Posts Tagged ‘Jobs’

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: The leaders of our world seem to lack common sense in dealing with the many serious problems that face our world … so I think the best remedy is some political humor.

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Thanks Ken of California for contributing these comic works of art.

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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: 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.