May 2014 Jobs Reports: Good News, Bad News

According to this article this morning from CNNMoney, the official BLS Jobs Report for May, due this Friday morning, will show that the US economy will finally have recovered all the jobs lost in the Great Recession:

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.

I guess that's the good news. But as the article also notes, it is a purely symbolic measure:

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.

Plus, the jobs that have returned are not necessarily the same ones we lost, nor are they in the same regions.

Here's the key - through all these four plus years of job growth to get back to where we were at the start of the Great Recession, we have been falling behind as it takes roughly 90,000 new jobs each month just to keep up with the new people entering the job market each month. If we take it back to the beginning of the Great Recession in December 2007, we are still in the hole on needed jobs by a bit over 7M (6.5 (years) x 12 (months per year) x 90K (jobs per month) = 7,020,000.)

The current month report from ADP continues the good news/bad news. The good news is 179K new jobs in the private sector (though fewer than "economists predicted.") The bad news (although painted as good news by Reuters):

U.S. companies hired far fewer workers than expected in May, but an acceleration in services sector growth supported views the economy was regaining strength after sagging early this year.

While other data on Wednesday showed the trade deficit hit its widest point in two years in April, a rise in imports to record highs underscored the economy's resilience.

Why is the increase in service sector jobs bad news? Because service sector jobs tend to be lower wage.

This blog post from the Washington Post's Wonkblog from 8/31/2012 covers this:

The United States lost about 8.1 million jobs after the recession began in late 2007. The economy has since recovered about 3.3 million of those jobs, starting in early 2010. That, in itself, should alarm policymakers. The labor market is still in a deep, deep hole.

But in some respects, the situation is even bleaker than that. The types of jobs that have come back so far don't seem to be paying as well as those that were lost.

A new report (pdf) from the National Employment Law Project finds that low-wage jobs, paying $13.83 per hour or less, have dominated the recovery to date. In many cases, they appear to be replacing higher-paying jobs that were lost in the first place.

That article was not the first time the Post had noticed the low wage aspect of the "recovery" as I noted in this blog post from April 2011.

The CNN article linked at the top of the page also showed a little "moving of the goalposts" in the world of economic and jobs reporting. Buried way down at the bottom of the page were these two paragraphs:

Back in 2006 and 2007, the unemployment rate hovered between 4% and 5%, but that work level was associated with an overheating housing market. Aiming for that rate may not be an achievable goal now, as baby boomers retire and some of the long-term unemployed may be permanently out of work.

Instead, economists surveyed by CNNMoney now define "full employment" in the economy as an unemployment rate at 5.5%. At that level, there's still normal turnover in the job market, which is considered healthy. The unemployment rate was 6.3% as of April, and economists expect it could take at least two years to get to 5.5%.

The official "unemployment rate" is already a fiction as it does not account for the long term underemployed, those who are "self-employed contractors" and the people who have given up looking for work. It does show how bad things are though that the economists feel the need to redefine "full employment" while recognizing that we are still a couple of years away from achieving even this revised figure.

As Bloomberg was reporting on the trade gap in April hitting the highest point in two years, Reuters was reporting that WalMart is once again trying to push "American Made." Not surprisingly, it is not going to happen easily:

When Walmart pledged last year to buy an extra $250 billion in U.S.-made goods over the next decade, it appeared to be just what was needed to help move America's putative manufacturing renaissance from rhetoric to reality.

But suppliers trying to reshore production as part of the initiative by the world's largest retailer are running into practical problems as they try to restart long-idled corners of U.S. manufacturing.

Companies that make the leap have to grapple with a host of challenges, including a shallow pool of component suppliers, an inexperienced workforce, and other shortcomings that developed during the country's long industrial decline.

It is not at all a surprise that there are these types of problems. As the article further notes:

Now, the retailer is asking companies to come back home - though they need little prompting. The forces pulling production back to the United States are powerful and real and include lower domestic energy prices, increasingly competitive wage rates, the benefits of greater automation, and a renewed appreciation for the value of being able to respond quickly to shifting U.S. customer demands.

My bold. "Increasingly competitive wage rates" = squeeze salaries down to as close to minimum wage as possible.

CNNMoney headline that 6 in 10 Say American Dream Is Unreachable is not a surprise at all.

And because I can:

Now isn't that con-vee-nient?

