Archive for the ‘Unemployment’ Category

Captain Rick : U.S. Labor Report disappoints those looking for a job and paints a stagnant image of the U.S. Economy as it continues its course toward Socialism.

The Labor Department reported the U.S. economy added only 151,000 jobs in January, well below expectations for 190,000 jobs. The unemployment rate ticked down to 4.9% from 5% the month prior, while forecasts called for it to remain unchanged. Meanwhile, the labor force participation rate rose to 62.7% from 62.6%, despite expectations for it to hold steady. Its all a sign of America headed toward Socialism.

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This Labor Report sends a cold chill for the U.S. Economy …

The creation of only 151,000 jobs is very weak considering it is only 0.56 % of U.S. population (323 million). That does not even equal the U.S. population growth rate which is about 0.7% … which means that job growth is not only stagnant, but going in reverse. The U.S. still has not recovered millions of jobs lost during the Great Recession.

The unemployment rate of 4.9% is totally bogus … its meaningless. It only represents the minority of job seekers that are still receiving unemployment compensation. The real unemployment rate is more than twice as high. Most job seekers have exhausted their benefits, still looking for work with no income, are working a part-time job to make ends meet or have given up looking for work.

Perhaps the most important statistic in the labor  report is the drop in the Labor Force Participation Rate … to just 62.6%. It means that about 1/3 of eligible U.S. workers are not working. Some retired early and are living off of savings. Some have managed to work the system and are living off of welfare benefits, including many who have managed to acquire ‘Disability’ status and are collecting U.S. Social Security Disability benefits (SSDI) and some who are being supported by friends or relatives and some who are homeless. The Labor Force Participation rate has been in steady decline since its peak of 67.3% in 2000. This trend is a vivid indicator of America’s march toward Socialism.

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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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Previous reports:

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

Unemployment: https://atridim.wordpress.com/category/unemployment/

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/

Captain Rick: The December Jobs Report marked the tenth month in a row of lackluster job creation. Only 155,000 jobs added, just above the red break-even line of enough jobs to keep pace with population growth. That leaves 4.8 million discouraged workers … hopelessly unemployed.

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1.84 million jobs were created during 2012. That sounds huge, but it only broke even with the 1.8 million needed to keep pace with population growth.

U.S. Unemployment rate is inept and meaningless … the real unemployment rate is about 15%

I no longer report on the U.S. Labor Department unemployment percentage, which basically counts only those who are registered and receiving unemployment compensation. It does not include the other half of the workers that dropped off of the government’s ‘radar screen’ … the 4.8 million who have exhausted their unemployment compensation and remain discouraged and hopelessly unemployed. The Labor Department should abandon the ‘unemployment rate’ and replace it with a figure that is closer to reality. The actual unemployment rate, sometimes called the ‘underemployment rate’, stands at about 15%, among the highest since the Great Depression of the 1930s.

The growing number of hopelessly unemployed is worrisome

Studies widely show the longer a person is unemployed, the weaker his or her chances are of getting a job. At some point, long-term unemployment can lead workers to become permanently detached from the labor force. That’s not good for the economy.

How long will it take to reduce unemployment to pre recession levels?

The Hamilton Project, an economic research arm of the Brookings Institution, publishes a “jobs gap” calculator that estimates just how long it will take to get back to pre recession levels, assuming the only major job market dropouts are Baby Boomers who are retiring. At the current rate of hiring, the Hamilton Project estimates it would take until 2025 to get back to a pre-recession job market. I must caution … that report does not consider the monumental fiscal challenge America faces with the upcoming Fiscal Cliff Sequester and Debt Ceiling issue. If President Obama and the U.S. Legislature continue to ‘kick the fiscal can down the road’, it could be far beyond 2025 before America recovers to pre recession unemployment levels, possibly never.

Caution for U.S. State Governors and City Managers

If you think America is on the road to recovery … THINK AGAIN !!! America is on a very serious fiscal downhill slide …headed for the ultimate ‘Fiscal Cliff’. Continue to spend money like there is ‘no tomorrow’ or prepare for coming reality by shoring up fiscal defenses.

Get Educated about the serious fiscal problems facing America … and the world

A great source: Captain Rick’s Fiscal Cliff Course 101 … The course starts at the very bottom.