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And the Occasional Truth Gets Spoken

6:12 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

Every now and then, I seem to run across news articles and/or headlines that seem to be just a bit of an understatement even as they are quite factual. Usually it seems, we get things like this one from NBC News yesterday:

New jobless claims take surprise jump

New claims for unemployment benefits took an unexpected jump in the latest week, raising more concerns about the struggling job market and providing further incentive for the Federal Reserve to jump in and help the economy.

As I have written before, it surely does seem as if the economist are ALWAYS surprised. Which still makes me wonder how they manage to keep their jobs as in most career fields, if you are always surprised by what happens, pretty soon you’re looking for a new career.

A couple of days ago, I saw this piece from Alison Linn at the Today show with the headline:

Many in middle class say they are doing worse financially

The Great Recession and weak recovery have left slightly fewer Americans feeling like they are part of the middle class, and many who do still identify themselves as such say they are now worse off.

A new and comprehensive survey on how the middle class feels, released Wednesday by Pew Research Center, finds 42 percent of people who identify themselves as middle class say they are in worse shape financially than before the recession began. About 32 percent are in better shape, and the rest either don’t know or see no difference.

I am part of that 42% though in fact, I have been forced to accept that by income, I am no longer remotely close to “middle class.” I am poor.

NBC News had this piece last night that is very much a companion to the Linn piece:

Stronger economy delivers smaller paystubs for most of us
With recoveries like this one, who needs recessions?

The average household income has fallen steadily for nearly everyone since the start of the economic expansion in June 2009, with average income dropping 4.8 percent in the three years since the upturn began, according to a report released Thursday.

High unemployment, outsourcing of jobs and generally slow economic growth have restrained income for households during one of the weakest and most prolonged recoveries on record, according to the report from Sentier Research.

Last summer, I wrote this post about the interconnectedness of the global economy. Today, the NY Times has this article on how China is now having to deal with surplus inventory:

GUANGZHOU, China — After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.

The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

This actually does make me wonder how long this headline from CNN will be true:

Romney: ‘Big businesses are doing fine’

It is a global economy and eventually what happens to one piece of that global economy WILL trickle down to the rest of the globe. Meanwhile we get to see pics of Prince Harry acting like a single, 27 year-old man visiting Las Vegas.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor

Sorry, but these numbers do not add up

12:14 pm in Uncategorized by dakine01

All These Numbers Do Not Add Up (Photo: worldbank, flickr)

All These Numbers Do Not Add Up (Photo: worldbank, flickr)

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So, you may have noticed that the November jobs report from the Bureau of Labor Statistics is out today (via CNN):

Hiring accelerated in November, and the unemployment rate unexpectedly plummeted to its lowest rate in nearly three years. 

Employers added 120,000 jobs in November, the Labor Department reported Friday, marking a pick-up in hiring from October.

Meanwhile, the unemployment rate fell to 8.6%, the lowest rate since March 2009 and a significant decline from 9% just a month before.

Sounds great, right? Well not so fast there Bunky (from the NY Times): Read the rest of this entry →

Officially, It Will Be a Double-Dip

9:21 am in Uncategorized by dakine01

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

When I was a kid, I used to love double-dips. I’d go to the doctor and afterwards, we’d stop by the drug store soda fountain for my free ice cream. Summers, there would be all the ice cream suppers at the churches with fresh home made ice cream and cake. Double-dips of chocolate ice cream and cake!

Unfortunately however, today’s double-dip will be a recession. Yes, there it is; I’m predicting that we will officially fall back into a recession in the very near future even though for the 25M to 30M long term un and underemployed, we’ve never, ever left the recession that began officially back in December ’07 and ended officially in June ’09. I do so very much hope that I am wrong on this but will even go so far as to act like an economist and claim to be surprised if I am wrong.

What makes me think this will happen? Well, to start with, too many folks like The Benbernank in his speech last Tuesday in Atlanta and the presidents of the Philadelphia and New York Federal Reserve Banks all saying the economy will improve in the second half of 2011. In addition, Bloomberg has a survey of economists claiming this as well:

After growing at a 2.3 percent annual pace this quarter, the world’s largest economy will expand at a 3.2 percent rate from July through December, according to the median forecast of 67 economists polled from June 1 to June 8.

Rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events like poor weather and the disaster in Japan, economists said. Nonetheless, the current slackening means Federal Reserve policy makers will wait even longer to raise interest rates next year, the survey shows.

