Posted by Steve Markowitz on June 4, 2016
The April jobs report has been released by the US Department of Labor and it is not pretty. According to CCNMoney, a mere 38,000 jobs were created in the US, the lowest monthly rate in six years. To put this into perspective, in the past two years the monthly increased averaged about 200,000 new jobs and the number required just to keep up with new entrants into the job market is in excess of 200,000 monthly.
Commenting on the job’s number, Curt Long, chief economist at the National Association of Federal Credit Unions, correctly said, “It’s a pretty gloomy report, hard to find a silver lining in this one“. Contrast this realistic assessment with the Department of Labor’s unemployment number released indicating that the unemployment rate dropped to 4.7%, the lowest level in 9 years. How does the Labor Department come up with such rubbish? They merely stop counting those Americans who have given up the job search for lack of success. Now that’s banjo accounting!
There are many reasons behind the US economy’s poor performance with government being a major factor. Included in this list is the government’s willingness to create false reports to further its own political and bureaucratic agendas that often in conflict with those of the American people.
Posted in Unemployment | Tagged: Employment, Government, Jobs, unemployed | Leave a Comment »
Posted by Steve Markowitz on November 17, 2015
The US Bureau of Labor Statistics last week released the monthly unemployment figures that indicated over 270,000 new jobs being created with the unemployment rate dropping to 5%. The Obama Administration touted these figures as positive indicators of economic strength. A look under the covers shows show something different.
While the official unemployment rate has dropped significantly since President Obama’s first election, these numbers are at best suspect. First, they do not take into account the quality of the jobs created; i.e. pay scales. In addition, the figures ignore the many Americans who are underemployed and no longer count because they are no longer searching for a job.
Tony Sagami recently published an article titled The Poisonous Cocktail of Main Street Woes and Federal Reserve Liftoff that shares some sobering statistics putting the true economic situation in perspective. This includes:
· 401(k) plans are a tax efficient means for workers to put money away for retirement. Withdrawing funds from these accounts prior to the age of 59.5 leads to a 10% penalty and additional income tax. Irrespective of this 30 million workers have prematurely taken money out of the plans with 20% of account holders borrowing against their 401(k)s.
· A record 36% of women between the ages of 18 and 34 continue to live with their parents. In addition homeownership is at its lowest level in three decades even though mortgage rates are at historic lows.
· During October, foreclosures on homes jumped by 12% with final stage foreclosures increasing 31%.
At best the numbers Sagami presents demonstrate the weakness of the recovery since 2008. They likely indicate systemic problems within the economy caused my inept governmental and central-bank policies, as well as the inefficiencies brought to the economy via access governmental regulations.
The low interest rate policies pursued by the Federal Reserve since the 2008 meltdown have failed to create a robust economy. These policies have not only weakened long-term economic growth, but also increased the disparity between wealthy and average Americans. However, the Fed is now in a conundrum. While it should be increasing interest rates, and there are predictions it will do so in December, the economic withdrawal caused by that action could lead to further economic weakening.
Posted in economy, Unemployment | Tagged: Employment, Fed, Federal Reserve, Interest, Rates, Unemployment | 1 Comment »
Posted by Steve Markowitz on October 5, 2015
The US employment report posted last week by the Labor Department paints blurred picture. While unemployment remained at 5.1%, this is but a slight of hand created by fuzzy numbers. Here are some of the stats reported by the Wall Street Journal:
- During September only 136,000 new jobs were created, far short of what economists predicted.
- The Labor Department decreased the 173,200 and 245,000 jobs supposedly created to August and July down to 136,000 and 123,000 respectively.
- During the summer of 2014, approximately 250,000 jobs per month were created.
- Wage growth was stagnant during August, down by a penny from July.
The government reported that the unemployment rate remained steady at 5.1% for September. This was accomplished by fuzzy accounting. The government, in its infinite wisdom, does not count Americans that have given up on finding full-time employment as being unemployed. The fallacy of this accounting practice is demonstrated by the workforce participation rate being at its lowest levels 40 years, falling by another 0. 2% in September to just 62.4%.
The economy requires approximately 200,000 new jobs monthly to keep up with overall workforce growth. Given we are now seven years into President Obama’s economic policies, the weak employment numbers show failure. The programs include the huge Stimulus spending initiated during his first year in office and continued with other interventions including Cash for Clunkers, mortgage relief, green energy programs, etc. Instead of recognizing the failure of these interventions, Progressives including the President suggest policies that will further depress wages. This includes promoting additional immigration that will add pressure on wages, and increasing the cost of labor through Obamacare and a higher minimum wage.
