This page has been archived and commenting is disabled.
Unemployment Remains Unchanged in March
From The Daily Capitalist
The unemployment rate remains unchanged as of today, at 9.7% for the narrow measure of employment (U-3). The broader measure of unemployment, U-6, a measure of long-term unemployment increased from 16.8% to 16.9%. See the definition of U-6 unemployment at the bottom of the table, below.
One positive note was that private payrolls increased by 123,000 workers. I don't include the 48,000 government Census workers as "jobs" since their wages are just transfer payments. If you discount the Census workers, unemployment would be at 9.8% (the unrounded current number is actually 9.749%). Basically we haven't improved much over the last year.
Tim Geithner was quoted as saying today, "We’ve made a lot of progress, we’ve got some work to do still and it’s going to take some time to heal the damage.” I don't know how he can say this in light of the above table. The BLS says right at the top of their release that 15 million Americans are still out of work. More worrisome is the increase in the U-6 percentage.
Gains were seen in health care (+27,000), manufacturing (+17,000), and temporary services (+40,000). One surprising area of growth was construction (+15,000) since this sector has been steadily shedding jobs. My guess is that some of the "shovel ready" government infrastructure make-work projects are getting going. But that will run out eventually. Also the growth in health care is not a healthy sign as I see it as more of a shift from the private market delivery of health care to a government mandated system supported by tax dollars.
One important figure was the continued decline in wages. While hours worked gained 0.1%, wages fell by 0.1%. From the BLS release:
In March, average hourly earnings of all employees on private nonfarm payrolls fell by 2 cents, or 0.1 percent, to $22.47, following a 4-cent gain in February. Over the past 12 months, average hourly earnings have risen by 1.8 percent. In March, average hourly earnings of private production and nonsupervisory employees fell by 2 cents, or 0.1 percent, to $18.90.
The news media are spinning this news as a positive, ("third gain in the past five months" or "fastest pace in three years"). Which is all true. Most commentators are pointing at manufacturing, which has shown some good increases in activity, to lead us out of the recession. This is possible but I think this call is premature. Without an increase in consumer consumption (PCE), manufacturing gains will stall.
David Rosenberg thinks the gains in tech equipment sale and software are just front-loading to beat the expiration of tax benefits. I think a lot of it is that cheap interest rates are fooling manufacturers into thinking they can afford new equipment when actually consumers have been cutting back spending and increasing savings (see my comment on PCE and savings and why consumption will also stall). Also, manufacturers are offering good deals for their customers.
I hope that manufacturing will continue to improve but I don't think there are enough real savings now to support manufacturing growth. This is a confusing issue because into the interest rate mix you have to figure in the record amount of debt the Treasury is selling, which is causing interest rates to climb. The 10 year note hit 3.954% today (Friday). The Treasury is swamping the market with debt. Next week they are selling another $94 billion. While companies are relatively flush, a rise in interest rates would slow down a lot of planned projects during a continuing credit freeze.
»
- advertisements -
manufacturing improving? I can nix that notion lickety split. I have lived mfg for 25 years and no such improvement in my region. Stabilization, maybe; hanging by a thread, yep. No equipment vendors I talk with are doing any good at all, and service providers are starving to death. Hooey on those stats.
My opinion of this market remains unchanged too.
U6 unemployment would be close to 22% if it was calculated the pre 1994 way. It looks like we may finally stabilize and stop dropping further in April (gain at least 120,000 new non-census jobs that it takes to keep up with population growth just to stay even) but I dont see any way we start gaining the 300,000 plus a month it would take to make any real difference over a years time. It looks like we might even double dip in Q3 of this year when all the stimulus has worn off.
all the globalization and deregulation is going nicely according to the plan.
Econophile,
You didn't mention the duration of unemployment, which for those unemployed 27 weeks or over has risen from 40.9% to 44.1%.
Also, GS had lowered their forecast from 275k to 200k, the average forecast had come in at 178.13k and the ACTUAL was 162k.
The analysts didn't do a very good there, did they (oh, and WELL done to GS!)?
DavidC
Around here those shovel ready projects are already being cancelled or held up. States are expecting the moral hazard train to stop and unload more cash.
I know the owners of a local blueprinting firm. Pretty much all of the civil engineers and architects within a 50 mile radius use them, and they've see no uptick in business for the past year to year-and-a-half. In fact they just compacted down their operation by 1/3rd and are trying to rent out the newly emptied office space.
