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Improving Employment or Dead Cat Bounce
Courtesy of Lee Adler of the Wall Street Examiner
The real measure of sustained and sustainable improvement in the US economy isn't just total employment; it's full time employment. Part time jobs normally don't pay enough to even pay the rent (the rent is too damn high), let alone support a family. When business won't invest in hiring full time workers, that may be good for their profits in the short run, but it can't support sustained economic stability, and it certainly won't promote long term growth.
By that standard, even though today's jobs report showed great growth, it is not the kind of growth that will sustain a stable or growing economy. Instead the numbers show an economy retarded by the dead weight of too many people not working.
The government's household survey showed an increase of 476,000 full time workers in October, based on the actual, not seasonally fictionalized, survey data. That's the best October performance since 1996. Sounds great, right?
Full time employment peaks in July or August and then typically declines until January. This year's drop since July is 303,000. That is the best performance since the data on full time employment started being tabulated in 1968. This is very good news indeed!
The devil, as always, is in the details. The number of those employed who usually work full time this October was reported to be 113.5 million. That's better than the last two years. It's an increase of 1.86 million full time jobs since October 2009, for an average increase of over 77,000 per month.
Therein lies the problem. The percentage of the population working full time now stands at 47.2%, which is hardly better than last October's 47.1%, and the same as 2009's 47.2%. Even in October 2008, in the pits of the financial collapse, the percentage of the population working full time stood at 51.2%. In fact, we have to go all the way back to 1975, when fewer women were in the work force, to find a ratio this low in October.
So while it's great that the numbers appear to be improving, we have to ask ourselves, "Improving from what?" These numbers remain equivalent to the worst levels of the past 43 years.
October's improvement may even prove to be a fleeting mirage. Federal wage tax collections for the full month of October were down by 1.3% on a per diem basis versus September. The BLS household survey is conducted earlier in the month. Back on October 20, withholding tax collections for the month to date were running 1.7% ahead of September. That's consistent with the gain in October employment which the BLS reported.
However, by the end of the month, that advantage seems to have disappeared. Over the last 10 days, withholding tax collections are virtually flat versus the 10 days through October 3. Furthermore, in real terms, adjusted for the change in employment costs, withholding for the past 10 days is down 3.7% from last year. Some, but not all, of that is due to the cut in payroll taxes. The data suggests that no more people are working today than were working a year ago.
As the graphic shows, the US employment picture has not even begun to recover from the devastation that took place from late 2007 through mid 2009. It's just laying there dead in the water. This is not recovery. Furthermore, real time withholding tax data, which is not subject to survey error or statistical manipulation, hint at recent weakening. This data suggests that the the signs of improvement in the BLS data were little more than a dead cat bounce from brutally bad levels.
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The gubmint always gives lip service to our unemployment problem, but never do a damned thing about it. Expanding the numbers working for the federales is no answer, as they produce no wealth.
Where's the tax break for companies that hire new people? How about relaxing regs on companies that expand? How about low interest loans for capital investments in new machinery and facilities? How about some tariffs on imports that are dumped here by countries with high tariffs on American goods?
This tells me they are happy with the situation, turning more and more of us into welfare queens they can easily monitor and control. These dependents will vote for a bigger gov, every time...
What most people tend to forget is that the labour market is subject to the forces supply and demand just like other markets. If you have an oversupply of labour, like in the US since the size of the workforce has increased so dramatically for 30 or 40 years, you get unemployment or lower wages since employers have so many good workers to choose from. If the United States had not had such a dynamic labour market with few regulations compared to countries like Spain, for instance, and if Americans had not spent instead of saving for the last 30 years and if the Federal Reserve had not printed money to the extent that they have, then you would probably have had much higher unemployment figures.
