Archive for the ‘Jobs’ Category

Captain Rick: U.S. Job Growth has crawled upward to pass the break-even rate with with population growth. The trend is in the right direction. The jobs being added are mostly low wage. There is little hope of regaining the 8.7 million medium to high wage jobs lost during the Great Recession any time soon.

The chart below shows the new jobs added during each month of the the past year. 

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GREEN LINE: an average of 214,000 new jobs have been created each month during the past year

BLUE LINE: an average of 185,000 new jobs need to be created each month to keep up with U.S. Population growth of 0.7%

REAL JOB GROWTH: is represented by the difference between the Green and Blue lines … 29,000 new jobs each month that exceed population growth.

How long will it take to recover the 8.7 million jobs lost during the Great Recession: At the ‘Real Job Growth Rate’ of 29,000 new jobs per month, it will require 300 months … or 25 years. That is a long time, during which many other significant concerns will come into play … like the U.S. Debt crisis … on track to explode during the next decade.

Wages remain stagnated: Federal Reserve Chair Janet Yellen has said she wants to see wages rise faster than inflation so American households will have more buying power. That has yet to happen. I personally think Janet and the entire Fed are living in a ‘dream cloud’.

New poll show majority rating the U.S. economy as ‘Poor’: Many Americans still think the economy is not fully recovered. According to the results of a CNN/ORC International poll released Friday, 41% of people surveyed rate the economy as "good", while 58% rate the economy as "poor."

Perceptions about the U.S. economy will be a key factor in November’s midterm elections: More than a third of the Senate and the entire House are up for grabs. Both sides of the aisle are blaming each other for holding back the recovery. I blame almost all of them. I hope the American voters will exercise their thoughts and register their voices in the upcoming elections and vote out of office the majority of those now in office.

Captain Rick’s Prognosis: America is traveling into uncharted territory, which if not handled properly by the U.S. Congress (which is very unlikely, based on performance in the past decade), has the potential to drive America over the pending ‘real fiscal cliff’ and reduce America to a ‘third world nation’.

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Captain Rick: U.S. Job Growth is not keeping up with population growth. The 8.7 million jobs lost during the Great Recession will never return. Despite the ‘glory employment talk’ presented by the Obama Administration, America’s job situation qualifies among the worst since the Great Depression. I present the simple math to expose a monumental economic problem developing that will help deliver America to the edge of the pending ‘real fiscal cliff’.

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BLUE LINE: 185,000 jobs need to be created each year to keep up with U.S. Population growth of 0.7%

RED LINE: 177,000 jobs represents the average number of jobs created during the past year. This demonstrates a negative pattern that is not keeping up with population growth.

Great Recession Job Losses are Gone Forever

8.7 million jobs were lost during the Great Recession of the late 2000s. It has been stated that 8 million of those have been restored. Simple math proves this to be incorrect. In actuality, none of those jobs have been restored when considering the jobs needed to be added each year to keep pace with population growth. America is running a significant job deficit.

Captain Rick’s Job Numbers Math

317,725,000 U.S Population

0.7% growth rate (*.007)

2,224,075 people enter job market every year

/12

185,340 people enter job market every month

*12 months *5 years

11,120,375 jobs needed to be added in past 5 years since prior to great recession to keep up with population growth

-8.7 Million jobs lost

+8 Million jobs regained

.7 Million jobs still needed to be recovered

+11.1 Million jobs needed to be added to keep up with population growth

11.8 Million jobs short since prior to the Great recession 5 years ago.

At the current pace of job growth, which is not keeping up with population growth, the jobs lost during the ‘Great Recession’ will never be regained.

Where the new jobs were created

The U.S. economy added 175,000 jobs last month

Construction added 15,000 jobs, restaurants and bars added 20,100 jobs and education and health services added 33,000 jobs.

By far, the strongest hiring came from professional and business services industries, which include accountants, architects and technology workers. This sector alone added 79,000 jobs last month.

Wages are up: Average earnings ticked up 9 cents, to $24.31 an hour in February. It was the largest monthly wage gain in more than two years.

