On Friday, September 3, 2010 the U.S. Department of Labor, Bureau of Labor Statistics issued its report of the employment situation in the United States as of August 31, 2010. The posted unemployment rate in the US is now 9.6%, after holding at a steady 9.5% for the last two months. Although the private sector did add 67,000 new workers, these modest gains were offset by the fact that 114,000 temporary workers for the U.S. Census were laid off as they competed their work. This means a net loss of employment of 54,000 workers. This report further emphasizes that long term unemployment will be a fixture of the U.S. economy for months to come, further adding justification to the needs for an unemployment extension and a Tier 5.
Most economists agree that simply to keep up with new entrants to the work force, about 100,000 new jobs need to be generated every month. In August there was a decline of 54,000 jobs clearly demonstrating that recovery is a long way off.
Health care continued to add jobs (+28,000) in August, with employment increases in both ambulatory health care services and hospitals. Employment in mining (+8,000) also continued to expand, reflecting ongoing job gains in support activities for mining.
Temporary help services employment was up over the month (+17,000), following virtually no gain in July. Since September of last year, this industry has added 392,000 jobs.
Manufacturing employment fell by 27,000 over the month, mostly offsetting an increase in July.
In construction, employment was up by 19,000 in August; however, about half of the increase was due to the return of 10,000 workers to their jobs following a strike in July. On net, construction employment is about unchanged since March.
Employment probably cooled in August as slower economic growth caused some U.S. companies to lose confidence the recovery will be sustained, economists said after the release of the report according to Bloomberg..
“Companies are still absolutely devoted to cost control,” said Chris Low, chief economist at FTN Financial in New York told Bloomberg News “The labor market has just gotten worse, and is consistent with consumer spending that’s treading water.”
Almost every economist who studies the job market knows that this unemployment rate (usually called “the posted unemployment rate”) is not the full picture the BLS also reports what is called “the “Alternative Measurement of Employment which includes people that are not traditionally included in the posted rate, which relies heavily on those collecting unemployment. This Alternative measurement of employment includes the following: four broad categories.
- People who are currently collecting unemployment benefits, either the initial state level or under one of the federal extensions or EB. This is the basis of the “posted unemployment rate” and
- People who are not collecting unemployment but who want a job and are continuing to look for a job in a systematic and consistent way. Included in this group are people who once did collect unemployment insurance benefits but whom have exhausted all the weeks available to them (these are usually referred to as “marginally attached workers”) and
- People that are unemployed and want and are willing to work on either a full time or part time basis but have given up looking in a systematic or consistent way because they have become convinced – at least for the time being – that there is not job for them in their local job market (these are usually referred to as “discouraged workers”) or
- People who have had a record of employment but whose current economic situation, (either because they have exhausted available weeks of unemployment insurance benefits, or never got them in the first place) has deteriorated so badly that it is almost impossible for them to look for a job because they have experienced homelessness, loss of means of reliable transport for job interviews, or loss of telephone and internet access (two vital tools for job search in today’s marketplace.
When you combine all these figures together for the month of August, what many consider to be a much more accurate picture emerges. Although the posted rate of unemployment nationwide is 9.6% the Alternative Measurement of Employment for the United States is 16.7% unemployment over: 7% higher than the posted rate.
No one looking at this report can be convinced that the Summer of 2010, which most people consider to be unofficially ending on Labor Day this Monday has been the “Recovery Summer” that was loudly proclaimed in May by the Obama Administration.
The inevitable conclusion is that the economy is simply stalled. Consumers are not spending, companies are not seeing an increase in business, and thus cannot justify hiring. Later today, the President is expected to speak on the jobs report and as he has done in the past, most people are expecting him to emphasize the addition of 67,000 new jobs and proclaim that recovery is happening but not as fast as he would like. This report makes it hard to see that.
Sadly, this report should not come as a surprise. Many leading economists, including Mark Zandi, chief economist for Moody’s Inc. and one of the foremost experts on the relationship between the economy and employment late last week predicted this report with uncanny accuracy. He has also predicted a 10% unemployment rate by the beginning of next year if not sooner. This is not recovery. This is stagnation or even stalling.