Oops.

So much for the monthly Jobs Report. One of the effects of the government shutdown (no Fox News, it is NOT a "slimdown") is no monthly Jobs Report from the Bureau of Labor Statistics. The BLS web site has a "Special Notice":

This website is currently not being updated due to the suspension of Federal government services. The last update to the site was Monday, September 30. During the shutdown period BLS will not collect data, issue reports, or respond to public inquiries. Updates to the site will start again when the Federal government resumes operations. Revised schedules will be issued as they become available.

Quite convenient for those members of Congress who deem most of us as not worthy of worrying about, yet manage to whine about how they need their pay check to get by - as if the 800K federal employees don't need theirs!

ADP did release their monthly report on private sector jobs on Wednesday, showing an increase of 166K in the private sector (and of course economists surprised as the number was lower than "expected"). The Wall St Journal looked at the numbers in a bit of detail (you can reach behind the WSJ Paywall by Googling the article title "U.S. Businesses Add 166,000 Jobs, ADP Report Shows"). The numbers that jumped out at me are:

Service-sector jobs increased by 147,000 last month, while the factory sector added a slim 1,000 new positions. Financial services cut 4,000 jobs.

Despite September's gain, job growth is weakening. Over the three months through September, the economy added an average of 162,000 private jobs per month, down from 220,000 at the start of the year, according to ADP.

Service sector jobs increase by 147K and manufacturing increases by 1K. It's a McJobs economy!

Business Insider offers us a listing of "what we know" even without the BLS figures. Of course, they base this to a large extent on "market economists' expectations" (see above link to previous blog post about "Economists surprised").

Bloomberg tells us that economists will just talk about football:

The absence of jobs data leaves economists and their investor clients without the month’s most important numbers on which to place bets, ranging from friendly office pools to million-dollar wagers on the health of the world’s largest economy.

Meanwhile, Reuters tells us Workers and employers face off at U.S. Supreme Court:

(Reuters) - Workplace disputes pepper the docket of cases the U.S. Supreme Court will take up during a nine-month term starting on Monday, with the justices having delivered a string of victories to businesses and employers in their last term.

Organized labor will feature in two of the cases. In one, an employee seeks to limit the power of public-sector unions to collect dues. In the other, an employee aims to limit the ability of private-sector unions to sign up members.

It would constitute a significant blow to the labor movement were the court, split 5-4 between Republican and Democratic presidential appointees, to rule against the unions in both cases, legal experts say.

Since the composition of the SCOTUS has not changed in the past few months, I am not going to hold my breath on workers getting any breaks from this court. In June, Businessweek declared the current court as Corporate America's Employees of the Month. It is not a stretch, it is not a difficult prediction to say more 5 - 4 decisions, more rulings in favor of our corporate overlords are coming in the next few months.

I bet Lloyd Blankfein will go to sleep at night dreaming of the wage slaves he can continue to abuse.

And because I can:

August 2013 Jobs Report: "Good" News That Isn't

Well the August Jobs Reports are in, and, as usual, the numbers were not as expected. From Reuters:

U.S. employers hired fewer workers than expected in August and the jobless rate hit a 4-1/2 year low as Americans gave up the search for work, complicating the Federal Reserve's decision on whether to scale back its massive monetary stimulus this month.

Nonfarm payrolls increased by 169,000 jobs last month, the Labor Department said on Friday, falling short of the 180,000 Wall Street had expected and adding to signs that economic growth may have slowed a bit in the third quarter.

CNN points out that the growth for June and July was revised downwards by 74K jobs but they also highlighted:

Meanwhile, the unemployment rate fell to 7.3%, but the decline came for the wrong reasons, as 312,000 people dropped out of the labor force. Only 63.2% of Americans now participate in the labor force -- meaning they have a job or are looking for one. That's the lowest rate since August 1978.

My bold

Reuters also notes the drop in participation in the workforce in a sidebar article here:

The share of Americans aged 25 to 54 who had jobs or were looking for work dipped to 81 percent in August, the lowest level since 1984, a time when fewer women were in the workforce. In another worrisome sign, the share of these prime-age workers who actually had jobs has stagnated at around 76 percent since early last year, well below its 2003-2007 average of around 79 percent.