The reality is, the corporations have been holding those record levels of cash for over a year now (via WSJ). They have used the money to buy back stocks or to invest in equipment (NY Times). Another reality is there are always “one-time events.” This year it is earthquakes/tsunamis/nuclear melt-downs in Japan and tornadoes in Alabama and Missouri combined with floods along the Mississippi and Missouri Rivers and wildfires in Texas and Arizona. This past winter, it was record blizzards. Later this summer it will be hurricanes in some areas and droughts in others. All “one-time events.”

BlackRock Investment Management CEO Laurence Fink is predicting that the US economy will lag the global economy for the next five to ten years. CNN says it will be because of household debt. My guess is that it won’t be helped by the Japanese economy contracting 3.5% in the first quarter, Australia adding fewer jobs than predicted (economists surprised!), Spain making unilateral moves (via NY Times) that go against the wishes of businesses and labor that no one thinks will work.

Nouriel Roubini is predicting that the Chinese economy will have a “hard landing” in 2013. (Side note: I had to laugh at Roubini’s wiki page):

In 2008, Fortune magazine wrote, “In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he’s a sage”.[1]

I find it interesting that if you check the link at the footnote on the Roubini wiki page and scroll through the “8 who saw the financial crisis coming and the 8 who didn’t,” the “8 who didn’t…” are the ones still being quoted all the time. So much for Roubini becoming a “sage” instead of a Cassandra.

As always, we are not helped when we see Dana Milbank proclaiming that Austan Goolsbee leaving means President Obama is losing a “voice of reason.” That is the same Goolsbee who just last week was bragging about 1M private sector jobs having been created while ignoring the hundreds of thousands of public sector jobs lost.

Nor are we helped when the President goes on his weekly radio address and announces (via AFP):

“Now, government is not — and should not be — the main engine of job-creation in this country. That’s the role of the private sector, ” the president said in his weekly radio and Internet address.

“But one thing government can do is partner with the private sector to make sure that every worker has the necessary skills for the jobs they?re applying for,” Obama added.

As I noted in this post from Thursday, Dean Baker has already written the rebuttal to the “necessary skills” argument.

Reuters noted in their article on the weekly address that:

President Barack Obama, seeking to ease voters’ concerns about his handling of the U.S. economy, said on Saturday a meeting with his jobs council next week would focus on possible further steps to boost hiring in the short term.

That would be the “Jobs Council” of Outsourcers and Masters of the Universe.

Just think, now Reuters has a headline that starting tomorrow (Monday June 13), they will offer a column from Larry Summers on the “jobs crisis.”

I keep wondering how The Onion manages to write their stuff with all the competition from reality.

And because I can:

Cross posted from Just A Small Town Country Boy

Jobs: The Spin Continues

11:41 am in Financial Crisis, Government, Media by dakine01

A lot of spin but no more actual jobs. (photo: Robert Couse-Baker via Flickr)

Well the December Jobs and Jobless reports are coming in and while there’s still the big one from the US DoL’s Bureau of Labor Statistics due tomorrow (Friday, 1/7/11), we can already see the spinmeisters in operation.

First off is the monthly report from ADP that is released on the first Wednesday of each month (yesterday) detailing the job growth or shrinkage in private sector employment for the previous month. Via McClatchy:

WASHINGTON — Private businesses hired new workers at a surprisingly energetic pace in December, according to a widely tracked job-tracking report released on Wednesday.

The ADP National Employment Report showed that private-sector employment rose by 297,000 in December. That’s the highest monthly gain since the report’s inception in 2000, and it’s double or triple what was expected by mainstream economists.

Most important, job gains that high are what’s needed to knock down the stubbornly high unemployment rate, which has been stuck at just under 10 percent for more than a year. Currently it’s at 9.8 percent, with a new official BLS report on December employment due on Friday.

Now, if we can have another four plus years of similar growth, we might make a dent on the current Unemployment rate of 9.8%. But you will pardon me if I’m a bit skeptical about this wonderful news. December is a time when there are a lot of short term hires due to the holiday season. I assume that ADP does make some adjustment for the seasonal factor and while 297K new jobs is definitely a good start, as I (and others) have noted recently, even if those jobs are something more than short term, minimum wage positions for the holidays, the odds are good that a lot of them are of the Perma-Temp fashion, with limited to no benefits. So I guess I’m going to hold off on the cheerleading the report.   . . . Read the rest of this entry →

They Really Are Insane, Part II

11:17 am in Uncategorized by dakine01

It gets somewhat frustrating to read the cheerleader stories on the economy, or from the supposed economic experts on the same day and in the same paper where there are other stories plumbing the economic problems of average, everyday, yes, real Americans.