Long-term unemployment and underemployment remain high

Long-term unemployment remains high. As of February, 3.8 million Americans were unemployed for six months or more.

The underemployment rate — technically known as the U-6 — was 12.6%. That includes the unemployed, plus part-time workers who want to work full time, and people who want a job but haven’t searched for one in the last four weeks.

Labor Participation is lowest since 1978

Labor participation lowest since 1978; just over 63% of the population is engaged in the workforce, driven partly by Baby Boomers retiring, but also by workers who had simply given up hope after long and fruitless job searches. It means that a smaller chunk of the population is paying for promised entitlements such as Social Security and Medicare. If a smaller share of the country is working, it will also act as a drag on economic growth.

What does this Employment data mean concerning the future of America?

America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently produce enough jobs to keep pace with America’s 0.7% population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’.  At the bottom lies America as a third world country.

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Captain Rick: U.S. Hiring plummeted in March to 88,000, its lowest level since last June. Unemployment ticked down 0.1% to 7.6% for the wrong reason…because 500,000 people dropped out of the labor market. This is my personal report that skips all of the hype and gets right to the facts. It’s a report you can believe.

Hiring plummets to 88,000

March hiring plummeted to 1/3 that of February and 1/2 of the number of a year ago.

Private Sector: 95,000 jobs added, mostly in professional and business services and healthcare. Growth was dragged down by the retail sector, which lost 24,000 jobs. The drop in retail was particularly disappointing, considering that the sector had averaged an increase of 32,000 jobs a month for the past six months. Construction jobs added 18,000 jobs in March.

Public Sector: 7,000 jobs lost. The U.S. Postal Service shed 12,000 positions, but were offset by other gains. This sector is continuing to be an overall strain on job creation. While the impact of the forced federal budget cuts, which began March 1, was a concern, it doesn’t appear to have directly affected the March payroll figures much. The federal government, excluding the U.S. Postal Service, shed only 2,200 positions.

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The red line in the chart above represents the 150,000 jobs that need to be created each month to keep up with population growth.  The average over the past 12 months is 159,000 jobs added per month…only 9,000 positive gain over the number needed to keep up with population growth. Overall, the U.S. economy lost 8.8 million jobs during the Great Recession, and is still down about 3.2 million jobs from the labor market’s height in January 2008. At the current pace of a positive gain of 9000 jobs per month, 30 years would be required to restore the lost jobs.

In the Labor Department’s survey, 206,000 fewer people said they had a job than in the previous month, even though a separate survey of employers in the March jobs report showed 88,000 jobs were added.

In addition, 290,000 fewer people were counted as unemployed because they were not actively looking for work. That drop in those seeking jobs was the reason the unemployment rate fell to 7.6%, the lowest since December 2008.

Unemployment Rate drops to 7.6%

The March reading was a .1 decline, but it is not good news because nearly 500,000 people dropped out of the labor market. 11.7 million people are receiving unemployment benefits.

Economists believe the rate will fall to 6.7% by the end of 2014. That would put it close to the 6.5% level that the Federal Reserve has said it wants to see before considering raising interest rates. Some of the anticipated drop will result from baby boomers retiring. If unemployed people continue giving up on finding a job at the rate experienced during March, the unemployment rate could drop even faster. Unfortunately the young looking for their first job are not figured into the unemployment rate because they do not yet qualify for unemployment compensation yet. All of this makes the unemployment figure really ambiguous…almost meaningless.

The nonpartisan Congressional Budget Office shows there are 3.9 million workers who should be in the labor force but are not because of the weakness in the job market. Counting them as unemployed would take the unemployment rate up to 9.8%.

Underemployment Rate drops to 13.8%

The underemployment rate, a more meaningful term, includes persons marginally attached to the labor force such as part time workers seeking full time employment and “over qualified” workers working in jobs below their caliber.