Most of the reports in TradMed outlets have also commented on the impact of the (lack of) jobs reports on the Federal Reserve "stimulus" (from McClatchy):

The Fed has been purchasing, at a pace of $85 billion a month, government and mortgage bonds in a bid to drive down lending rates in the economy and force risk taking by investors. They must seek better returns than they have been getting on bonds, thus juicing the stock market and commodities such as crude oil and a range of farm products. Fed Chairman Ben Bernanke, who is concluding his term, wants to begin weaning the economy off of this support before his successor takes over.

Of course, this "stimulus" has not really helped the millions of long term un and underemployed, even though a large part of the Federal Reserve "mission" is maximizing employment.

The stock market continues to show its disconnect with most of the economy as it has gone up in response to the jobs report number (via Bloomberg):

U.S. stocks rose to a two-week high as slower-than-forecast jobs growth eased concern about reductions in Federal Reserve stimulus, overshadowing an escalation in tension between America and Russia over Syria.

So, because the Fed may not be able to stop its "stimulus" (read: easy money for the banksters and Wall St), stocks are going up in celebration. Yeah, that makes sense. After all, the casinos always like to show their appreciation for the marks customers.

Bloomberg has an opinion piece up by a Justin Wolfers, who says to concentrate on the revisions. Of course, he also seems to think public sector jobs are not "real" jobs when it comes to the economy:

There is one further detail worth emphasizing. While there were 74,000 jobs revised away this month, more than half were in the public sector, suggesting that we shouldn't be too hasty in marking down expectations of ongoing private-sector employment growth.

Now, I am one of those who refuses to give up my search for full time employment, preferably in my chosen field of Software Quality Assurance. I am a stubborn SoB and even when I keep receiving discouraging results, I will not fold. I'm sure many people would claim that I am being unrealistic in my desires to find work in my field. But am I any more unrealistic than the CEO of Morgan Stanley who declares:

...there’s almost no chance of another financial crisis like the one that endangered his firm five years ago.

Am I any more unrealistic than Cass Sunstein who sings the praises of a recently deceased economist who:

... has also helped reorient thinking about regulation in general, in part by emphasizing the importance of private flexibility, cost-benefit balancing, and careful, dogma-free empirical analysis (for which Coase made many pleas).

Ah, good ol' "cost-benefit balancing." Make the earth uninhabitable, pay a "cost-of-doing-budiness" slap on the wrist fine and everybody's happy, right?

I have a headache from the stupid we ALL display. It's just that some folks' stupid has a wider audience than others and their wrongness impacts millions whereas my stupid affects me and my cat.

And because I can:

The Concern Trolls Very Serious People Are Out

Damn but just when I reach a point where I think things can't get any stoopider inside the Beltway, we have a week like this one with the release of President Obama's "budget" and once again the reality of stoopid is even worse than imagined.

Word leaked last Friday (April 5) that Chained CPI was going to be part of President Obama's budget, prompting me to point out a simple truth, "A Bad Idea Is a Bad Idea, No Matter Who Proposes It." Of course, starting Monday, all the usual suspects and even a few somewhat surprising suspects started pushing the idea as a wonderful thing, maybe even as good as sliced bread.

The first cheers I saw, came from the Wall Street Journal. It is difficult to detail all the errors in this piece but it starts with the idea that Social Security has any bearing on the Budget in the first place the goes on to "explain" why Chained CPI is just such a good idea:

The chain-weighted CPI registers slower inflation than the usual CPI because it allows for the substitution effect of price changes. When the cost of one item rises, consumers switch to a similar product that has not risen in price (or not increased as much). The substitution can occur intra-item (whole wheat bread instead of white bread) and inter-item (beer versus wine). The chained CPI takes the shifts into its calculation; the traditional CPI does not.

Of course, these types of discussions never point out how the folks who are already "substituting" are supposed to pay for price increases, just as it fails to recognize the basic facts of Social Security, including the fact that the average monthly benefit is $1,264 per month, which is barely more than a minimum wage job pays and we all know how richly you can live on minimum wage. (Yes, that's snark.)

The Washington Post also is on the bandwagon and loving them some Chained CPI, once again pretending that Social Security is a part of the overall Federal Budget:

Most important, the president committed himself in writing to more than $100 billion in Social Security spending restraint over the next decade, along with $400 billion in health program reductions.

