Wednesday, June 4, 2014

Longest Jobs Recovery On Record Since US Started Tracking Data In 1939, The Year Germany Invaded Austria; Suicide-In-Seattle

First, the background. When I first started following the unemployment numbers, I could never keep track of the magic numbers (see below). So, I posted the "magic numbers." They have come in very, very handy. The Obama administration moved the goal posts (not surprising) but I've kept the original numbers.

The Magic Numbers

The two key numbers:
  • First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
  • New jobs: 200,000 (< 200,000 new jobs: economic stagnation)
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters. That was when mainstream media moved the goal posts, the first time I noted that Reuters had changed the number -- and it was changed significantly.
I will stick with 200,000 (the "magic number" prior to the Obama administration) -- it's a nicer, "rounder" number to remember.

Over the two years that I had been posting these updates, it had become clear/obvious that the figures were often suspect, if not outright falsified. On November 18, 2013, it was reported that, indeed, unemployment figures have been falsified.
In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.
The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated.
And the Census Bureau, which does the unemployment survey, knew it.
 Take the numbers for what they are worth, I guess. Not much. As so much else with ObamaNation.


Today's ADP figure: 179,000 new jobs. Expectation: 210,000.

Analysis: lousy, lousy report.
How the press reported it:
How bad was it? Compare this to the report back in February when "everyone" (even CNBC) said 175,000 new jobs was a bad, bad, bad report (today's number was practically the very same number):
February 5, 2014: new jobs, 175,000 in January, 2014. Lousy report. Anything less than 200,000 = economic stagnation. Note: this is the ADP number for new PRIVATE jobs; I believe the government figures for ALL new jobs comes out at the end of the week; analysts are expecting a number of 190,000 which is less than the magic number of 200,000.
 Interestingly, there was no real analysis why US employers pulled back in May. Remember, for months now (actually, years), the AP and Reuters have been telling us the weekly first time claims report is evidence that employers are starting to hire more people. Inconvenient truth: not happening.

And this was in May. One can't blame it on the winter weather (oh, I suppose you can, and some will), but winter is over. Hellooooo. One could make the opposite argument; after the slowdown this past winter, employers should have been eager to get back on track. There should be a lot of pent-up demand. I guess that's what the analysts thought; they expected 210,000 new jobs. So, we got 179,000.

And it appears the mainstream media does not care.

CNBC is focused on what-they-call-the-break-even-point:
Set your sights on this number: 113,000.
That's how many jobs the U.S. economy needs to hit its break-even point, to finally recover all the jobs lost in the financial crisis.
Get ready, because we're about to get there this Friday.
That's when the U.S. Department of Labor will release its May jobs report, and the outlook is rosy. Economists surveyed by CNNMoney expect the U.S. economy added 200,000 jobs in May.
"The outlook is rosy." That's why the Dow is barely in the green today. LOL.

So, $1 trillion in stimulus (and the stimulus continues) and six years into the Obama recovery, we are at the break-even point. You have got to be kidding: CNBC thinks this is good. And folks listen to them for investment advice. Okaaaaaayyy.

Another inconvenient truth:
Breaking even is a key milestone, but was a long time coming. It took just two years to wipe out 8.7 million American jobs, but it took more than four years to recover them all, making this the longest jobs recovery on record since the Department of Labor started tracking the data in 1939.
Despite $16 trillion in debt, $1 trillion initially in stimulus. Or whatever it was. Maybe it was $2 trillion when you add in the printing of money since then. The numbers hardly matter any more, do they. 

The question needs to be asked: why did employers pull back on hiring in May, just when everyone thought we turned the corner?

When you are listening to the mainstream media talk about the break-even point this Friday, remember, in the past six years the US population has increased significantly, mostly due to illegal immigrants, I suppose. Even as the population is increasing, a smaller percentage of folks are actually finding jobs. The percentage of Americans in the labor force has decreased significantly under President Obama.

Suicide in Seattle

The $15/hour minimum wage approved by the Seattle city council continues to reverberate.

The Washington Post is reporting:
DRAKESBORO, Ky. — In the shadow of Paradise Fossil Plant’s aging smokestacks, where white steam and carbon dioxide rise into the sky, outdated coal-fired generators are being replaced with one that runs on natural gas.
The change in Muhlenberg County, once the nation’s top producer of coal, is emblematic of what’s been happening across the U.S. as natural gas becomes cheaper and electric utilities try to meet stiffer carbon emissions rules the Obama administration announced this week. When the $1 billion natural gas facility is finished in 2017, the Tennessee Valley Authority, the nation’s largest public utility, will shut down two coal-burning units at Paradise that date to the 1960s.
Randall Parham, who earns about $19 an hour working at the Paradise No. 9 mine, said new restrictions set forth by the White House on Monday could endanger the livelihood of many in Kentucky. The state is required to cut its carbon emissions by 18 percent by 2030.
Forget all the EPA stuff. We already know the proposed rules are DOA.

Did you see what I saw in that article?

I consider coal mining one of the most dangerous jobs in America. It is surely one of the most arduous. It may be one that is least glamorous. And look what coal miners get paid: $19/hour (before union dues). So, they probably make about ... drum roll... the same wage entry-level hamburger flippers now expect to earn in Seattle. 

Time to get back to the Bakken. Have a great day folks.

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