BACK TO THE US.
BUT THE QUESTION IS...WHERE IS THE MEDIA, WHERE ARE OUR ELECTED OFFICIALS, WHERE IS THE PUBLIC, WHERE ARE THE US WORKERS AND EMPLOYERS!
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Old Benjamin wrote:
Nov 8th 2009 12:26 GMT
Really? Of all the places in the media, The Economist is the last place I would have thought to see "but the job market should start to improve." You would have to be stupid to think this recession is anywhere to being over. The DOW may be up, but, employment is falling. How does this make any sense? The market is not an indicator for our future.
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homefry wrote:
Nov 8th 2009 2:20 GMT
America's jobless rate passes 10% but the job market should start to improve soon
Should it really? Is the recession really over, or did we just buy a quarter of 3.5% imagined growth? 24 grand per car in cash for clunkers is a big part of that 3.5% I hope it holds, but I doubt it. 160 grand per job produced or SAVED? And now we find out that a very large portion of those are made up? Jobs that were not threatened anyway? And that some of the number was NOT jobs saved, but jobs that recieved a raise in pay and yet counted as saved.
One last thing. Before all this "CHANGE" was given us by demos, remember it started back in '06 when demos were running for control of congress? They said, just give us the congress and we'll give you "CHANGE." At that time unemployment and the GDP growth numbers were mid 4%. And lets not forget, obama was part of that congress taking over both houses. Well, things have certainly "CHANGED" havent they? Is this the "CHANGE" America wanted?