Furthermore, I suspect that unemployment in the US will rise if Europe will force oil exporters to get paid in euros so that they can print more money. If some of the oil will be paid for in euros rather than USD, then the oil market will not be able to absorb as much dollar printing as in the past. That will in turn mean that the US government will have to cut spending or raise taxes in order to compensate for less printing by the Federal Reserve (like most of you know the Federal Reserve prints money which it lends to the US government so that the government does not have to do anything about the budget deficit). And if the US government cuts spending or raise taxes the demand for goods and services will shrink and therefore in turn also the demand for labour.
Furthermore, I suspect that unemployment in the US will rise if Europe will force oil exporters to get paid in euros so that they can print more money. If some of the oil will be paid for in euros rather than USD, then the oil market will not be able to absorb as much dollar printing as in the past.
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Oil is and has been traded in every currency on the planet-forever-
I have no idea where this BS theory of Oil having to be traded only in USD's comes from-
Oil and currencies are fungable-same for gold or any other commodity-
If the Euros buy gold or oil they simply pay for it in EUR-
The USD/Oil price is simply a bench mark price-
O.K....a couple of questions from a simple person.
Do they consider 'full time employement' to be that of someone hired in for 40 hours per week on a 'temp' basis?
Because we are headed into the holiday season where historicaly 1/3 of retail business occurs for the entire year in like two months. So there is a lot of hiring of people to work long hours and then they 'go away'.
And...I wonder what 'percentage adjustment' we can expect as it typical after the quarter when [they] revise the published numbers downward
O.K....a couple of questions from a simple person.
http://globaleconomicanalysis.blogspot.com/2011/11/52-of-unemployed-no-l...
Since the earliest of times, pussy and money have always shared a close relationship. Especially that one usually cannot be obtained without the other.
how about protection? i guess now a days that does not mater.
The solution to unemployment lies in the quality of our money supply-
When money is locked and cannot be inflated to nothing like it has been and instead always retains its buying power-then only one person working in the family is sufficient-
If you took all married/living together couples and could cut out 1/2 of them-the unemployment problem would disappear-
Prices of wages/goods and services would have to adjust to the limited money supply but as it is with constant money devaluation and stagnant wages-prices will always outrun affordability and require everyone to have a job-
Food stamps usage is up! U-6 is 16.2%. Drug use is rampant as is Alcholol abuse in our youth. Who is kidding who? Our country is in deep trouble as our debt is heading over 15 Trillion. Marxist Ideaology has worked its magic again!
"Who is kidding who?"
"Who is kidding WHOM?"
And what's this bullcrap about "Marxist Ideaology" (sic) ???
Are you referring to the Socialist Plutonomy, said socialism closed to the rest of us?
Are you a follower of the Sarah Palin School of Economics, which moronically proclaims that the reason for the global meltdown was the 4% default rate in America (actually less than half of that when the meltdown started)?
And that any Greek default, with Greece making up ONLY 5% of the financial structure of the EU, would lead to another global meltdown?
You are so bereft of any knowledge, so cosmically ignorant, you are unaware that it is those hundreds of trillions of dollars' worth of debt (securitized debt) which the banksters peddled to make their ill-gotten billions and billions, which debt they then shift onto the rest of us (by "us" I am referring to the sane ones here, not you), as the actual cause for past and future meltdowns?
Are you really both that illiterate and ignorant?
Take a look at the continuous increase in "defense" spending over the past 50 years, and compare against the increase in the national debt.
Note the one-to-one correlation?
Excellent post, Madam Ilene, but I have long since given up on accepting any stats coming out of Washington, and Wall Street.
All I know is that Jon Corzine is a two-bit thief, stealing $1.5 billion from his customers, getting Wall Street neocon Gary Gensler (one of Obama's 100% neocon administration appointees) to collude with him, and his obvious cooking of the books to hide said debt.
Of that I am sure......
Are you a follower of the Sarah Palin School of Economics, which moronically proclaims that the reason for the global meltdown was the 4% default rate in America (actually less than half of that when the meltdown started)?