Given these numbers, it is hard to see how anyone can continue to oppose extensions of unemployment and a Tier 5 for those that lost their job through no fault of their own.
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Michael
Very astute analysis. I would add what I find to be a very misleading statistic – the number of unemployed for 27 Weeks & over dropped from 6.572 million in July to 6.249 million in August or a net drop of 323,000 which sounds good but isn’t. The lion’s share of the 323,000 are certainly new 99ers starting a phase of life without unemployment benefits.
We can expect numbers like this every month going forward if jobs, jobs, jobs are not forthcoming quickly. Jobs peaked in November ’07 and a net loss of 7,233,000 jobs since bode a social disaster the likes of what we have not been seen since the Great Depression. Information is power, thanks for continuing to relay the severity of this critical problem.
Hi SJ
Thank you for your comment…..the fact is clear, we will have long term AND high uemployment for a long time to come. The figures are there for all who take the time to study them.
You may want to know that before leaving for Camp David for the Labor Day weekend the President did reassure America by telling us “I believe better days are ahead. Feeling reassured SJ?
Michael
I think I will take the time this Labor Day weekend to reflect upon the great courage and industriousness displayed by those who came before us that built this great country and remember why we can do it once again.
Happy Labor Day Michael!
It still comes down to the math after 2 years since summer 08 collapse caused so many jobs to be loss from Wallstreet greed. No matter how many tell 99ers they are lazy or should take lower paying jobs that us not why 99ers are growing. Its simple math. Not enough jobs are being created to help bring down unemployment. There are not enough to hire many of the unemployed at any level and hire all the new people not on unemployment and coming into the work force. People need to realize unemployed did not create this dire situation. Wallstreet and Congress did. How about we tax Wallstreet and make them pay for it. Why should Americans victims be told no money for them when we know we waste billions. Enough help Americans and stop the lying by Congress and still Wallstreet.
There is an obvious solution to this but it will not be popular.
We are in a deflationary cycle, meaning as the demand for commodities is less than it was, thus the price must come down.
Labor is a commodity. There is less demand therefore the price must come down to meet the lack of demand and you will see hiring increase albeit at a lower wage. There is one thing standing in the way of this. The minimum wage law. It is blocking the natural movement of the market and thus creating unemployment.
I am surprised not to see this address more. It really is very simple.
John
Actually your suggestion is popular and been suggested by others. It is neither original nor economically sound. I also point out that even though GDP is very weak at 1.6% it is still positive fow your premise that “we are in a deflationary cycle” is seriously flawed
If in fact as you suggest, the minimum wage law be abolished – thus erasing in one stroke over a century of worker protection laws – the could not be a corresponding decrease in the costs of living.
For example a person who, as an investment property a 2 apartment house. He or she has probably purchased the house via a mortgage and the rents are reflective of the need to service that mortgage. If in fact the abandonment of the minimum wage you so blithely suggest occurs, then that person would either have a hard time filling the apartments, thus being unable to meet the obligations incurred to purchase the property (leading to foreclosure) and/or no tenants at all.
Also you seem willing to hurl millions who lost their job through no fault of their own to poverty because of this shop worn and ill-conceived “proposal.” Shockingly insensitive and economic nonsense.
Such radical ideas are not the answer. Targeted tax credits, decrease of small business tax liabilities (albeit on a temporary basis) are probably the best way to deal with job creation, not the idea you seem to propose (rejected by almost every economist by the way, or both parties.)
No one, least of all I as a person who works as a volunteer in advocacy efforts for the unemployed believe that unemployment insurance is the final answer. It is, however a compassionate way to deal with those that lost their job through no fault of their own. Abandoning the minimum wage as you seem to think is a perfect answer is neither compassionate nor even marginally acquainted with reality.
I am not sure what your agenda is but it is definitely not to reduce the unemployment rate, I suspect it may be somewhat darker.
