America’s Jobs Losses are Permanent
by ilene - October 29th, 2010 2:23 pm
America’s Jobs Losses are Permanent
Courtesy of PAUL CRAIG ROBERTS, originally published at CounterPunch
Now that a few Democrats and the remnants of the AFL-CIO are waking up to the destructive impact of jobs offshoring on the US economy and millions of American lives, globalism’s advocates have resurrected Dartmouth economist Matthew Slaughter’s discredited finding of several years ago that jobs offshoring by US corporations increases employment and wages in the US.
At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s kool-aid than to tell the truth. Recently the US Chamber of Commerce rolled out Slaughter’s false argument as a weapon against House Democrats Sandy Levin and Tim Ryan, and the Wall Street Journal had Bill Clinton’s Defense Secretary, William S. Cohen, regurgitate Slaughter’s claim on its op-ed page on October 12.
I sent a letter to the Wall Street Journal, but the editors were not interested in what a former associate editor and columnist for the paper and President Reagan’s Assistant Secretary of the Treasury for Economic Policy had to say. The facade of lies has to be maintained at all costs. There can be no questioning that globalism is good for us.
Cohen told the Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities.” I bet Buffalo “and other American cities” would like to know where these jobs are. Maybe Slaughter, Cohen, and the Chamber of Commerce can tell them.
Last May I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings, even vacant downtown storefronts.
Detroit is trying to shrink itself by 40 square miles. On October 25, 60 Minutes had a program on unemployment in Silicon Valley, where formerly high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.
The claim that jobs offshoring by US corporations increases domestic employment in the US is one of the greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time and again in my book, How The Economy Was Lost (2010), Slaughter reached his erroneous conclusion by counting the growth in multinational jobs in the U.S. without adjusting…
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Weekly Claims Drop to 451,000, 4-Week Moving Average at 478,000; Where to From Here?
by ilene - September 9th, 2010 10:32 pm
Weekly Claims Drop to 451,000, 4-Week Moving Average at 478,000; Where to From Here?
Courtesy of Mish
Weekly Claims fell this week to 451,000 but that number is still consistent with an economy losing jobs.
Please consider the Unemployment Weekly Claims Report for September 9, 2010.
In the week ending Sept. 4, the advance figure for seasonally adjusted initial claims was 451,000, a decrease of 27,000 from the previous week’s revised figure of 478,000. The 4-week moving average was 477,750, a decrease of 9,250 from the previous week’s revised average of 487,000.
Unemployment Claims
The weekly claims numbers are volatile so it’s best to focus on the trend in the 4-week moving average.
4-Week Moving Average of Initial Claims
The 4-week moving average is still near the peak results of the last two recessions. It’s important to note those are raw numbers, not population adjusted. Nonetheless, the numbers do indicate broad, persistent weakness.
4-Week Moving Average of Initial Claims Since 2007
No Lasting Improvement for 8 Months
There has been no lasting improvement since December 2009, eight months ago. The above chart is slightly off, the Fed has not updated the series yet today. The last data point is at 451,000.
To be consistent with an economy adding jobs coming out of a recession, the number of claims needs to fall to the 400,000 level.
At some point employers will be as lean as they can get (and still stay in business). Yet, that does not mean businesses are about to go on a big hiring boom. Indeed, unless consumer spending picks up, they won’t.
Questions on the Weekly Claims vs. the Unemployment Rate
A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"
The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.
Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can…
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Non Farm Payrolls: The Devil Is In the Adjustments
by ilene - September 6th, 2010 5:15 am
Non Farm Payrolls: The Devil Is In the Adjustments
Courtesy of JESSE’S CAFÉ AMÉRICAIN
When the US government announced a ‘better than expected’ headline growth number in its non farm payrolls report for August, a loss of ‘only’ 54,000 jobs versus a forecasted loss of 120,000 jobs, people had to wonder, ‘How do they do it? We do not see any of this growth and recovery in our day to day activity.’
Here’s one way that those reporting the numbers can ‘tinker’ with them to produce the desired results.
As you may recall, there is often a very large difference between the raw, unadjusted payroll number and the adjusted number. Seasonality plays the largest role, although there can occasionally be special circumstances. Since this is designed to be a simple example I am going to lump all the various adjustments that could be and call them the ‘seasonality factor’ since it is most usual and signficant.
Here is a chart showing the unadjusted and the adjusted numbers. As you can see, a seasonal adjustment can legitimately normalize the numbers for the use of planners and forecasters. This is a common function in businesses affected by seasonal changes. Year over year growth rates, rather than linear, comparisons, can also serve a similar function.
