The release of the jobs report, a monthly ritual for economy watchers, offered a mixed picture this morning. The good news was that the U.S. economy created 166,000 new positions in July, according to the Bureau of Labor Statistics (BLS). That's an improvement from the dismal figures reported in April, May and June. The bad news was that unemployment actually edged up a bit in July to 8.3 percent of the labour force, from 8.2 percent in June.
The arcane details of this key indicator -- which is actually based on separate surveys of businesses and households -- help keep financial analysts employed and enliven discussion on cable business channels. But one key to reading the jobs report is to step back and take a bit of perspective.
Looking at the year so far, the economy has managed to create an average of 151,000 jobs per month. That's about the break-even level we need to keep up with the natural increase in the U.S. population. Also, the unemployment rate is back to the same 8.3 percent level where it stood in January. That means that the jobs market is neither improving nor deteriorating; it's stagnant.
The same picture emerges from another report, the ADP employment report, which typically comes out two days before the government statistics. The latest release counted 163,000 new jobs in July, exactly the same as the BLS. ADP's monthly figures are a bit less volatile than the BLS's, but they too show similarly weak job creation: an average of 170,000 new posts per month this year.
Job creation will probably remain unimpressive in the next handful of years, during which the Economist Intelligence Unit expects the U.S. economy to grow by an annual average of only 2.2 percent. The key problem is that consumers and the government ran up too much debt in the last decade and will need a sustained period of belt-tightening to reduce it. Their saving, though necessary, means they won't be spending. Companies in general are cash rich, but are reluctant to invest when demand is so weak for their goods and services.
This slump has been toughest on certain groups: the young, less educated, Blacks and Hispanics. Happily, the latest jobs numbers show that unemployment rates for these groups have come down substantially in the past year.
The latest data also offer some lessons for those just coming into the labor force, or finding themselves out of work in the middle of a career. Government at all levels continues to shed jobs and the construction sector is making only a tepid recovery from the devastation of the 2008-2009 recession. These aren't the hot places to look for work.
By contrast, the healthcare sector is booming, and will likely continue to do so if Obamacare moves forward following the November elections. The plan will bring tens of millions of Americans into the health insurance system. They'll want more care delivered by more nurses, doctors, X-ray technicians and so on. Office work in general is expanding as well (the BLS calls this "professional and business services").
It's also a good idea to stay in school, or go back for additional training. Workers without a high-school diploma are unemployed at a rate three times higher than those with a bachelor's degree (12.7 percent versus 4.1 percent). Those numbers should offer some solace for this summer's crop of new college graduates.
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This is true. However, the implied belief that we will pay down our debt and then return to prosperity is not necessarily true or even likely. At least, what is the event that will change our 2% growth to 5% growth? There is none on the horizon. We're not even paying our debt down. If anything, the news reported that credit card usage is up, and that Americans are apparently buying everyday necessities like food with their credit cards.
But if ten years went by and we paid our debt down, what would we have then? A country filled with college graduates with no careers who have been knocking around on minimum wage jobs for the last decade. They're going to produce growth? It wouldn't seem so.
Obama can see November from his back porch.
Yet our government wants to keep on spending like it has all the money in the world.
STEMM - Science, Technology, Engineering, Math, Medical.
To qualify in these fields requires 90% hard work, 5% talent and 5% presevearance.
America's problems are:
50% high school drop out rate; and another 25% drop out of college.
Only 5% graduate with a STEMM degree.
When it comes to unemployment or low wages, remember "one cannot spin a math problem."
And while STEM careers are highly paid, it's a small, narrow field of work. There is no mass employment in STEM, and further, those percentages are wrong. Math is not a natural ability of Man (unlike, for example, language). Most pre-technological people have languages as complex as ours, but they can count only 1, 2, and "many." They don't have the concept of 3, 4, 5, etc.
Consequently, only a few can make it in STEM. Lots of people try and just can't get over the calculus hump, and virtually every STEM course of study requires that you pass two semesters of calculus.
Another point for the present and the past was the worsting economy for labor. Wages were held low for labor during the beginning of the 20th century. Actually the economy didn't improve until the out break of WWII when labor was in demand for war materials and even at that point there were strikes for better wages and working conditions. There are several points directly involved in causing the Great Depression. Two key points. one was the credit market, too many people buying on credit, when the credit maxed out people quit buying. Point two, an out of control Wall Street, too many people buying on speculation. Falsely buying stocks and bonds on inflated prices, a floating market on paper, not sustainable, once the price raises to an unrealistic value people dump their holding and the main market collapses. Sound familiar? Today's economy could be called the Great Depression, semantics.
Except that is was government intervention that cause the consumer and the government to run up too much debt in the first place - thanks to the low interest rates and excessive credit expansion made possible by the Fed.
In a properly functioning market economy, as a boom develops interest rates will rise, putting on the brakes. Artificially low rates through Fed policy allow the boom to keep growing into an inflationary credit bubble that eventually bursts.
The rich don't create inflation - government does. The rich merely benefit from it.
While the seasonally adjusted unemployment rate went up from 8.2% to 8.3%, the non-seasonally adjusted rate went from 8.4% to 8.6%.
No matter how you cut it, BO is a complete and total failure when it comes to jobs and the economy. 42 months now with a unemployment rate over 8% is just pathetic (it's the most of any president since FDR).
bye bye obama!
Eventually people are going to come to the conclusion that electing Obama just means another four years of a bad situation slowly - month by month - getting worse. If they come to that decision before the election we'll see if Romney is any good or not. If not, four more years of same-o same-o.
I wouldn't be surprised if the next election became an all-or-nothing affair, and I don't think the Republicans have the upper hand. Say what you will about the President, at least he and his party haven't alienated three quarters of the electorate with their policies. The economy may suck and it may suck big time, but put that up against a presidential candidate who won't release his tax returns, and a party that has alienated women, latinos, gays, blacks, the poor, and a fair bit of the middle class, and which way do you think the election will go?
AGW has been proven in a number of states during the past two years, including Texas, Oklahoma, and Arizona in such a fashion that it can no longer be denied.
Being able to fry bacon in a frying pan in Oklahoma is dramatic proof re-enforced by the drout.
Right now, the best hope for relief comes from a hurricaine in the Carribbean. If it follows the usual course, it will hit on the Texas coast and then swing up into the central part of the country.
It will probably be too much for anything but reservoirs to handle, but could lead to milder weather and increase other rain activity.
I'm hoping that it will hit early enough to allow for crops from the midlands, including a corn crop.
Rather than 8.3% -- the rounded-up figure -- Obama economic adviser Alan Krueger writes on the White House website that the real jobless rate is 8.254%.
"The household survey showed that the unemployment rate ticked up to 8.3% in July (or, more precisely, the rate rose from 8.217% in June to 8.254% in July)," wrote Krueger, chairman of the Council of Economic Advisers.
I guess you can carry out the long division to eight or nine digits (on a number that you will revise UPWARDS next month anyway) but the long and the short of it is that no matter how much lipstick you put on this pig, it's STILL a pig.
Let's face it, the only reason that Obama has even a CHANCE of getting re-elected is because the repubs (again) picked the nominee the NYT editorial board asked them to pick. But even so, a salmon can only swim uphill against just so much current.
Even if the unemployment rate weren't going up - that is, if it weren't going up in the THIRD decimal place, to be as precise as Mr. Krueger wishes us to be, IT JUST DOESN'T MATTER, because every day the unemployment rate hangs this high the REAL unemployment rate - inculding those who have given up and just stopped looking - is also going up. The situation is becoming more and more intractable.