None of what you said negates the facts that I laid out about the market. It is very simple; if something is not selling that was selling before IT IS PRICED TOO HIGH. Yes there are complications with this but it is REALITY. Yes prices are coming down on everything from lawn mowers to housing.
You are not dealing with reality.
And, Mr. Sensitive, it will be seen in time whose idea is more “insensitive”, my money is on yours. It appears for the time being that you are getting your way until the burden becomes too great and then reality will force itself on all.
You are entitled to your own opinion but not your own facts. You will exclude your ideas from the attention of anyone that is serious if you don’t address the facts. There is no way to defy logic, not even for a liberal.
WHOSE JOB IS IT, ANYWAY?
From Ann Landers Column, Chicago Tribune, January 10,1997
This is a story about four people named Everybody,
Somebody, Anybody, and Nobody. There was an important job to be done and Everybody was sure Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody’s job. Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.
Discussion of ideas apparently is not something that you are prepared to do. You replied to NONE of my point, only provided personal insult
Clearly I made a mistake in replying to you – I assure you it shall not be repeated
SJ
My comments were directed to John not you
“…the facts that I laid out about the market. It is very simple; if something is not selling that was selling before IT IS PRICED TOO HIGH…”
There is this possibility, but at this point of time, have you ever considered the fact that it could be that its because PEOPLE DON’T HAVE THE MONEY (any money!) TO BUY? Oh, that’s right, I forgot, your life has been good and you are still living in “lalaland”…just like Fox’s Beck. That explains…Sorry for you. Need help finding the yellow brick road, friend?
Mary, I think your response was the most straight forward. You asked what happens when no one has any money. The fact is that there is still a large percentage of the population that has jobs and some money.
In a free market those people can then use the money that they do have to purchase commodities that they see valuable, thereby getting the money flowing.
If the minimum wage law was done away with this money could be flowing into the pocket of the “99ers”.
The best of luck to us all.
You sound like that other person commenting here about lowering the standard of living.
Cut from the same cloth maybe ?
You people have no idea what working for 25 cents is like.
My relatives grew up during the Depression and people worked many different jobs, bartered and helped our neighbors.
You people whine, accuse and post the same foolishness that is hurting this country. If that is your intention, then get the hell out !
America, love it or leave.
And what fool wants to lower the standard of living !.
Of course, unless you’d like your boss to pay you less.
What nonsense !
I think we should go to the white house and kick some fat old lady economist in the ass, fire all these old over paid bastards that have made me lose my home, and dunk Obama in a can of red paint
Whats gong to happen at the end of the year when all U.I. will be just about gone. will the walls come tumbling down? Something is going to happen. I don’t know what but there will be a lot of people with no means of support..
Stay tuned. we’ll see it….
“…The fact is that there is still a large percentage of the population that has jobs and some money. ”
Thanks for the very elloquent opinion to my comment John but, here is the reality: A very large percentage of this large percentage of people is actually being very cautious due to the course the economy (National and global) is heading into, and they are re-learning the old art of being frugal. They are NOT buying. Anything. They are cutting on unecessary (dine outs, vacations, rolex watches, impulsive investments,etc…)expenses. The best they can. This very large awaken percentage of the large percentage of people that still have jobs have the money but at the same time do not have it because they are not spending it unless for basics and other related items. They know that they, too, anyone, can also end up losing their jobs, businesses and investments anytime, and sometimes with no warning, as nothing is showing signs of near future security. We are in very turbulent times so turbulent and confusing that not even the “Master of Positiveness” Tony Robbins is being able to find words to describe the contrary. So it ends up that “people with “no money” to buy” makes the biggest portion of the American population at this point of time.
Michael has presented an article that states the facts about the state of the unemployment crisis in America today and he draws the conclusion that a Tier 5 extension is an appropriate course of action at this point in time. He also asserts that tax breaks for small businesses are appropriate. I agree. Senator Debbie Stabenow and her 11 co-sponsors of the Americans Want to Work Act (S.3706) agree by offering a bill that provides a Tier 5 unemployment insurance extension and tax credits for businesses that hire the long term unemployed. It is a proposed short term solution to the problem that we are facing today.
