Unemployment :slashingtongue

Jobs report + analysis; Mixed news

Friday, February 5th, 2010 at 5:46 pm  
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Very bad news : We lost 4.8 million jobs in 2009; we lost 20 000 jobs in January and we have lost 8.4 million jobs since 2009, shed actually more since 2004. Good news : Government miscalculated job gains in November, we gained 64 000 jobs rather than the 4000 that was announced at first, and for the first time in nearly half a year, we have below 10% unemployment.

Unlike many other countries, the US, still has problems with unemployment despite having the third highest economic growth (of course India and China are better) amongst the most important economies in the world.

We are the biggest economy in the world. Some say Japan is the next biggest economy, some say China has overtaken it. Either way, our economy is bigger than both theirs combined. China grew by 10.7%, India grew by 7.5% last quarter; we grew by 5.7%. Like these countries, we should be gaining jobs.

Germany, France and the UK, all registered growth of a mere 0.1% – 0.5%. Shouldn’t these countries be the ones that are losing jobs? Why do they have very slight gains? Countries like Greece, Spain and Portugal are in crisis, and even so, they are not losing as many jobs as us (granted they are smaller than us, but we are not going through the crisis that they are going through).

Why? Why are we in this boat? Conservatives would blame left wing Keynesian economic and Liberals would blame President Bush. But so many of world’s economies are Keynesian, including China’s, why they growing? And didn’t all these countries exist when President Bush was around?

To get these answers we got to look back at the figures. Firstly, the reason for the spike in jobs in November is because of Christmas. What it suggests is that now more jobs are on temporary basis. There are about 50 000 more temporary jobs in January. Overtime has went up along with hours employed and average hourly earnings.

Whilst most would worry about the whopping nearly 80 000 jobs lost in the construction industry, I would rather focus on the shortage professionals. In the midst of so much bad economic news, why are we lacking thousands of professionals? Why can’t we create the skilled labor needed rather than having to rely on foreigners to gill in this gap? There are still large requirements in the field for IT, engineering and nursing.

In my opinion, this goes back to education. I really feel that our education system needs an overhaul. We are producing too little graduates and having too many high school dropouts. Our Colleges are the best, but not enough Americans are getting there.

President Obama has been too bothered about health care, which he has ultimately failed in delivering, to be bothered about issues such as immigration, education and the education. Does anyone here actually believe that the ACES bill would pass in the Senate? Please! This is one of the long term effects we are going to face in the future if we carry on with the status quo.

That being said, the President seems to want to throw the kitchen sink at the issue of jobs. E.g. He is right now wanting to build nuclear power plants and, very disappointingly, wanting to drill offshore for oil. So how many more promises is he going to break to whore out for jobs? Is he going to allow drilling oil in ANWR as well? Is he going to invade another country to keep people employed?

So to round up, we are having growth in economy and not jobs, because we have lost lots in construction and because we cannot take advantage of jobs that require professionals. Hopefully, all results, particularly manufacturing, carries the good trend.

Unemployment above 10%

Sunday, November 8th, 2009 at 6:30 am  
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Unemployment has soared to 10.2%. That is the highest in nearly 2 decades. What is so disappointing is that we are experiencing the steepest rates of job losses in the past few months in the midst of the GDP and the economy roaring back to health.

There are some good news. There are less unemployed college degree holders. That rate has dropped 0.2% to 4.7%. Management and professionals too experienced the largest job growth, from 5.2% – 4.7%.

However, the fact that these numbers are so small means that it does not impact the economy that much. It was ages ago when the unemployment rate was 4.7%, the rate of unemployed college degree holders. That is unnerving.

Now back to the bad news. Blue collared workers, those that work in production jobs and factories, rose to 14.5 %. That is a 0.4% jump and it is very high. Worst of the lot is the jobless rate for workers in construction, maintenance or natural resources industries. It shot up 1.2%, which is huge! It now stands at a whopping 15.5%.