The Federal Reserve’s policies have also proven ineffective. While the Fed has used historically low interest rates as a cure-all for the economic maladies, these policies were counterproductive. However, the Fed is now in a conundrum. Given the weak jobs data it is fearful that if it raises interest rates that economic growth will be further hampered. But, interest rates will inevitably go up and that will not be a good day for the economy.
Since the economic meltdown of 2008, politicians from both parties promised economic fixes without pain. This alchemy is not possible. There were severe economic imbalances that needed the right themselves after the meltdown. Governmental interventions stop these necessary events. Sooner or later they will rebalance. Like a boiling pot, the longer the lid is kept on the more violent the pressure release will be.
Posted in Unemployment | Tagged: Department, Figures, labor, Unemployment | Leave a Comment »
Posted by Steve Markowitz on May 12, 2015
Last week the US Department of Labor released April’s unemployment figures that indicated the US economy added 223,000 jobs, decreasing the unemployment rate a notch to 5.4%. This would be good news if the Labor Department’s figures realistically represented the US employment situation. Unfortunately, it does not.
The Labor Department’s unemployment figures only include Americans who indicate they are searching for employment. Those that have dropped out of the workforce, for example due to an inability to find work, are not counted as unemployed. This ludicrous accounting practice shows a low unemployment rate while at the same time the more meaningful labor market participation rate remains at multi-decade lows, according to the New York Times.
It is telling that while the Labor Department releases optimistic, yet unrealistic employment figures, the Federal Reserve leaves the benchmark interest rates at historic lows. The Fed’s action indicates the irrelevance of the Labor Department’s figures.
Posted in Unemployment | Tagged: Fed, Labor Department, participation, Unemployment, workforce | Leave a Comment »
Posted by Steve Markowitz on October 15, 2014
It seems everyone, including his previous buddies in the mainstream media, is piling on President Obama. This week MSNBC’s Andrea Mitchell went on the attack during a recent interview with Obama associate and former advisor David Axelrod. When discussing the jobs picture in the United States, Mitchell said:
“If you look at the Wall Street Journal, the Washington Post, the New York Times, the Financial Times, all the reporting on the job data from Friday, reported that participation rate is at historic lows, decades lows, 59% are involved in the labor force. That’s just not a sustainable recovery. We have two Americas, we really do.”
Mitchell is correct that the percentage of the population of working age Americans that are employed is at a 40 year low. This is in stark contrast with the President recently touting the improved unemployment figure that is now 5.9%. This contrast not only brings into question the President’s understanding of the current economic situation in the United States, but also the government’s fudging of the unemployment figures to suit its own narrative. It is no wonder that the American people have lost faith in their government.
Posted in Unemployment | Tagged: Andrea Mitchell, Axelrod, Jobs, MSNBC, Obama | Leave a Comment »
Posted by Steve Markowitz on February 14, 2014
For two years the government has published the unemployment figures showing the rate continuously dropping. The latest figures for January have the US unemployment rate dropping to 6.6%. While a decreasing unemployment rate should be a positive sign for the economy, digging deeper into the numbers tell a different tale.
Most of the drop in the unemployment rate has come as a result of a rather unusual accounting methodology used to calculate the rate. After an extended period time the government no longer considers individuals unemployed, but instead puts them into a category of no longer searching for a job. How ludicrous.
CNN Money has published the chart posted below that offers a more realistic presentation of the unemployment situation in the United States. As indicated, the total working population over the age of 16 is 247 million Americans. Only 118 million Americans actually have full-time jobs with 28 million having part-time employment. The government’s unemployment number is 10 million Americans resulting in 6.6% number. Left out of this equation is the 91 million working age Americans that the government considers not looking for a job. This is voodoo accounting.
The percentage of working age Americans actually working is at the lowest point in decades. While some of these people actually are not seeking employment, others have given up the search due to the unavailability of jobs, availability of government benefits or some other less obvious dynamic. It is hard to consider the numbers included in the graph below as anything but disturbing.
Posted in Unemployment | Tagged: Figures, Government, Job, Rate, unemployed, Unemployment | Leave a Comment »
Posted by Steve Markowitz on December 9, 2013
The United States Labor Department announced some rosy unemployment numbers indicating that the economy added 200,000 jobs in November with the official unemployment rate dropping to a five-year low of 7%. The New York Times hailed the figures in an article by Nelson Schwartz titled “Lowest Jobless Rate in 5 Years Raises Odds of a Fed Move”. Nelson touts these positive figures stating early in his article:
- “After years of frustrating fits and starts in the wake of the financial crisis and the Great Recession, the United States economy finally appears to be generating jobs at a healthier, more sustainable pace that many analysts now think will continue into 2014. The official unemployment rate fell in November to its lowest level since 2008.”
