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The Black Hole of Jobless in America
By EconMatters
June employment report from the BLS said the economy added 80,000 jobs (+84,000 in private sectors, -4,000 in government jobs) in June. The unemployment rate is unchanged at 8.2% from May, while the U-6 under-employment rate rose 0.1% from May to 14.9% (in 2007, the rate was 8%). The jobless rate has stuck above 8% for over three years since February 2009, the longest such stretch on record since 1948.
Even though the total employed jumped by 128,000, the jobless rate remained the same, partly because the labor force increased by a larger 189,000. That is not a good sign when the labor force is growing faster than job growth, as it suggests the unemployment rate could hit higher if the trend continues. Out of the total unemployed, 41.9% or 5.4 million is trapped in the long-term unemployed category (jobless for 27 weeks and over), while growth in private payrolls was the weakest in 10 months.
New Jobs in the USA (Sept. 2008 to June 2012)
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Chart Source: Flaglerlive.com |
The better news is that the jobless picture, while still gloomy, at least seems holding steady and not deteriorating. The bad new is that don't expect we can dig out of this unemployment hole any time soon either.
At an April 25 press conference, Fed Chairman Bernanke said about 100,000 a month job growth is needed just to stabilize the jobless rate, while 150,000 to 200,000 a month of new jobs are needed to reduce it. The latest estimation from the CBO (Congressional Budget Office) implies that roughly 90,000 jobs a month is needed to keep up with the projected population growth--the underlying rate of labor force growth is now just 0.7% annually.
According to economist Carmen Reinhart, the post-crisis weak period usually lasts as long as the boom that preceded it. The U.S. housing boom lasted 7 years (prices doubled from 2000-2007), which means the job market will also remain unhealthy until 2016, 7 years after the Great Recession officially ended in June 2009.
The more sobering view comes from the Brookings Institution. As of June, the U.S. faces a “jobs gap” of 11.3 million jobs since the start of the Great Recession in December 2007. Under the assumption of 208,000 new jobs per month, it will take until June 2020 – or eight years – to close the jobs gap. At 321,000 jobs per month, the economy will reach pre-recession employment levels by August 2016. (See Chart Below).
The reality is that regardless which estimate you go by, the current job creation trend still falls short--from April through June, the economy produced an average of just 75,000 jobs a month.
Furthermore, in addition to high national debt, the U.S. would have more than $600 billion in higher taxes and reductions in defense and other government programs starting in 2013 if the Congress fails to resolve the "financial cliff". Europe is facing its own "financial cliff" with sovereign debt crisis raging in several Euro countries, while China is also experiencing a significant slowdown, if not an outright recession.
With this high degree of global uncertainty, companies most likely will put off adding permanent positions, and maintain status-quo by either asking existing employees to work longer hours, or hire temporary workers to keep the business going.
The Great Recession and the poor job market in the past five years has stressed the middle class to the limit. The weakening economic outlook has partly prompted the Federal Reserve to expand its Operation Twist by $267 billion till the end of 2012. Based on the recent language from the Fed, QE3 could be coming as well. However, the seeds have long been sown from the poor fiscal and monetary policy implementation by the government. The president's 2009 stimulus program, and Fed's two rounds of QE have gone to either big banks or non-essential special purpose projects, with very little to where it'd matter in terms of jobs.
Right now, it looks like President Obama likely will get re-elected unless things start deteriorating fast and significantly (That's more a poor reflection of the current viable presidential candidates, instead of an endorsement of the current Administration.) So that means we probably should not expect much difference even with a QE3 or an Obama stimulus 2.0 after five years into the black hole of jobless.
Further Reading - Forget QE3, America Needs a Real Job and Road Stimulus
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I really don't think Obama has any compassion or even understanding of just how fucked Americans really are. In his book "Confidence Men" Ron Susskind told the tale of how shocked Obama's advisors were when he announced, paraphrasing here, that "Unemployment is a result of increased productivity, and there's not much to be done about it." He also had the 5 TBTF CEO's by the short hairs and let them off the hook on the Foreclosure problem. That's why we're not just stuck in neutral, we're going backwards: http://www.veteranstoday.com/2012/06/19/disclosure-time-games/
This is all fantasy best case stuff. Worst case is way out of these ranges.
Not to worry, there is a much simpler "fix" for the unemployment _rate_.
You don't need to have more jobs, you just simply have less people... duh.
I think TPTB are prolly waiting to see if the serfs will up and kill themselves a bit before they have to go and waste expensive bullets, or engineer a decent bird-flu, or the like.
Project "HIV" in the 3rd world has been a great success for them, a bit more tinkering and the HIV payload can be delivered by a more robust deployment vector like bird-flu and you've got "Yahtzee!"
Go ahead, tell me that you think there _isn't_ some small group think-tank that is working this "solution." With a "defence" spend that high, you can afford to work out every possible scenario, even the OMFG! ones. If you've ever fished through the de-classified docs (60-70 years back) you'll see that every "solution" is researched, and the bang-for-buck ratio filters out the winners... and spending a few million on some gene-eng beats the pants off of any other contender on the table, I guarentee it!
I have a better fix, and it doesn't involve killing anyone.
Just make unemployment illegal.
And watch that BLS stat drop like a stone.
Peer reviewed estimates show that 7million Americans may have died during the great depression, what will the total be this time with this engineered collapse?
The Misery Index (inflation plus underemployment) is ~20%.
(~6% + 15% = 20%)
http://www.shadowstats.com/alternate_data/inflation-charts
Doing government math are we? Last time I checked 6+15=21, but maybe the approximation is indicative of your error. + 1 is 5% error. Wish I could be off be 5% and still stay in business.
Amerika gives black holes a bad name, as black holes do serve and important role unlike the US guv.
This piece was written terribly.
terribly written?
... "poorly" written.
But.. but... but, it ain't going to effect my welfare check, right?
LOL. I'm loving the graph showing the future of job creation. Let me "throw a dart at the board." The line will turn back down violently in 2013. Why? Obamacare, Taxageddon, etc.
I love that Hamilton Project chart... lol... sweet, with luck like this I'm betting my life on winning the Mega-Millions jackpot.
Barack Obama - "it could have been worse".
Mitt Romney - "any job (nyuck, nyuck, nyuck) worth doing - is worth doing right".
Just remember boys and girls - when you cast that ballot - neither candidate gives a rat's ass about you or your family's future.
They (TPTB) only do best what's for the Big Club.....and guess what, folks. You and I? We ain't fuckin' in it! You and I are NOT in the BIG FUCKING CLUB."
- George Carlin
Here's a question for ZHer's: Do you think voting participation will rise or fall for this election? I say it could head to historic lows, considering how disinfranschised the populace under 35 years old is.
Yet again, the dumb Baby Boomers still believe in all of this bullshit.
Okay, I'll bite. If you really think that you are throwing your vote away, write in Ron Paul. I will, and will sleep at night. I believe a website is going up to track Paul's real popularity, but you should realize that you have never lived in a democracy to begin with. The truth is that when you allow unproductive labor to vote (such as paper-pushing faggots and lazy fucks), all democratic societies succumb to Mob Rule and become fascist/socialist countries. That is where the U.S.S.A is now.
Don't like it, FIGHT to restore the republic (knowing what a republic is helps).
Nothing in this life comes without sacrafice, get used to it. FYI- the parents of the baby boomers made a great sacrafice, the baby-boomers, not so much (there are exceptions of course).