To sum it all up : The sectors that are least affected are becoming better, while the sectors that are most affected are becoming worse. And the worse is getting worse faster than the better is getting better (a weird expression, I know).

Why? Is it because the college degree holders and people in management make up the GDP while the rest of the economy does not? I am not being populist here, I myself am a college degree holder. But if there are 10% of the population that does not have a job, how can it be good for the economy? That is 10% of the population contributing next to nothing on the demand, how can there be jobs which would be needed in supply? Can people out there please explain this to me?

This also goes back to the topic of the stimulus. Stimulus was meant to create or save jobs. Around $800 billion was set aside to create jobs in 2009 and 2010. But with 1/3 of it being tax cuts, it is ridiculous, that is only going to kick in next year. Less than half of the “non tax cut” cost has been spent. That would be up to around $300 billion. And so far that has saved 1 million jobs.

I think that a stimulus was necessary to save jobs, but the manner done was wrong. For one, I think that the tax cuts are a joke. Cutting taxes in the time of recession is okay, but it should not be costing us more than $200 billion. Cutting taxes when income is next to zero is like selling a catamaran at a discount in the ghetto. It really does not work.

Things should be concentrated on jobs. For one, rather than giving money to the states like what was done, they should have taken over the budget of policeman and / or firemen in the states. This would force state to cut non essential jobs like roadwork ones rather than the firemen and policemen that are essential. I think that we should have reworked the roads, rail networks and electrical grids, reeducate our teachers and get better support for our students.

I think that if the next quarter, the economy grows again but jobs are still being lost, I think that a study has to be demanded. We cannot go down that road at all.

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We are out of recession, but

Thursday, October 29th, 2009 at 6:09 pm  
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It was slightly higher than expected, and it is the first growth the GDP has seen since the third quarter 2008 which would make some term this news as an end of the recession. Others, who believe that the recession started in 4th quarter2007; would say that we need another quarter of growth to say that we would be out of recession. But the one question on our lips is : When is the jobs coming back?

This should be the best news for us to hear but for a long time, but please forgive us for not being so optimistic. President Obama should be hailed as a savior of the economy, but please for give us, President Obama, for we do not give a crap for “technical mumbo-jumbo”, till we see the jobs coming back! I think that people genuinely feel that this increase in GDP is just because of the “fat-cats making money” while we are still suffering.

That is not true. The main reason that we are having a good GDP result is because the personal consumption expenditures has increased by about the same amount GDP has. In other words, people are more confident in the economy now than they were three months ago. That was the biggest reason that the GDP grew.

There were still losses in Private domestic investment in non-residential structures, government investment and spending in local government and most importantly, personal disposable income. This GDP figure does show the fact that we hold about 3.5% less money now than we had it a few months ago.

So where is the positive news coming from? The following show a double digit quarter to quarter growth. Personal Domestic consumption of durable goods, residential, exports and imports. The double digit in growth shows that trade is back, but the sad thing is that our imports (16.4%) are increasing faster than our exports(14.7%).

I think that you may understand what I feel about the GDP by the second paragraph in this article. I see no point in the economy growing when the job indicators show no good results. I also think that it would be the reversal of the job loss rate that would be the correct indicator of growth. Let me put it in numbers. We have lost at least 8.5million jobs since the recession began. Until and when we put at least half of those lost jobs back, then and only then, we talk of recovery.

I feel rather angry about this. For example, when we exit a recession our number roared back to recovery with unemployment numbers increasing. Germany exited the recession with a growth rate of 0.3% but unemployment was down. France exited with a mere 0.2% growth but unemployment was down. Why are we bucking the trend?Why is the economy improving but the jobs are not coming back? Are we doing something very wrong or very right?

That being said, if President Obama really needs to have a pat on the back for the figures. He has lead the economy out in some manner. So I give credit where credit is due. I think that if this were the previous administration, they would be gloating about this and the President is not.

But the President is still under my sights for criticism. I do not care if the GDP shows a 20% growth in the fourth quarter; as long as the jobless numbers increases, you are failing! I would still give him time though.

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