The latest job numbers came out this morning and everybody is still holding their breath, but thinking about relaxing just a wee bit because the 10% unemployment rate didn’t change. Don’t. They are spinning these numbers, and of course, not giving the full picture (as usual). There seems to be some encouraging news from different industry sectors with the belief that the worst is behind us and that business may start hiring in a few months time. This would be the time to stop spending the stimulus on “shovel ready” projects that never happen and divert that cash towards tax breaks for small businesses.
Stuart Varney from Fox Business has a simple rundown that will help you understand the next part.
From The Wall Street Journal, and as usual, bold emphasis is mine.
Employers cut another 85,000 jobs last month, dashing hopes of a turnaround in employment, even as the U.S. economy grows.
With December’s losses, there were 7.2 million fewer jobs than in December 2007, when the recession began. Although the unemployment rate was unchanged at 10% from November, that’s only because many workers stopped looking for work and weren’t counted in the numbers. A broader measure of unemployment, including those who have quit job hunting as well as those working part time because they can’t find full-time work, remained about the same at 17.3% in December from 17.2% in November.
Here is the part that people haven’t taken into account, and aren’t telling you about.
Even once jobs come back, the unemployment rate may continue to rise. To keep up with a growing population, the economy needs to add about 100,000 jobs a month just to keep the unemployment rate stable.
Moreover, many people have stopped looking for work in response to the poor jobs environment. As a result, they don’t show up in the Labor Department’s tally of the unemployed.
In fact, a key reason why the unemployment rate didn’t increase in December was that work force declined by 661,000. As a result, as the labor market improves, and people re-enter the work force and begin looking for work, the unemployment rate could rise.
Can you imagine what the numbers would look like if those 661,000 were still looking for employment?
In the construction sector, hammered by the housing bust, the labor market worsened, with 53,000 jobs lost, compared with a November loss of 27,000. Nearly a third of the jobs lost were in the kinds of heavy-construction and engineering projects that much of the government’s economic-stimulus efforts are directed at creating, said Michael Carey, an economist with Calyon Securities in New York. “It seems like it should be working the other way,” he said.
Think back to when we absolutely, positively had to pass a $787 Billion Dollar Porkulus Bill to stimulate the economy. On December 10, 2009, the GAO sent a letter and 167 page report to congress detailing their assessment. The breakdown for the $787B is as follows. (Source: US Treasury via Recovery.gov 12.31.09)
- $288 Billion – Tax Benefits. $92.8 Billion paid out.
- $275 Billion – Contracts, Grants, and Loans. $68.5 Billion paid out
- $224 Billion – Entitlements. $95.7 Billion paid out.
December 10, 2009
Report to the Congress
States’ and localities’ use of Recovery Act funds continues as the nation responds to the most serious economic crisis since the Great Depression. Congress and the administration crafted the American Recovery and Reinvestment Act of 2009 (Recovery Act)1 with the broad purpose of stimulating the economy. As of November 27, 2009, $69.1 billion, or about one quarter of the approximately $280 billion in Recovery Act funds for programs administered by states and localities, had been paid out. Estimates show that the largest share of the funds is expected to be spent in fiscal year 2010.
Anybody still confused as to why our economy is mired in mud? $257 Billion has been disbursed with the majority not set to be awarded or paid out until later this year. Also, the one section that was meant to create jobs, namely Contracts, Grants and Loans, has had the lowest disbursement rate. No one screams and beats the drum for almost a trillion dollars to “stimulate the economy”, and then does a pre-ghost Scrooge. No one is this stupid. Are you listening Barry? Why are you weakening our country through our economy?
America is a democratic capitalist country and the barometer for its strength is not the size of it’s military, it is the condition of it’s economy; like it or not. – Logistics Monster
Mortgage Meltdown: The Wolf Has Eaten Spot…(9.22.2008)
…and we have been watching the fallout from lack of leadership from our elected officials and the raping and pillaging by financial pirates who chose to walk on the darkside because they could make a massive amount of money; quickly and quietly.
I know that I am not the only American that has known that the economy has gone from suffering the sniffles, then a slight cold, then a really bad head cold, to pneumonia. I have been watching the industry that I work in suffer for over two years now and have been living with the threat of layoff for about as long. A little over a year ago I was doing the groundwork for a business opportunity and just felt that it was not the right time to invest massive amounts of cash, time and energy into that project. I made the decision to not go forward and exactly two days later the whole Countrywide fiasco hit the MSM. As you might guess, I am very happy I did not travel that road but it does show that the wolf has been moving up the food chain gradually, quietly and relentlessly. Meanwhile, as the wolf has come down the mountain to feed upon average American’s paychecks, savings, retirement and college funds; our “leaders” have been doing absolutely nothing to hunt this demon down and dispatch it, with the exception of John McCain AND Hillary Clinton. I am once again left asking myself, why the devil is Barack Obama in this race at all? What was he doing two years ago; teaching economics or running a multi-million dollar company? If not, shut the hell up. I will not believe any rhetoric that comes out of his mouth because he has no chops to back it up.
We all know that the wolf was allowed to make it all the way inside our homes and eat our beloved Spot and the goldfish before somebody actually cried, “Market Collapse, Depression, Economic Crisis”, and decided that maybe they should actually put their heads together and try to fix what has become an intricately woven web of lies, deceit, and financial sleight of hand. I’m not holding my breath. Good Luck With That.
And now here we sit with 17.3% unemployment. I’m still waiting for the other shoe to drop.