U.S Labor Force Participation Rate fell to 63.3%

The March reading is the lowest level since May 1979 when women were less likely to be working. For men age 25 and older, March was the lowest participation on record. The participation rate for those age 16 to 24 was near a 50-year low. The participation rate of “prime-age” workers, age 25 to 54, also fell to match the lowest reading since 1984.

Generally, this consists of everyone of working age (around 16), who are participating workers, that is people actively employed (either part-time or full-time) or people actively seeking employment. In the U.S., not maximum age is considered.
People not counted include people who are not employed and not seeking employment including students, retired people, stay-at-home parents, people who do not report income (tax evaders) and people in prisons or similar institutions.
Discouraged workers who want to work, but cannot find work and have thus stopped looking for work for at least a month are not included in the labor force in the United States.

Some of the downward trend in the participation rate in recent years is due to more baby boomers reaching retirement age, along with the longer life span of those who are retired. The greater the percentage of the population that is retired, the lower the participation rate.
The difficulty for younger workers finding jobs is also a factor, as more young adults unable to find work return to school to try to improve their prospects.

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Jobs: https://atridim.wordpress.com/category/jobs/

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Captain Rick: The January Jobs Report shows a continuing drop in new jobs created and a reality that job creation in America is stuck in neutral … or possibly reverse. 150,000 new jobs are needed to be created every month just to keep pace with population growth as represented by my red line in the chart below. Overall, the U.S. economy lost 8.8 million jobs during the Great Recession, and is still down about 3.2 million jobs from the labor market’s height in January 2008. The 5.6 million jobs that were created since the Great Recession also had to provide for the 9 million new job seekers entering the market since January 2008, due to population growth. Realistically, another 8.8 million jobs would have been needed to be added during the past few years to equal the American job scene of January 2008. At the current pace, those jobs will not be returning any time soon. Making things even worse is the fact that many of the jobs being added are relatively low paying in comparison to the jobs that were lost.

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The U.S. economy added 157,000 jobs in January. That’s slower growth than in December, when employers hired 196,000 workers. Some call it “Groundhog Day in the labor market” and say “We’ve been waking up to this same story for four years.”

The biggest job sector gainers
In January, businesses added 166,000 jobs while federal, state and local governments cut 9,000. The government continued to cut jobs for the fourth month in a row.

Retail added 33,000 jobs, with about a third of those gains at clothing stores.

Construction firms added 28,000 jobs, reflecting a stronger housing market and rebuilding efforts after Superstorm Sandy.

Health care added 23,000 jobs. Most of those jobs were in ambulatory health care services, a category that includes doctors’ offices and outpatient care centers.

Manufacturers added only 4,000 jobs. The Labor Department noted that employment in this sector has changed little since July. Manufacturing once was the job sector that built and sustained America as a great country. America’s manufacturing jobs have mostly been lost to places like China because of lower wages and NO unions!

Unemployment Rate
The unemployment rate increased to 7.9% in January, as 12.3 million people were counted as unemployed.
The number of jobless Americans out of work at least six months was roughly unchanged at 4.7 million and that group represents only 38% of the unemployed.

A broader measure of the job market’s health called the underemployment rate — it includes the unemployed, discouraged Americans who have stopped looking for work and part-time workers who want full-time jobs — was unchanged last month at 14.4%.

Outlook for 2013 and beyond
Economists are expecting job growth to remain stalled during 2013.  Political uncertainty that is still hanging over employers, as they wait for Congress to hash out a budget deal. Amid an impasse between Democrats and Republicans, chances are growing that automatic spending cuts, which aim to reduce deficits by $1.2 trillion over a decade, could take effect starting in March. All of this will likely have significant negative impact on the job scene.

The best hope we have of seeing an improving job scene in the next few years is for the U.S. Congress to pass legislation to permanently solve the U.S. Debt Crisis, including working towards balancing the budget. Our nation can not continue living on deficit spending … money it does not have. That is a recipe for eventual total economic failure. While it’s continuing practice of ‘kicking the can down the road’ might prevent further erosion of jobs short term, it will most assuredly will set our nation up for a much larger recession and loss of jobs in a few years.