Quite a variance in numbers that are very large.
Since it probably is in the back of your mind, let’s address the infamous "Birth Deal Model" now, which I have advised may not be such a significant factor as you might imagine. This is an ‘estimate’ of new jobs created by small businesses. A comparison of the last few years demonstrates rather easily that this number is what is called ‘a plug.’
How can the growth of jobs from small business not been significantly impacted by one of the greatest financial collapses in modern economic history?
Certainly the Birth Death model offers room for statistical mischief. It is important to remember that it is added to the RAW number before seasonal adjustment, and that number has huge variances. So the effect of Birth Death is mitigated by the adjustment for seasonality. If it were added to the Seasonal number from which ‘headline growth’ is derived it would be a huge factor. But it is not the case, although the timing of the significant annual adjustments and additions is highly cynical, and supportive of number inflation.…
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Visualizing The Many Losers And Few Winners Among The 7.6 Million In Job Losses Since The Start Of The Recession
by ilene - September 3rd, 2010 6:09 pm
Visualizing The Many Losers And Few Winners Among The 7.6 Million In Job Losses Since The Start Of The Recession
Courtesy of Tyler Durden
Since the beginning of the recession/depression there have been over 7.6 million total job losses (not just private jobs, which is all that the government is suddenly focusing on. What next: emphasizing the dramatic surge in janitors and trash collectors?). So which occupations are the biggest winners and losers over the past 33 months? Curiously, the split in job losses is spread about evenly between manufacturing and service jobs; the top two biggest absolute losers are construction and manufacturing occupations. Things are not better in services either, as the bulk of professional segments have lost hundreds of thousands, with two exceptions: healthcare and education. Of course, the one sector that has never seen cumulative job losses in the recession is the government - for state and federal employees the recession has not only ended, but it never started.
Those who wish to see the carnage across various jobs over time can do so below at the following WSJ interactive chart.
h/t Nolsgrad
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Initial Jobless Claims Jump while Philly Fed Signals Economic Contraction
by ilene - August 19th, 2010 6:54 pm
Initial Jobless Claims Jump while Philly Fed Signals Economic Contraction
Courtesy of Rom Badilla, at Bondsquawk.com
The Philadelphia Federal Reserve released its manufacturing survey for August, which suggests economic contraction and may lead the Federal Reserve to promote additional stimulus measures. The Philadelphia Federal Reserve Outlook survey or simply “Philly Fed” for August plummets to a negative reading of 7.7 versus economists’ surveys of +7.0. This marks the third consecutive decline after the outlook survey peaked in May at 21.40.
Behind the headlines, components that represent economic growth were especially weak. Specifically, New Orders dropped further into negative territory to -7.1 from a prior month’s reading of -4.3. Inventories fell from +4.5 in July to -11.6 while the Number of Employees component dropped from 4.0 to an August reading of -2.7.
Inflation expectations should remain subdued and keep bond yields in check as price pressures fall, judging by some of the Philly Fed components. Prices Paid dropped from +13.1 in July to +11.8. In addition, the Prices Received component continues to drive deeper into negative territory. The Prices Received component fell to -12.5 following prints of -6.5 and -8.4 in June and July, respectively.
The Philadelphia Fed numbers carry significant weight since the index is heavily correlated to the ISM manufacturing index and the index of industrial production, which both measure the health of U.S. economic activity. ISM Manufacturing should it fall below 50 in the coming months may lead the Federal Reserve to act in providing stimulus measures via Quantitative Easing.
The number of people in the U.S. filing for employment benefits increased last week according to the Department of Labor. Initial Jobless Claims for the week ending August 14 jumped to 500k people. The number of people who recently became unemployed and are now accessing government benefits was revised upward in the previous week by four thousand to 488k. The increase, which the highest reading since November of 2009, highlights the beginning of deterioration of the employment landscape in the last few weeks as economists were expecting a reading of 478k. Furthermore, the 4-week moving average, which is used to smooth out volatility to establish a better reading of trends, continues to inch higher to 482,500 people and is on the higher end of the recent range of 450-500k that has been established since last November. With this in mind, the number is…
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Jobs Decrease by 125,000, Rise by 100,000 Excluding Census; Unemployment Rate Drops to 9.5%; A Look at the Details
by ilene - July 2nd, 2010 4:30 pm
Jobs Decrease by 125,000, Rise by 100,000 Excluding Census; Unemployment Rate Drops to 9.5%; A Look at the Details
This morning the BLS reported a decrease of 125,000 jobs. However, that reflects a decrease 225,000 temporary census workers. Last month there was an increase of 411,000 temporary census workers. Next month will also likely be negative due to the dismissal of more temporary workers.