What I don't see covered anywhere is how the number of long term unemployed dropping off the rolls is affecting the statistics. Over 46,000 in New York state alone last month.
Nor do I see a mention of the average length of unemployment, which is up over 30 weeks at this point.
http://research.stlouisfed.org/fred2/series/UEMPMEAN?cid=12
Wow their has to be some kind of breaking point to how many months a person can on average be out of work when they lose a job.
The hype on the U.S. job recovery Friday went worldwide, before it started backing off—it now appears to be just another extension of mixed news. I listened throughout one entire news cast Friday that never mentioned that the unemployment rate remained at 9.7%; it just hyped recovery--over and over…and over. Yet, when the unemployment dropped from 10% to 9.7%, Obama actually called a press conference! and the financial media reported the figures in “57 Varieties” for an entire month—they were even repeated a few days ago on the front page of the WSJ.
Nor did I hear but one mention in the news that the jobs report was “worse than expected.” Perhaps the media is only programmed to repeat “better than expected.”
It’s the bulls, the brokers and the government--who never mention the negatives--versus the golds, the shorts and the bears, who live with reality.
Oddly, the hype seems reminiscent of the slogan that Stalin used to usher in his notorious era of purge and terror in the mid-1930s: “Life is better, life is gayer." Let us hope not.
After the Jobs number came ou.t I went to HuffPo to have a look....
The biggest headline you ever did see.....I love propaganda!
One look at capacity utilization tells it all. Plenty of machines sitting around doing nothing,,,,
+10
HP is an Obama propaganda tool with the occasional objective piece thrown in just to disguise their captured state.
Fuck Arianna Huffington......literally!!!
Why not? Look who she fucked to get rich.
Lots in my area are FILLED with trucks, trailers, heavy equiptment etc doing NOTHING.
The only things are moving is the rigs associated with Nat Gas Drilling in the Arkansas Shale. That is going like gang busters every day!
The railroad is down to a few trains a day. In 2003, the trains will pass every hour 24/7.
Look, can't we get past all the changes in "unemployment", the endless bickering around how many U4s or "discouraged" workers or emergency claims can dance on the head of a pin, why don't we just look at EMPLOYMENT, the actual important measure of how we're all working to support ourselves. My math (product of average working hours and total employment rolls) shows that, as of mid 2007, we spent 9.5% of our total available working time producing for consumption, and now we're spending 8.5% of our total available time. Reduction of just over 10%. Should be evident that corporate net incomes would take a hit and therefore the values of equities, if it the losses weren't all hidden in the banks' mortgage books.
econophile,
What I see is the weakest competitors per category radically lowering prices in the manufacturing sector to keep cash flow.
In essence, I see folks using the productivity gains of the past 18 months to lower prices and still make some margins above a lower cost basis.
The deals available out there are unprecedented and impossible to turn down
lazy Americans...
We are abandoning full time work to go part time. Two reasons, rising health care premium costs deducting from payroll and increasing stress from supervisors intent to cut every last penny from thier cost during the workday. They stand over the full time staff breathing down thier necks making sure that every minute of the day is moving something useful.
One Hospital already make nurses deal with 6 patients instead of 4. Soon the talk or rumor says.. they might get 8 patients to take care of.
The harder the screws tighten on the worker's thumbs, the easier it is to go partime or quit for less stressful jobs.
I am a Temp and have been laid off from one account for years due to costs. It is cheaper to pay another temp agency who have workers with IQ of a brick and follow shouted orders doing tasks that the account's full time staff wont do. Menial work I tell ya.
All while revenue gets tighter and cost containment increases.
What a Country we live in. Land of the Free from Work Schedules.
I can provide empirical data to support exactly this. The most qualified are heading for the exits and taking tax revenues with them.
http://1.bp.blogspot.com/_pMscxxELHEg/S7Xk3qGDfpI/AAAAAAAAH74/ROspi6r3z-c/s1600/EmployMarchRecessions.jpg
https://research.stlouisfed.org/fred2/graph/fredgraph.png?graph_id=22103
http://research.stlouisfed.org/fred2/graph/fredgraph.png?graph_id=24081
https://research.stlouisfed.org/fred2/graph/fredgraph.png?graph_id=22318