Ruth Marcus yesterday earned her WaPo0 money by being oh so very concerned with how the Republicans react to the President:

The conundrum of President Obama’s budget is that he has produced a “come let us reason together” proposal aimed at a Republican Party that has demonstrated no interest in being reasonable.

On Tuesday, Jared Bernstein of the Center on Budget and Policy Priorities wrote a blog post comparing Paul Ryan's "budget" with the President's by stating that if Ryan's budget is (self-described) as visionary, then the president's is "strategic." Bernstein quotes his colleague, Robert Greenstein (President of CBPP) who produced a statement in favor of President Obama's budget, and specifically, in favor of Chained CPI.

I can't begin to detail all the errors in Greenstein's statement but will try to address the most egregious ones. First off:

As it stands, the package makes tough policy choices while largely adhering to the principle, as enunciated by the Bowles-Simpson commission, that deficit reduction should not increase poverty or inequality. Nevertheless, the budget’s substantial spending cuts, both in entitlements and discretionary programs, would have real-world consequences for millions of individuals and families.

While there was a Bowles-Simpson commission, there was nothing "enunciated" by the commission as there was no report since the recommendations could not achieve the necessary vote count to be accepted as official. And once again, we have someone who should know better (and most likely does) trying to conflate Social Security as part of the overall Federal Budget.

Then there's:

Experts widely regard the chained CPI as a more accurate measure of inflation for the population as a whole. It may well be, however, less accurate for elderly individuals and many low-income people and, thus, understate the inflation that they face.

What experts are saying this? The best I have found is that the NY Times had an article claiming this that they would later correct as Dean Baker points out here.

Reuters presents it as The Grand Bargain while the Christian Science Monitor presents it as a great idea because liberals are angry so that must mean it is bi-partisnay or something.

Tiger Beat On the Potomac (h/t Mr Pierce) of all people, actually gets to the nut in their lede:

President Barack Obama says he’ll protect the most vulnerable seniors from his “chained CPI” proposal – but he’s not going to protect everyone. Not even all seniors.

The White House, fighting back against liberal critics who say he’s giving away too much, released details Wednesday of the protections Obama would include to make sure older seniors and low-income people don’t get hurt by lower benefits.

There it is. As I said the other day and will say many more times I'm sure, IF YOU HAVE TO MAKE SPECIAL PROVISIONS TO ASSURE PEOPLE ARE NOT HURT, YOU ARE DOING IT WRONG.

Such a simple damn concept. But of course, with all the people doing the cheerleading, none of them are people who actually have to live on Social Security so for them, it is only an intellectual exercise, not reality.

And because I can:

Are BRICS Agreements Signal of the Future Downfall of US Hegemony?

As I was looking through various news web sites this morning, I saw a couple of articles about agreements among BRICS (Brazil, Russia. India, China, and South Africa.) Specifically, these were economics related articles that may presage some quite different times for the US in dealing with the rest of the worldwide economic environment.

The first article was a short report from Reuters India that I found through twitter with a headline "China, Brazil sign trade, currency deal ahead of BRICS summit" and the lede:

BRICS members China and Brazil agreed on Tuesday to trade in their own currencies the equivalent of up to $30 billion per year, moving to take almost half of their trade exchanges out of the U.S. dollar zone.

The second article was from Bloomberg with the headline "BRICS Nations Plan New Bank to Bypass World Bank, IMF" and the lede:

The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund.

The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.

Now, I am not an economist (quite thankfully,) I don't play one on TV, and I did not stay at a Holiday Inn Express last night. But I think that both of these actions will have far-reaching ramifications for the US and Europe. Taken individually, I think each of these articles are very big deals for international trade and US and European economies. Together, I think they represent a warning shot across the bows of Western Economic Hegemony. I think these nations are going to be competing with the World Bank and IMF very shortly and may well offer an alternative to the forced austerity. I think the situation on Cyprus could play out much differently if the Cypriots had an alternative to the Euro Finance Ministers requirements for a bailout.

We should all stay tuned to further developments as we continue to live the ancient (maybe not) Chinese curse, "May you live in interesting times."