First off, we have the somewhat ludicrous cheerleader opinion piece from Treasury Secretary Tim Geithner in today’s (Tuesday August 3) NY Times titled Welcome to the Recovery. It’s impossible for me to pull out a couple of points of idiocy from this piece as almost every line of it is a misdirection, strawman, or flat out untruth.

From there, we go to this piece discussing a speech Monday by Fed Chair Ben Bernanke:

While the United States has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Mr. Bernanke said on Monday in a speech in Charleston, S.C. “We are maintaining strong monetary policy support for the recovery,” he said in response to an audience question, without discussing any further action the Fed could take to aid growth.

The remarks signal that Mr. Bernanke and his colleagues, when they meet in Washington next week, will stop short of making major changes in their policy statement or taking new steps to lower interest rates and reduce unemployment, said John Ryding, a former Fed researcher. Consumer spending, which accounts for about 70 percent of the economy, “seems likely to pick up in coming quarters from its recent modest pace,” Mr. Bernanke said.

Yeah, who cares about nearly 10% official Unemployment and the Un/Underemployment nearly double that? David Dayen had a post at FireDogLake yesterday on a Krugman column on how this is the "New Normal" for employment. Looks like Krugman is correct (not that that is a shock mind you.)

These speeches and such are contrasted by this story in today’s Times on "99ers."

In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics. Not all of them received unemployment benefits, but for many of those who did, the modest payments were a lifeline that enabled them to maintain at least a veneer of normalcy, keeping a roof over their heads, putting gas in their cars, paying electric and phone bills.

I’m one of those "99ers." I was laid off in April ’04, a few months before my 52nd birthday. I exhausted my unemployment benefits and used up my retirement plans. As I’ve said before, the only consolation in that is knowing that even with paying early cash out penalties, I still got to use more of it on myself than those who watched their plans swirl down the toilet in the Crash of Too Big To Fail.

An Economix blog post in today’s Times offers some discussion on why "laypeople" think the Great Recession is still ongoing. Using Alan Greenspan’s analysis from Sunday’s Meet the Press(!) to explain:

MR. ALAN GREENSPAN: …I think we’re in a pause in a recovery, a modest recovery. But a pause in the modest recovery feels like quasi recession. Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the — and everyone’s pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy.

We truly are in Bizarro World when Greenspan seems to have the best handle on the problems being felt by those of us who refuse to give up our job searches no matter how much the cheerleaders want us to just accept the status quo.

And because I can:

Cross posted from Just A Small Town Country Boy

The Future of Social Services During an Economic Crisis

7:24 am in Uncategorized by dakine01

So it begins. The news articles are coming more frequently on the impact of social service cuts due to budget shortfalls. Christy did a couple of posts December 31 and January 1 on Mortgaging The Nations Future: Child Poverty and Abuse On the Rise. Besides her links in these posts, we will be seeing stories like this one from the Denver Post: Denver Child Agency Hires Stall:

Faced with a possible $29 million deficit by 2010, leaders of Denver’s Department of Human Services may renege on their commitment to boost the number of caseworkers who protect children from abuse.

Last year, the agency asked the Denver City Council to authorize the hiring of an additional 38 child- protection workers, saying doing so was needed to stem a growing controversy over the deaths of children who were killed by caregivers after being seen by caseworkers and left in abusive homes.

Now the agency says attrition has reduced the child welfare staff to where it was before that commitment was made.

Of course, the agency is trying to put a best-face on this but the reality is, every social service agency is under-funded. We just do not really pay attention Read the rest of this entry →

I Am Unemployed but Not a Statistic

9:35 am in Uncategorized by dakine01

I am unemployed but my joblessness is most likely not reflected in today’s (January 9, 2009) release of Jobs figures showing a rate of 7.2%.

I was laid off from my then employer in mid-April 2004 and have been mostly unemployed since that time. (I’ve had a few small consulting/accounting type positions but nothing long term or well paying by any stretch.)

I am fifty-six years old and my chosen career field is Software Quality Assurance and Testing. Do I have holes in my skill-set? Yes, I do. I am not a programmer and have very limited experience with automated testing. To be honest, I don’t believe automated testing is all that effective as it does not seem to catch the real-world problems where a web site hangs or a window doesn’t open in a timely fashion.

But I’m not really after the reasons why I’m still looking. I just want to point out that I am most likely not counted in today’s statistics. My Unemployment Compensation ran out in early 2005. I still go through the attempts to find employment. I submit my resume to jobs that I’m qualified for but for whatever Read the rest of this entry →