- The 7 percent unemployment rate last month — down from its most recent peak of 10 percent in October 2009 — is the best reading since President Obama took office, providing one bright spot for a White House beleaguered on many other fronts. The unemployment rate was 7.3 percent in December 2008, the month before Mr. Obama was inaugurated.
It is not until halfway through the article that Schwartz raised some concerns about the current economic picture when he says: “For people with less than a high school diploma, for example, the jobless rate last month stood at 10.8 percent. For African-Americans, it was 12.5 percent, or nearly twice what it was for whites.” In addition, Nelson adds: “No improvement was seen in the fate of the long-term unemployed, either, with the ranks of people who have been seeking jobs for more than 27 weeks actually rising slightly in November to 4.06 million.”
Kyle Becker of kylenbecker.com this week posted a graph, included below, that pictorially explains what Schwartz and New York Times just don’t get. The economy’s recovery is spotty at best offer little benefit to the lower income brackets and middle class.
Posted in Unemployment | Tagged: Food Stamps, Rate, Unemployment, US, workforce | Leave a Comment »
Posted by Steve Markowitz on August 2, 2013
Unemployment Figures Mask Reality
This morning’s unemployment headlines looked good on their face. The New York Times breaking news alert stated “U.S. Added 162,000 Jobs in July; Unemployment Falls to 7.4%”. However, digging into the article indicates a different narrative.
The US Labor Department indicated that job growth was in “retail, food services, financial activities and wholesale trade”. Retail and food services jobs are typically lower paid positions. Further, the better paying manufacturing sector gained only 6,000 jobs. In addition the Times reported that the average hourly wage and workweek declined during July.
However, the most significant problem with the unemployment figure is that it does not match reality. For example, the government in its infinite wisdom stops counting the long-term unemployed as unemployed. You can’t make this stuff up.
A more appropriate piece of employment data to look at is the number of employed Americans. As the chart below indicate, that number continues to decrease even though the recession was supposedly over three years ago. In addition, as indicated in the charts below, the number of those unemployed for more than 27 weeks, as well as the number of part-time workers, is that historically high rates. As they say, figures lie and liars figure.
Posted in economy, Unemployment | Tagged: Employment, Figures, unemployed | Leave a Comment »
Posted by Steve Markowitz on March 18, 2013
Earlier this month the US government through the Bureau of Labor Statistics released updated employment figures that at first blush seemed positive. The unemployment rate dropped to 7.7% and the BLS announced that its most recent survey shows the creation of 236,000 jobs.
Grant Williams of Mauldin Economics dug into the employment numbers and found a less rosy view than that promoted by the Obama Administration. Williams determined that part-time jobs rose by 446,000 during this period indicating an actual net drop in full-time jobs of over 200,000. Further, if those that dropped out of labor force were counted, the unemployment rate would actually exceed 11%. Finally, the labor force participation rate in February was less than 64%, a low not seen since 1981. Only the government can put a positive spin on such ugly statistics.
Posted in Unemployment | Tagged: BLS, Employment, Full-time, Government, Part-time, Rate, Unemployment | Leave a Comment »
Posted by Steve Markowitz on October 5, 2012
The US Department of Labor today released September’s employment numbers. While at first blush with the unemployment rate dropping from 8.1% to 7.8% this seemed to be a positive report, it does not take much digging to be perplexed by the supposed improvement.
- According to the Labor Department, the private sector added 114,000 new jobs in September that reduced the unemployment rate by 0.3%. Yet for August, a higher figure of 142,000 jobs were added, but the unemployment rate then only decreased by 0.1%. This discrepancy is explained by the fact that the government stops counting people as unemployed who no longer look are actively for a job. In other words, the government has determined that the total labor force has decreased. That is some sleight-of-hand!
- For September, the government reported that the total number of people employed increased by 873,000, while the total unemployed dropped by 456,000. It takes some type of special mathematics to come up with these numbers given that the private sector only added 114,000 new jobs.
The discrepancy in the employment figures is either the result of purposeful manipulation for political purposes or governmental incompetence. Given that it is one of the last reports prior to the presidential election, it certainly smells unclean. Below is former General Electric CEO Jack Welch’s conclusion on this matter. As they say, if it quacks like a duck it is not a zebra.
Posted in Unemployment | Tagged: jack welch, Labor Department, Rate, September, Unemployment | 3 Comments »