...usually with an attempt at historical and economic context
Friday, January 8, 2010
Unemployment Numbers: Same Old, Same Old for Months To Come?
If you are looking for a job, no one needs to tell you that the American people, including employers, aren’t seeing much of a recovery from the recession. The “improvements” we’ve seen have been mostly from temporary government programs like “Cash for Clunkers” and various other government money going into the economy. Not really the stuff of healthy recovery. The following words from the Bureau of Labor Statistics give a brief description. Their web site gives more details:
“THE EMPLOYMENT SITUATION -- DECEMBER 2009
“Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.
“Household Survey Data
“In December, both the number of unemployed persons, at 15.3 million, and the unemployment rate, at 10.0 percent, were unchanged. At the start of the recession in December 2007, the number of unemployed persons was 7.7 million, and the unemployment rate was 5.0 percent….
“Unemployment rates for the major worker groups--adult men (10.2 percent), adult women (8.2 percent), teenagers (27.1 percent), whites (9.0 percent), blacks (16.2 percent), and Hispanics (12.9 percent)--showed little change in December. The unemployment rate for Asians was 8.4 percent, not seasonally adjusted….”
“About 2.5 million persons were marginally attached to the labor force in December, an increase of 578,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey....” (Source: Bureau of Labor Statistics) (Emphasis added)
The report for December was worse than many analysts expected. According to an AP story giving some analysis of the BLS report, “Counting the people who have given up looking for work and the part-time workers who would rather be working full-time, the so-called underemployment rate edged up to 17.3 percent in December. The record high is 17.4 percent, reached in October.”
“It was the second straight month the unemployment rate came in at 10 percent. The only reason it didn't rise was that 661,000 people stopped looking for jobs and left the work force.” 
The 17.3 and 17.4 percent figures compare to the 25 percent unemployment rate during the depths of the Great Depression. The U.S. saw 85,000 jobs lost in December. UPS is planning to lay off 2,000 workers and Lockheed-Martin will cut 1,500 jobs later this year. There are numerous applicants for most jobs that are advertised.
According to the AP article, “But the jobless rate is likely to rise in coming months as more people see signs of an improving economy and start looking for work again. Some economists think it could near 11 percent, which would be the highest since World War II, by June.” 
The government’s plans, including the recently-passed House “jobs” bill, call for government funding of programs to create jobs, extend unemployment benefits, and give money to states to help with their budget shortfalls. None of these measures is a substantial attempt to address the problem. Instead, it represents more government debt, and, by increasing the deficit, actually makes matters worse because it discourages more private-sector hiring outside of the specific targets of the legislation. The Senate is reluctant to act on the House bill.
Government policies, and uncertainty about what (or how bad) future policies will be, continue to discourage private-sector employers from expanding and hiring. One must wonder what the priorities of this government are, because they seem obsessed with getting a massive health-care taxing and entitlement program in place as soon as possible, before anything else is done. That is the top priority at the moment. Most people, including employers, and many in health care related industries oppose this legislation. It is an economic downer for everyone, except some insurers, and people who might benefit by getting government subsidies in Obama’s redistribution efforts. Don’t look for it to be any kind of boost to the economy. Just the opposite.
How can banks, manufacturers, and employers in general feel free to expand credit and payrolls when they are under a strong threat of numerous and expensive new taxes and regulations coming from government? It should be fairly obvious that economic recovery is not the government’s current plan, because virtually nothing is being done to encourage private-sector economic activity, and many things are being done to prevent it from increasing.
The government appears to want to control (if not own) every aspect of the economy, and that is largely the problem. Memo to government: It’s not rocket science. Let’s just stop trying to tax and spend our way out of this with more pork projects and entitlements. Get out of the way and let the market work. We’ll see good results fairly quickly.
I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.