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I must be ignorant-because i have no idea what you're trying to say-
The reason for the global meltdown was the fact that the price level of the so called "collateral" fell out from under the insane leverage and could not be sold/marked to market without exposing the real market value-"zero" that once held up trillions in paper derivatives/CDO's/CDS's-
It mattered not what the default rate was-there was no way to unwind even 2% without bringing the whole fraud into the daylight-
sorry duplicate
The last typical recession in US was during '90-91 period. As expected, Food Stamp participation rate would highly correlate with improving economic conditions and accordingly decline. But this has not happened since 2001. Food Stamp participation rate has been alarmingly rising at a geometric rate of .8% per month since 2001 until 2011(last date of my research.)
I watched PBS Nightly News yesterday, they had some analyst explain that things were looking up for corporate profits because of productivity gains, anther words who cares about long-term unemployed? How ignorant!
Ilene, good work, but if everyone is wondering what the problem is I think I might be able to help you out... "The devil, as always, is in the details. The number of those employed who usually work full time this October was reported to be 113.5 million."
This is a government statistic and as such is itself a lie.
Kina, great minds think alike, while I was writing my response you scooped me. When two independent great minds think the same thing at the same time it MUST be true.
Impossible to know what the statistics are since it is a toss up for when they are lying and not lying.
But an unemployment rate that doesn't measure those that are too long term....only in the US.
It's obvious the unemployment numbers are worthless anyway, food stamps would be going down, not up if employment was going up. You could halve the unemployment easily enough if everyone without a job stopped looking for one. More BS statistics for the HFT to cheer about.
OK let's cut to the really boring crap of real issues and the dry and factual presentations of Ellen Brown.
http://www.youtube.com/watch?v=QU0XiklHPMc
Usually I find it hard to take women seriously, what with 'celeb' nonsense ... but here is a woman I admire.
Come to think; there are few men that I admire, what with obsessions about football celebs.
Anyhow start getting away from trivia via Ellen Browns "Web of Debt".
Dead cat bounce. No question.
Bank guy in brussels is here,
Stop the world,and run things his way now.
Since the obvious situation is that economic entities are earmarked for elimination in the global corporate consolidation, employment figures mean nothing in the future financial landscape.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Ilene and everyone else, please stop using the very disturbing and hurtful phrase 'dead cat bounce'.
It is painful and offensive to many of us who love companion animals, especially to those of us who know cats, who are such wonderful loving creatures in our lives.
You are all creative enough to use English more gracefully, and avoid that ugly phrase embodying perverted sadism at the death of an animal.
dead cat bounce, dead cat bounce, dead cat bounce, dead cat bounce,
dead cat bounce, dead cat bounce, dead cat bounce, dead cat bounce,
dead cat bounce, dead cat bounce, dead cat bounce, dead cat bounce
bank guy in brussels who do you think invented that phrase?
It's dead, it's not going to feel any pain.
Since you love cats, may I recommend a great book:
Teaching Your Cat to Play the Violin.
Okay everybody...anytime you see "bank guy in Brussels" (Dexia? quelle dommage, mon frere!) posting make sure to all use the more appropriate "dead chinchilla bounce" instead.
http://www.youtube.com/watch?v=aV_LnK-wDUo
Well then how about "Feline elastic rebound"?
You mean like a V-shaped recovery cat ... or hits the deck and causes earthquake cat? ...
Pussy lickin' good?
The cat is already dead so it doesn't feel the bounce. You have to think about things a little before rushing to judgement!
The cat is already dead so...
Oh, I should have read that more carefully.
Sorry puss, and he didn't bounce (much).
I have a cat. And a sense of humor.
Kitty needs to be put in a cage ... taken to a vet ... and like, put down.
http://www.youtube.com/watch?feature=player_detailpage&v=VhVEEn3P8I4
Surprise! You get to the Vet and a group of cat lovers put y o u down. Mwaaaaaaaaaaaaaaaaha
lol ... yeah ... you're right ... maybe a sack, a brick, and a river then ... mwwhahahaaaaah!