A rough estimation of the cost to provide 20 weeks of a Tier 5 to approximately 2.155+ million 99ers would be roughly $14 billion. Spreading the cost of this over the 139.250 million people that are currently fortunate enough to still have a job would put the cost to each of them at $0.71 a day. I am reminded of the old Great Depression song “Brother can you spare a dime”. In 2010 values, we are talking about singing the same song for the 99ers today.
I ask this sincere question to conservatives, independents, and liberals alike. Is it not in our best interest to provide less than the cost of a cup of coffee to our neighbors and fellow citizens in support every day? I know we have our differences on how federal monies are spent but do not confuse the cost of war or pork with the cost of helping your fellow man during these desperate times. A $1 in the hands of the unemployed produces $1.65 in consumer activity. This is a small way to help jump start the economy and do the right thing at the same time.
At the end of the day, if I want to be able to look at myself in the mirror and like who I see, I say the 71 cents is well spent! I can respect the fact that $0.71 is just too much for some of you, not in cost, but in principle, and that just makes me sad. Are you at least willing to embrace the fact that you are definitely in the minority? That most American’s feel otherwise? That’s not me talking, it the polls!
Please pause to reflect upon and consider the evidence that Michael has presented here. There is much, much more at stake than 71 cents a day.
What The Frick, Are they gunna help us 99ers or what, Like 4 people got stabbed and robbed around my house, I though i live or lived in a safe community but i guess you never know what can happen when people need to fight to survive!
All 99ers need some means of help, Whats taken sooooooo long…
Because of the poor state of the economy and the President’s numbers going down faster than a duck in winter, the Republican’s look set to win 50 more seats in the House.
Democrats will offer another year of tax cuts for the rich, if the Republican’s will sign off on an extra 20 weeks extension.
Strap in folks, we are approaching some dark days ahead, as the Republican’s throw us all under the bus !
I STILL THINK THAT THEY ARE MAKING PEOPLE THINK ”NO MORE UNEMPLOYMENT” WATCH HOW FAST THEY GET JOBS……. ITS LIKE A TOUGH LOVE TACTIC……. THINK ABOUT IT……………… DO YOU REALLY THINK AFTER NOVEMBER 30 NOTHING IS GOING TO HAPPEN WHEN MILLIONS OF PEOPLE WILL BE OFF UNEMPLOYMENT….WITH MILLIONS TO FOLLOW WEEK AFTER WEEK……. IMPOSSIBLE THEY WILL GIVE A TIER 5 ITS COMMON SENSE…….. ITS A TOUGH LOVE GAME THE GOVERMENT IS PLAYING……….DEEP DOWN THEY KNOW BIGGER PROBLEMS ARE COMMING WHEN MILLIONS OF PEOPLE HAVE NO MONEY……..JUST THINK ABOUT IT……AND REMEMBER THESE WORDS AFTER TIER 5 PASSES…..
Jack I think you have it right this time. Its a game being played at our expense. The GOP may be alot of things but brain dead they are not. They will gain the house and most likely the senate in November and then the monkey is on the backs of the GOP watch how fast an extension gets done if they don’t and try to say NO to this it will be the kiss of death for them in January. You can not win an election with 30 million people in trouble as we are. Its coming just going to be in the first week of November because that is just two months before the kick off for president in 2012 and those who will be in power do not want that hanging over their head.
I am just waiting for our government to say. “Let them eat cake” I know that extending unemployment can come back on our children later, but if you don’t do it our children will die to not eating and having a roof over their heads now. Wake up government not helping today will not help tomorrow.
I despair – I hope you are right, and that the GOP is playing a “shell Game’ … but I’m disgusted that they are playing us, in this political game, it shouldn’t be the case in the worse rescessioon/depression since 1929.
Shame on the GOP and the lack-luster Dems !