Excluding the census effect, the economy added 100,000 jobs but interestingly 20,500 of them were private temporary jobs. Temporary jobs have become a way of life.
Excluding the census effect, government added 17,000 jobs. That is going to change in the coming months (possibly dramatically depending on Congressional stimulus actions) as states are forced to layoff workers for budgetary reasons.
That will be a good thing because Firing Public Union Workers Creates Jobs. Unfortunately, politicians and Keynesian clown economists will not see it that way.
Hidden beneath the surface the BLS Black Box – Birth Death Model added 145,000 jobs.
However, as I have pointed out many times before, the Birth/Death numbers cannot be subtracted straight up to get a raw number. It contributed to this month’s employment total for sure, but the BLS will not disclose by how much.
On the whole, this was an OK jobs report (depending on your expectations), yet perhaps as good as it gets for a while.
The unemployment rate dropped only because of a declining participation rate. Last month the number of unemployed was 15 million. This month it was 14.6 million. Clearly the economy did not add 400,000 jobs.
The drop in participation rate was not that surprising because (as I expected) some of the long-term unemployed stopped looking jobs, or opted for retirement.
Nonetheless, I still do not think the top in the unemployment rate is in and expect it may rise substantially later this year as the recovery heads into a coma and states are forced to cut back workers.
Employment and Recessions
Calculated risk has a great chart showing the effects of census hiring as well as the extremely weak hiring in this recovery.
click on chart for sharper image
The dotted lines tell the real story about how pathetic a jobs recovery this has been. Bear in mind it has taken $trillions in stimulus to produce this.
June 2010 Report
Please consider the Bureau of Labor Statistics…
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The Great Recession
by ilene - June 7th, 2010 1:29 pm
"WE STAND TODAY AT A CROSSROADS: ONE PATH LEADS TO DESPAIR AND UTTER HOPELESSNESS. THE OTHER LEADS TO TOTAL EXTINCTION. LET US HOPE WE HAVE THE WISDOM TO MAKE THE RIGHT CHOICE." WOODY ALLEN
The Great Recession
Courtesy of JESSE’S CAFÉ AMÉRICAIN
Employment figures clearly show that this is much more than a cyclical recession. It is the breaking of an historic credit bubble, made worse by the Fed’s policy responses and recommendations on banking regulation since 1994.
If you look closely at the chart below, you will see that if you subtract the temporary government hiring for the Census, there is no recovery in employment. It is flat. With all the trillions spent so far, why is there such a weak response?
You cannot kick start something with a quick blast of stimulus if it is still broken. So any stimulus to the economy or subsidies to the banks that are being applied are essentially wasted, until the system is significantly reformed and restructured. That is the problem.
Worse than wasted really, because it robs future governments of the ability to engage in constructive action. Like a third world country, the pigmen were the first to the trucks, with the help of corrupt politicians, and are stealing the aid intended for the public and have been hoarding it.
Stimulus. Reform. What we have seen so far from the Congress, the Fed, and Wall Street is simply white collar looting, and ironically in a crisis which they created.
And when the investigations and trials come later, which they will, watch how the pigmen claim complete ignorance of any wrongdoing even in their own companies or at most a few sincere errors in judgement, just like the CEO’s and bankers and the financiers have been doing already in front of the Congress and the FCIC.
Hyprocrites and liars playing the public, whom they secretly despise as their inferiors, for fools. This is the prevailing attitude in Washington, the mainstream media, and on Wall Street.
This excellent chart is from Calculated Risk.
Biting the hand that beats you dept:
“Many people believe Goldman Sachs, which goes around the Chinese market slurping gold and sucking silver, may have, using all kinds of deals, created even bigger losses for Chinese companies and investors than it did with its fraudulent actions in the US.” China Youth Daily
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The Economic Elite Vs. The People of the United States of America (I – III)
by ilene - April 24th, 2010 4:41 pm
Full Report: The Economic Elite Vs. The People of the United States of America (Parts I-III)
Courtesy of David DeGraw, AmpedStatus Report
This report was originally released as a six-part series. The first part was published on February 15, 2010. The last part was published on February 27, 2010.
- I: Casualties of Economic Terrorism, Surveying the Damage
- II: The Rise of the Economic Elite
- III: Exposing Our Enemy: Meet the Economic Elite
- IV: The Financial Coup d’Etat
- V: Overcoming the Divide and Conquer Strategy
- VI: How to Fight Back and Win: Common Ground Issues That Must Be Won
> Download full report with graphics and links.
