15 million Americans are unemployed and looking for work. Discouraged workers that are not seeking employment are not counted in that total. The U.S. economy added 162,000 jobs in March, the biggest monthly net gain in three years, even though the published unemployment rate remains at 9.7 per cent.
The chart above shows job changes in this recession compared to recent ones, with the blue line representing the current downturn. The line has ticked upward, but still has a long way to go before the job market fully recovers to its pre-recession level.
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Unemployment is at a “26-year high” with 17.5 percent of formerly employed Americans that are no longer looking for work or underemployed. The unemployment rate for workers aged 16 to 24 is at 19 percent. The unemployment rate for young African-Americans at 30 percent. The average length of unemployment is at a record high as the ratio of job seekers to open positions is currently 6 to 1. This is dismal news for Americans. As their “patriotic duty” many firms are now telling their employees that hours must be cut in order to save jobs. No less than 60 million American households are living at or below the poverty level. The nation is not seeing real ideas or action that even remotely resemble the urgency and aggressive action when banks and investment firms needed saving.
Behind the scenes, political powerhouses and their talking heads hope that cheerleading will do the trick. Surely the talent of the American people will save us says the court jester of economics, Warren Buffett. I cite the CNBC party show that is sure to insult your intelligence. The economy and the American people don’t need upbeat civic cheerleading about greatness. The nation needs serious action outside of more wars overseas. We need to realize that we have war going on right here.
The nation can expect weak recovery of consumption and economic growth coupled with larger budget deficits. The nation can expect greater delinquencies in real estate and the continued fall in real estate prices. The nation can expect greater losses for banks and financial institutions across the board in all sectors and a corresponding rate of bank failures.
Noriel Roubini’s Global Economonitor says: “we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.”
Mr. Roubini says “that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.” This will put the real unemployment rate soundly past 18%. Last year, I predicted a real unemployment rate of 25%. Either way, the nation has some suffering to go through since the political powers that be firmly refuse to bail out the American people. The land of politics continues to bail out the world with free handouts and political programs. We can bankroll and void toxic debt for freewheeling investment bankers and financial geniuses that abused the system, but we can’t risk lowering the debt or responsibility of the American people without making them homeless. Clearly, the American people are simply too talented. Politics still needs slaves to grist the mill. We need martyrs for the cause. The nation has them while China gains mastery over the national economy. What will politics sell next?
You can now appreciate why the world of U.S. politics doesn’t want to end the wars in the Middle East. With all the men and women in the armed forces coming home, we really would be a nation without work.
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economic fire sale
Even though this website hasn’t been dwelling on bank closures lately, the number of bank closures is definitely on the increase. In anticipation of the holiday weekend, seven U.S. banks have been closed, bringing the total of banks closed this year to 52.
What has made the closures this week unique is that many of the banks have been financially interlinked, which has exposed them to closure because of CDOs and loan losses. Local banks, not too large to fail, have been hit especially hard during the economic crisis, as a drop in home values has devalued mortgage-backed assets. The rising unemployment numbers have also impacted the banks, as more consumers are defaulting on their loans.
What really highlights the current economic crisis to me was a visit to a large retailer yesterday. I spent an hour in the store and as I shopped, I heard all manner of phone conversations and scuttlebutt between employees about the economy, economic failure, job losses and financial family crises. This snapshot in time on a Thursday afternoon would seem to indicate that the nation is enduring some uncommon suffering as you read this commentary. While I was shopping, I wasn’t looking for what I discovered. The conversations, many of them quite loud, were impossible to ignore. ~ E. Manning
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America continues labor freefall
It appears that the labor market in America is at an stupendous low, with 59.7% of Americans projected to be employed using traditional government statistics. As we have discussed on this website, the plight is actually much worse.
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“…the Federal Reserve aims for maximum employment and price stability. To achieve those goals, we must formulate policy based on our best assessment of where the economy is heading. Clearly, the timeliness and reliability of your labor market and price reports are critical to us. Besides those monthly indicators, our analysis and forecasting of inflation and real activity require a number of BLS (Bureau of Labor Statistics) inputs. We need to understand productivity because it is a key element in determining how fast the economy can expand without generating inflation. And we need to factor in trends in wages and benefits, in consumer spending, and in how U.S. wage, price, and productivity trends compare with those abroad. Indeed, the analysis, research, and forecasting that forms the foundation for our policymaking must be grounded in solid economic information, such as the BLS provides.” ~ Chairman Ben S. Bernanke at the Bureau of Labor Statistics 125th Anniversary Celebration in Washington, D.C.
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Voices of reason have long proclaimed that the only key to a decent future is a college education as we trumpet excess, luxury and credit for all. The halls of academia do not suit every temperament, nor can the world operate only through the league of white collar employment and office jobs. Who will take care of the national infrastructure, manufacturing and all those green jobs that the nation has been promised? A sedentary, artery-clogging, boss-centered lifestyle is not a requirement to exist in America. Yet, hundreds of thousands of American youth have been or continue to buy into massive college loans if credit is available. Nearly half of students who start college will drop out before graduating. Our country has been facing major workforce shortages for years, which have been taken up by illegals in many cases. They are the latest attempt by big business and government to create a new subclass of American worker in which to found a new nation.
Without question, the nation has been suffering where jobs are concerned, brought about by nothing less than white collar crime. You can’t really talk about careers since corporates nip millions of so-called careers in the bud every year due to their own self-interest. That reality existed before the recession stripped the nation of what millions of Americans see as their only self-respect: the job.
America has been convinced working a corporate job is the only way to live. The white collar job has been sold as the American stock and trade. The federal government has been very happy with this campaign as corporations and big business are highly complicit with federal law and the collection of taxes. As a result of this nearsighted approach, the American labor force has been selling itself short and has allowed itself to be deluded about the future and personal potential for the future.
We are being told that only by following rules and leadership of big business, the corporate and the academic world, can Americans possibly prosper. Has this proclaimed fact proved to be true? Are you truly being prospered now? Has the nation prospered? Think for yourself. You are your own best friend and are fully capable of supporting yourself if you are willing to think outside the box that the government, big business and corporates have made for you. There is hope. Great personal success can exist outside the cubicle. You are not a slave…at least not per the founding documents of America. ~ E. Manning
Send a card to your favorite unemployed American.
If important economists say it, it must be true.
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