And because I can:

Final Pre-election Jobs Reports

This week has seen the final jobs reports that will be available to make a possibly measurable impact prior to November 6. Wednesday's report from ADP had 162K new private sector jobs. Yesterday's (Thursday, October 4) Jobless claims report had a slight increase to 367K new jobless claims and 4 week rolling average of 375K new claims. Finally, today's (Friday, October 5) Bureau of Labor Statistics report has an increase of 114,000 jobs for September and the jobless rate falling to 7.8%.

It seems the fall in the overall unemployment rate has some folks on the right, led by Neutron Jack Welch, claiming the numbers have been cooked. David Dayen at FDL News puts it this way:

Because data is just fungible to the political leanings of whoever confronts it, we predictably saw a number of conservatives question today’s jobs report, suggesting that the Bureau of Labor Statistics fudged the data to help the President’s re-election campaign. Leading this charge was former GE CEO Jack Welch on Twitter. I think the government should make a deal with Welch – they’ll admit to massaging the data if he cleans up all the PCBs in the Hudson River personally.

On a more serious note, this is really pretty outrageous, and Labor Secretary Hilda Solis, whose department includes the BLS, is right to be insulted. The BLS is a civil service agency that until recently was still run by a Bush appointee. It now has a career bureaucrat in charge. The political team plays no role whatsoever in the derivation of or announcement of the jobs data. And if, despite all this, BLS cooked the books, they’re terrible at it, because they shifted the data in the household survey without corresponding in the establishment survey.

My WAG on this is that the adjustment of the number of jobs for July and August probably had as much affect on the September jobless rate as the actual numbers for September. As far as I can see, this opinion piece from Jay Schalin at Fox News pretty much covers the basic point of the "unemployment" figures:

One thing the current economic slump has made painfully clear is that the unemployment rate is an imperfect tool for gauging the health of the economy. Washington should replace it with a more meaningful and useful benchmark: the labor-force participation rate.

The widely publicized unemployment rate, eagerly awaited each month by pundits and policy wonks, has become little more than a shell game in which officials keep the public guessing about the real state of the economy.

Please do go and read the entire piece, he makes some excellent points.

One item that I find still glaringly obvious is that for the most part, most of the people in charge or talking about jobs and the economy have no more clue about what is happening than they do about what the surface of the moon feels like. Just the past few days, I have seen these headlines as I have surfed the toobz (links embedded in headlines):

"Fiscal cliff" fears may impede faster job growth (Reuters October 2)

'Discouraged' workers face tough road back to employment (NBC News, October 4)

S&P 500 on verge of 5-year high day ahead of jobs data (Reuters October 4)

S&P 500 dips after four days of gains; earnings eyed (Reuters October 5)

I think the bottom line point here is any attempt to tie jobs reports, favorable or unfavorable, to the stock market is attempting so much witch craft. There IS no connection or the stock market would not be trading. As Reuters reported back in August, the market is up for the Obama administration by 74% since he took office January 2009:

At 1,400, the S&P 500 on Friday was closing in on a four-year high and was up 74 percent since January 20, 2009, the day Obama took office. Not since Dwight Eisenhower's first term has a president had such a strong run for their first term.

As most folks reading this know, I am and have been among the long term un/underemployed. The reality for me and many millions of others is, we want to work in decent paying jobs, preferably in our chosen career fields. The dithering in DeeCee from both sides of the aisle, the constant calls for cuts to the budget, "Grand Bargains" to "save" Social Security, Medicare, and Medicaid (especially the non-existent "Bowles-Simpson" plan since there was no formal report and plan adopted by their namesake committee) personally drives me nuckin' futz. As Mr Pierce often says, "Fck the deficit. People got no jobs. People got no money."

It really is a simple concept. People want to work. We want to work at decent paying jobs with half way decent benefits and contribute to the overall commonweal of the nation. Working two or three part time barely above minimum wage jobs does NOT fit this definition.

And because I can:

Where has the Federal Reserve been?

As many folks know, I spend a bit of time each day perusing various news sites. My postings have been light the past few weeks and months as I've been working through issues after my sister's death. More recently in the last week I've gotten a small piece of good news in my personal life (and not saying anything further as I try to nurture this news and make it grow - but it's not a job) as well as further bad news for my extended family, so the roller coaster ride does continue.

But then I go and see a headline like this at NBCNews.com:

Fed ready to help economy 'fairly soon,' minutes show

Turns out, the article was from Reuters though their headline wasn't much better:

Fed looks set to ease fairly soon barring swift rebound

Earth to Fed! Earth to Fed! Where in the holy hell have you been for these past few years?