> Download printer-friendly version.
but the success of its disappearing act depends on equally strenuous efforts
on the part of an American public anxious to believe in egalitarian fictions
and unwilling to see what is hidden in plain sight.”
– Michael Lind, To Have and to Have Not
It’s time for 99% of Americans to mobilize and aggressively move on common sense political reforms.
Yes, of course, we all have very strong differences of opinion on many issues. However, like our Founding Fathers before us, we must put aside our differences and unite to fight a common enemy.
It has now become evident to a…
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70% Of The Elderly Aren’t Retiring Because They Can’t Afford To Anymore
by ilene - March 3rd, 2010 1:00 pm
Following up on our earlier article by Tom Lindmark, Can Americans Work Longer? While working longer has many positives on an individual basis, when jobs are scarce, there’s still the problem of more competition for fewer jobs. – Ilene
70% Of The Elderly Aren’t Retiring Because They Can’t Afford To Anymore
Courtesy of Vincent Fernando at Clusterstock/Business Insider
A new survey from Career Builder exposes what will be an increasingly common trend as America ages demographically — older workers are being forced to keep working and postpone retirement for financial reasons.
More than seven-in-ten (72 percent) workers over the age of 60 who said they are putting off their retirement are doing so because they can’t afford to retire financially, according to a new survey by CareerBuilder.
The good news is that many older workers are putting off retirement for positive reasons as well.
About 70% of workers delaying retirement said they are doing so partly because they enjoy their jobs according to CareerBuilder. Hence there are many Americans who are, yes, putting off retirement for financial reasons, but at the same time are pretty happy to do so since they enjoy working.
Such job satisfaction will become necessary for most young Americans, since fully supporting retirees from ~60 years onwards will be simply untenable as an increasing proportion of America becomes old due to demographic change and extended life expectancies. Already, in 2012 about 1 in 3 American workers will be over 50 years old according to The Economist.
Thus the financial crisis may have delivered an unwanted wake-up call. Americans will need to quickly learn how to work longer into their silver years.
Luckily, as the satisfaction rates in the survey above show, this situation might not be as bad as you’d expect. Let’s hope.
Read more on this trend at The Economist >
See Also:
ADP: January Job Losses Were Actually TRIPLE What We Thought, And No, We Won’t Blame The Snowicane
Here’s What Today’s ISM Number Suggests About Job Creation In February
BREAKING: Savers Still Don’t Make Jack
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Massive Layoffs Coming in NYC, Nevada, California, Colorado, Arizona, Everywhere
by ilene - February 1st, 2010 2:21 pm
Massive Layoffs Coming in NYC, Nevada, California, Colorado, Arizona, Everywhere
Cities, states, and municipalities are sinking by the minute. And unless unions agree to concessions (which they won’t) massive layoffs are coming everywhere you look. New York City is a prime example.
Please consider NYC May Lay Off 19,000 Workers If State Cuts Aid
New York City will have to lay off more than 10,000 public workers, in addition to 8,500 teachers, if the state legislature approves the $1.3 billion of cuts the governor proposed in his deficit-closing budget, Mayor Michael Bloomberg said on Monday.
The mayor, in a speech to the legislature, estimated 3,150 police officers would be cut, reducing the force’s "operational strength" to 1985 levels.
About 1,050 firefighters would have to be let go, along with 900 correctional officers, and the city would have to cut its daily inmate population by 1,900, he said. The number of at-risk children that service workers monitor would fall to 2,700 from 9,000, Bloomberg said.
The mayor, an independent, said Governor David Paterson’s budget "utterly fails the test of fairness." He told lawmakers: "You can’t lose control of the streets in terms of safety or cleanliness. You can’t lose control of the streets in terms of an ambulance or a firefighter showing up."
NYC mayor: State budget would force city layoffs
Check out the spin in this version of the same story: NYC mayor: State budget would force city layoffs
The proposed state budget would force thousands of layoffs and could reduce New York City police staffing to the level of 1985, before the city emerged as a terrorism target, Mayor Michael Bloomberg warned legislators Monday.
Gov. David Paterson’s proposed 2010-11 budget would cut $1.5 billion in funding to the city, Bloomberg said — forcing layoffs of 9 percent of the city’s police officers; layoffs of 1,050 firefighters and the closing of some firehouses; and 8,500 teachers as part of what Bloomberg says is a $500 million cut in school aid.
In addition, aid for other services such as soup kitchens, homeless shelters and transit cards for students will be sapped with no way for the city to make up the funding.
"This executive budget would have devastating effects on essential services in New York City," Bloomberg said.
Pointing The Finger
It appears mayor…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.