View prior reports on Jobs: https://atridim.wordpress.com/category/jobs/

Captain Rick: Gross domestic product (GDP), the broadest measure of the nation’s economic health, grew at an annual rate of 3.1% from July to September (Q3). That’s more than double the sluggish 1.3% rate in the second quarter, however it only measures even with the break-even line. 3% economic growth, represented by the red line in the chart below, is necessary to provide enough jobs and wages to keep pace with U.S. population growth. America has fallen short of the line in all but three quarters during the past four years. A GDP growth rate of 5% for 4 quarters is required to reduce the unemployment rate by 1%.

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Consumer spending, which typically accounts for more than two-thirds of the U.S. economy, was the single largest driver of economic growth between July and September. U.S. households bought more motor vehicles and health care services, leading consumer spending to rise at a 1.6% annual rate in the quarter.

Government defense spending was another large driver, rising 12.9% in the third quarter. And home sales picked up, also contributing to economic growth.

Meanwhile, businesses built up their stockpile of goods and were hesitant to make new investments. Business spending contracted at a 1.8% annual rate in the quarter, dragging on overall economic growth. The largest cuts in business spending were on equipment and software.

Economists point to uncertainty about 2013 taxes and government spending cuts as the culprit that’s weighing on business investment decisions. The uncertainty generated by fiscal ineptitude has basically shut down investment spending. 

Economic Outlook: Overall, economic recovery remains sluggish. On average, the U.S. economy has grown about 2% a year for the last three years. Essentially this means the economy has actually going backwards at a rate of about 1%. Major portions of the fiscal cliff remain unresolved. The fiscal cliff and the pending debt ceiling will have to be addressed by about March 1 to prevent government default. The manner in which they are addressed will play a role in whether America dips into another recession next year.

Captain Rick: The Wall Street ‘chopping block’ has been in ‘full swing’ as large financial corporations cut 18 thousand jobs in recent weeks. Its more of the same story that is sweeping our world as businesses strive to ‘shore up’ their ‘bottom line’ in an economy that is as fragile as ‘thin ice’. 

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Citigroup announced it will cut 11,000 jobs as part of plan to trim costs. Citigroup has already begun making the layoffs, but expects them to continue throughout 2013. Layoffs are nothing new at Citi. Since November 2008, the bank has slashed about 25% of its staff. The 11,000 job cuts that were announced Wednesday amount to 4% of Citigroup’s current workforce, which stood at 261,000 full-time employees at the end of September.

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American Express announced Thursday that it was cutting 5,400 jobs, becoming the latest large financial firm to reduce its headcount. American Express said it expects to see its current work force of 63,500 reduced by between 4% and 6% by the end of the year.

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Morgan Stanley is expected to cut 6% of its workforce (1,600 jobs) in the coming weeks, due to "market conditions." Morgan Stanley, which currently employs nearly 58,000, has been trimming its workforce over the past couple of years. With this round of cuts, Morgan Stanley’s total headcount will have been reduce by 10% since September 2011, to roughly 56,000.

Captain Rick: Eurostat data published Tuesday showed unemployment in the 17-nation Eurozone hit a record high of 11.8% in November, leaving 18.8 million people without work – two million more than a year ago.
At nearly 27%, Spain has the highest unemployment rate in the European Union, and youth unemployment is more than twice as high at 56%. Thousands of Spanish bank employees will lose their jobs as a result of an EU-backed bailout of Spanish banks. Only Greece, which is facing a sixth year of recession, has a greater proportion of young people out of work.

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The Eurozone economy shrank in the second and third quarters of 2012, and official data due next month are expected to confirm a contraction in fourth quarter output.

Forecasts for 2013 are not much better, ranging from stagnation to another year of recession as governments continue to grapple with the fallout of the credit crisis, cutting spending and raising taxes to rein in budget deficits.

Hopes that stronger growth in Asia and the U.S. could spark a Eurozone recovery also took a knock, as Germany said its exports fell 3.4% in November, from the previous month, and were flat year over year.

View other reports about Europe: https://atridim.wordpress.com/category/europe/