(Reuters) - The Federal Reserve is likely to deliver another round of monetary stimulus "fairly soon" unless the economy improves considerably, minutes released on Wednesday from the U.S. central bank's August meeting suggested.

While the meeting was held before a recent improvement in economic data, including a stronger-than-expected July reading for U.S. employment, policymakers were pretty categorical about their dissatisfaction with the current outlook.

...snip...

The Fed held policy steady at that gathering, but signaled a renewed readiness to act amid lingering softness in the economy. The minutes showed the central bank is actively considering a "flexible" bond-buying program, which could suggest that no upfront amount will be announced.

Let's see. The "official" time frame for the Great Recession had a start in December 2007 and ended officially in June 2009. Last June I wrote a blog post where I predicted a double-dip recession. Officially, I was mistaken as the economy has managed to maintain just enough headway to avoid the term "recession." But also last summer, I wrote a blog post asking Mr Bernanke just where the hell he has been these past few years. I and all the other people in long term un and underemployed situations have the same concerns. We want jobs. The Fed still has a "Mission Statement" that begins with direction for "...pursuit of maximum employment..." So we sit here with the official unemployment rate at 8.3% and the rate of un and underemployeds at 15%. These number still translate to nearly 13 million unemployed and another 10 to 15 million underemployed. And again, these numbers do NOT include new college grads trying to find their first full time jobs in their chosen fields. The numbers do NOT include all the millions who have been forced to become "self-employed, independent contractors. Add these groups into the official numbers and we are probably looking at (as a guesstimate) another 10 to 15 million people. Labor force participation was at 63.7%.

But have no fear! All is not lost. Why just today, one of Willard Mitt Romney's top economic advisers proclaimed that The Benbernank is doing a smash up job as Fed chair and deserves to remain in the position while the Republican Party has added a plank calling for an annual audit of the Fed. My guess is this is the sop to Ron Paul. And to be honest, I can see this is a good plank. Of course, we still have the Todd Akin Memorial Anti-Abortion Plank Human Life Amendment so some things never change. After all, one of the reasons the Republicans re-took the US House in 2010 was because of the lack of jobs. Yet from the very start, the House concentrated on anti-abortion legislation that included "re-defining rape."

Todd Akin isn't an aberration in today's Republican Party. He is the epitome of today's Republican Party and Paul Ryan is right there with him. Meanwhile, the denizens of the Beltway wonder what all the fuss is about with jobs and millions of un and underemployed people wonder how they will survive.

And because I can:

Just how bad must wages and benefits be for most people?

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In my post from a couple of days ago, I linked to and quoted from this from Yahoo quoting former Labor Secretary Robert Reich:

In addition, while the economy has been expanding for nearly three years and hiring is picking up, Reich notes, "we also see some major declines in terms of median wage. And that's particularly true for the bottom 90 percent."

In the past, economists argued that wage growth lagged in part because employers were spending more on benefits like health care and pensions. But that hasn't been the case in the past few years. A recently released study from the National Institute for Health Care Reform shows that in 2010, the percentage of Americans with insurance who got insurance from employers fell to 53.5 percent, down sharply from 63.6 percent in 2007. "At the top of the talent chain, employers are providing very generous health insurance, deferred compensation, and everything you can imagine," notes Reich. "But as you go down the job ladder, particularly to people who are doing routine jobs, they're getting less and less. There has been a substantial erosion of health care benefits for the bottom 90 percent.

As I surfed the various news sites this morning though, I did find a couple of articles pointing out that some groups are still seeing their salaries and benefits go up, so all is not lost.

In the "No CEOs Left Behind" category, we have this article from today's (April 4) USA Today, "CEO pay soars while workers' pay stalls":

At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.

Two years of scaling back amid tough economic times proved temporary as three-quarters of CEOs got raises in 2010 — and, in many cases, the increases were substantial.

This blog post from Reuters written by a corporate board member points out a few of the problems with executive pay:

There are several factors at play as the remunerations committee and the board as a whole try to weave together pay packages.

Compensation consultants.
...snip...
Personal feelings.
...snip...
A disconnect from today’s reality.
...snip...
A lack of direct accountability.

