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I think it's much higher than what they are reporting. They leave out oil and food from the inflation numbers..what a joke as we can't survive without them. I wonder how they are fiddling with the unemployment numbers. And..notice they have adjusted both December and January's numbers upward ??
I don't understand why the high number was unexpected. The financial companies have been tanking since late last year and layed off thousands of workers. Builders stopped building and layed off thousands of constructions workers. Unlike the media and government, I EXPECTED to see a pretty high number of job losses showing up.
The problem is our debased currency, not "oil prices". The oil supply has not peaked yet, higher prices are due to the rapidly evaporating value of the dollar. The real disaster will come when the world's oil production peaks. Our taxes today are much higher than 40 years ago, when the US economy was still #1 in the world. Nowadays it's all debt, no real production. When the world gets tired of financing us, things will really melt down. We have replaced efficient private business with bloated, inefficient government. We are overtaxed, overregulated and emasculated. Without total constitutional reform, we are through. Hope everyone likes being a slave.
I totally agree, tallrick, except that I don't think we need constitutional reform. We just need to actually abide by the Constitution as it is written.
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Factories, construction companies, mortgage brokers, real-estate firms, retailers, temporary-help firms, child day-care providers, hotels, educational services, accounting firms and computer designers were among those shedding jobs. All those cuts swamped job gains at hospitals and other health care sites, bars and restaurants, legal services and the government.
I totally agree, tallrick, except that I don't think we need constitutional reform. We just need to actually abide by the Constitution as it is written.
That's what I meant! The reforms we need have to be Constitutional, or we're toast. The socialist programs, and banking cartels got us in to this mess, only the Constitution can get us out.
What do you mean "Depending on your definition"? There is a definition to the term recession ... it is two consecutive quarters of negative growth.
The problem is the data used to measure negative growth is often riddled with inaccuracies, exclusions, and corrections.
Data is only as good as how it is collected. Like the CPI, growth data often is sanitized or spun by government officials and the like for one purpose or another.
Looking around and collecting your own data it's pretty apparent that we have been in a downturn for quite awhile in terms of a wage recession and true growth.
The Real Estate boom artificially masqueraded as growth as consumers were "feeling" wealthier because of their belief in how much their housing "investment" had grown.
Like my stock portfolio at the end of October 2007 compared to today thus is not the case.
The insidious component that is not given enough attention is the HUGE decline in the value of the US dollar versus other major currencies. There has been a steady drop of over 6% per year over the past 5 years of the dollar versus the Euro. Wages have remained contained at less than 3% and real inflation has been much higher than 3% when you consider sharp increases in food, energy, health care, and educations costs.
The truth is that most Americans have been in a recession for the past several years. Opportunities for real growth will not be realized until we face the facts, address the problem, and get the American people and businesses on board. One chronic need is to reduce the federal debt by reducing the size of the federal government and returning greater control of issues such as education back to the states where they belong.
The BLS non-farms payroll report showed a loss of 63,000 jobs, which was considerably different than the positive 25,000 that the consensus expected. But the news is in the revisions. This month's report now shows 196,000 fewer jobs in the last three months than was originally predicted. But I predict that by next year the number for this February will be worse, for two reasons.
One, the BLS estimates that 135,000 jobs were created in their birth/death model. Remember, this is the "fudge factor" number to take care of jobs created by new and small businesses that are not part of the establishment survey. Because it is based on past performance, it tends to understate growth in employment when the economy is recovering from a recession, and overestimate it when the economy is going into a recession.
That 135,000 number includes an estimate of 9,000 new construction jobs and 10,000 new jobs in the financial world. It is far more likely these were negative numbers. Job loss will probably be revised to down over 100,000 by this time next year.
Remember, this is a survey of businesses. Once a year they look at actual data and revise the numbers from their original estimates. We will see the next annual revision March 11. It is likely to show further declines in employment in the last half of the year. But the BLS data is lagging. For instance, California does their own estimate of employment in their state. The data is basically one month "fresher" when it is released.
Let's take the estimate for the Riverside-San Bernadino area of California. The BLS estimated that there were 32,400 new jobs in December in the area. But California, with more thorough methodology, saw job losses totaling 10,100. BLS estimates 56,000 more total jobs than California does in that one area alone. The data is even more stark in the major metropolitan areas. Now, this will all get resolved over time with revisions, but it does distort the current data. (Thanks to John Burns Real Estate Consulting for giving me that data.)
2,500,000 "Lost Jobs" and Counting
The reality is that there were probably closer to 2,500,000 "lost jobs" in February. How so? The Liscio Report notes that:
"Net changes in total employment over time are a function of gross job losses and gains. For example, in 2006, there was a net gain of 1.7 million jobs in the private sector, according to the BED program. (This number differs from the establishment survey.) But
that net gain came from a gross gain of 30.8 million jobs, and gross losses of 29.1 million jobs. That's quite a furious pace of turnover under a rather placid surface."
If we take those losses for the year of 29.1 million and divide by 12 months, something like 2.5 million jobs were lost in an average month in 2006 (while 2.6 million jobs were found).
The Liscio Report goes on to show that total job turnover in the US was a remarkable 13.2% of the total labor market last year. But also, volatility is actually down from 15% in 2000. This demonstrates a remarkably robust employment marketplace, in which roughly 2.5 million people will change jobs in any given month. Granted, it is harder to find a job now than a year ago, but it helps to keep in mind that a lot of people are finding new jobs every month, even in a slowing economy. The economy is simply slowing down. It will not come to a halt.
As an aside, the unemployment rate dropped by 0.1%. How can it drop if we lost jobs? Basically, because the unemployment rate is estimated from a survey called the household survey. They literally call hundreds of thousands of homes and ask if anyone is working or looking for work. If you are not looking for work, then you are not counted as unemployed. This month the household survey showed a drop of 255,000 jobs (quite the difference from the headline survey); but an even larger number of people, 450,000, are not looking for a job, presumably because they do not expect to find one. So, even though fewer people are working, the data shows the unemployment rate falling. Go figure.
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I love how people call it two consecutive quarters of "negative growth." That ain't growth. It's called shrinking, and it's what the certain body part of all the Hummer drivers will be doing in the coming months.
Goldman Sachs is now looking for $200 oil which portends prices at the pump approaching 6-7 dollars. I'd hate to be commuting from the far outer suburbs.
Can we all finally agree that America IS going to go into recession.
I remember back on august people were saying it's only the housing market and some credit problems that won't effect us. Then in the fall as the credit crisis really got rolling and the FED was cutting rates. People started saying the economy was slowing but we wouldn't reach recession. Then by the new year I was hearing that yeah we may get a couple of slow quarters maybe even a quarter of negative growth but there would be no "official" recession.
So now after all the happy talk has fallen flat and now the labor market is starting to feel the hurt. Can we finally all agree.
No ... they won't agree because the first stages of any market crash, recession or whatever is ... repeated denial, denial, denial that it's actually happening.
Then, when they finally do acknowledge that there's a recession and everything is doom and gloom ... you and I will both know that we've finally turned the corner and things are on the upswing.
I have seen three recessions. The worst was under carter in the 70's. None of them were causeed by any of the presidents. It is funny becasue in the 60's when JFK was in office he cut taxes to stimulate the economy just as Bush did. The housing market and the spending of government and individauls seem to have started this downward trend. It's sad but the next person who gets elected may have their name attched to recession if there is one.Like evryhting some peo[ple hope against hope that electing the right person will solve their problems.Now we see even democrats cutting taxes by giving a refund to stimulate the econmy.
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