Every month, the Bureau of Labor Statistics releases information regarding the jobs numbers, which shows how the underlying economy is performing. Also called nonfarm payrolls, since they do not include farm-related employment, the jobs numbers are one of the most important data sets for trying to understand the strength or weakness of an economy. If the jobs numbers are improving, this means more people are being employed and the economy is gaining strength. If the jobs numbers are weakening, or there are outright job losses, this is an extremely troubling sign for the economy.
I can guarantee you that a key point of discussion in the build-up to the presidential election will be the jobs market.
In my view, despite all the fuss about the July job numbers, job creation is dead.
Just ask the 12.7 million or so Americans searching for work or the over 23 million or so who are unofficially unemployed. These are real people looking for appropriate work in the jobs market. Moreover, there are also the millions working part-time or underemployed.
Wall Street is not hiring, technology companies are firing, and manufacturing is losing jobs to cheap overseas plants, where workers are willing to work for dirt-cheap wages.
We are seeing more college graduates working at low-level jobs just to pay the bills. And the reality is that given the dire situation in the jobs market, it could take years to resolve. There are also the mounting student loans that will take decades to pay, but then that’s another story.
The media pointed to the July jobs market numbers showing the creation of 163,000 new jobs, but the unemployment rate edged higher to 8.3%. The chart shows the inconsistency and the fact there needs to be a steady rise in jobs to cut into the unemployment rate.
Chart copyright Lombardi Publishing Corporation,
2012; Data Source: Bureau of Labor Statistics
The jobs market is even worse when you consider that the consensus among economists is that the country would need to add 500,000 jobs monthly to make a dent in the unemployment rate and get it moving towards full employment at around six percent.
President Barack Obama has … Read More
It will come as a surprise to no one that when there are problems within an economy, politicians will blame someone else in order to get re-elected. This practice has been going on for centuries.
When the U.S. experienced no winter this year, some hiring occurred earlier than usual, helping push up the job numbers. President Obama praised his administration for helping mend the damage to the U.S. economy caused by the financial crisis.
Recently, this temporary reprieve has completely dissipated with the job numbers. When the latest jobs numbers revealed such extreme weakness within the U.S. economy, President Obama blamed the financial crisis in Europe for the problems here in the U.S.
Lack of confidence on the part of corporations and reduction of exports resulted in weaker job numbers here in the U.S., which of course means that voters cannot blame the president; they can only extol his administration if the job numbers mysteriously turn up again. After all, it is not his fault that Europe is in the midst of a financial crisis.
There is no question that President Obama inherited a mess from the financial crisis, so blame should not be squarely on his shoulders. However, the jobs market is structurally very weak with record amounts of people falling into the category of long-term unemployed. Where are the programs to help these people and repair the jobs market in general?
Corporations are not spending due to the litany of changes taking place with health care and taxes. Where is the resolve to clear out all this red tape and institute binding regulation that provides clarity as to … Read More