I especially like that third point. A disconnect from today's reality indeed. And speaking of disconnects from today's reality, we have this from Bloomberg today on rising Wall Street salaries for most:

Most Wall Street (S5FINL) employees got higher salaries in 2011, with the biggest bumps going to those at boutique banks and alternative asset managers, according to a survey by eFinancialCareers.com.

The online survey of 2,860 financial professionals found that 54 percent received salary increases -- excluding bonus -- and 40 percent reported no change from 2010, according to an e- mailed description of the survey’s findings. Workers at so- called bulge-bracket banks got an average increase of 3 percent, compared with a 14 percent gain for people at boutique banks and a 13 percent raise for those at fund managers.

When year-end bonuses were included, average pay last year fell for workers at companies including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM)’s investment bank amid declining revenue. As year-end bonuses dropped, some banks raised base salaries that in past years contributed just a fraction of pay for senior employees.

But no matter what happens, we can be assured that Jamie Dimon will find something to whine about. Why just this morning, the Commodities Futures Trading Commission has fined JPMorgan the astronomical sum of $20M to settle charges related to the Lehman Brothers bankruptcy. TWENTY MILLION DOLLARS! (/Dr Evil voice) Why based on JPMorgan's reported profit from 2011 of $19B, that's a whopping .1%. By my rough math, that is less than a half day's worth of profits.

And because I can:

How does an interconnected global economy avoid a global recession?

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.

As I was surfing through various news sites this morning (April 2), I noticed a number of articles discussing problems with the European and US economies which lead directly to the question I have posed in the title of this post:

How does an interconnected global economy avoid a global recession?

Unfortunately, I do not know the answer but if I had to guess, it would be to say "It can't."

The first article I noticed was from tha AP via Yahoo titled, "Euro unemployment spikes to record 10.8 percent." Reuters reported it as "Euro zone unemployment reaches near 15 year high":

Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year.

Joblessness in the 17-nation currency zone rose to 10.8 percent - in line with a Reuters poll of economists - and 0.1 points worse than in January, Eurostat said on Monday.

Economists are divided over the wisdom of European governments' drive to bring down fiscal deficits so aggressively as economic troubles hit tax revenues, consumers' spending power and business confidence which collapsed late last year.

As a companion to these was this blog post from Reuters on youth unemployment across Europe:

In Spain the number of under 24-year-olds out of work is 50 percent, in Italy nearly a third of young people are without a job and in France the figure is a quarter.

However, in Germany youth unemployment is expected to sink to record lows over the coming months and is currently well below 8 percent.

...snip...

So what is Germany doing right and can Spain learn a few lessons? In an article written for the Centre for European Reform, John Springford lays the problem out clearly. In EU countries where rates of unemployment are high levels of participation in higher education and vocational studies is approximately 40 percent. In Germany, Norway, the Netherlands, Denmark and Finland, where youth unemployment is fairly low, rates are closer to 60 percent in some cases.

But it is not just high unemployment in general and among the young in particular that is problematic. Today's NY Times had this article on the swelling ranks of the working poor in Europe:

Europe’s long-running euro crisis may be cooling. But the economic distress it has left in its wake is pushing a rising tide of workers into precarious straits in France and across the European Union. Today, hundreds of thousands of people are living in campgrounds, vehicles and cheap hotel rooms. Millions more are sharing space with relatives, unable to afford the basic costs of living.

These people are the extreme edge of Europe’s working poor: a growing slice of the population that is slipping through Europe’s long-vaunted social safety net. Many, particularly the young, are trapped in low-paying or temporary jobs that are replacing permanent ones destroyed in Europe’s economic downturn.

Now, economists, European officials and social watchdog groups are warning that the situation is set to worsen. As European governments respond to the crisis by pushing for deep spending cuts to close budget gaps and greater flexibility in their work forces, “the population of working poor will explode,” said Jean-Paul Fitoussi, an economics professor at L’Institut d’Études Politiques in Paris.

Meanwhile in the US, there was this post from Yahoo:

In addition, while the economy has been expanding for nearly three years and hiring is picking up, Reich notes, "we also see some major declines in terms of median wage. And that's particularly true for the bottom 90 percent."

In the past, economists argued that wage growth lagged in part because employers were spending more on benefits like health care and pensions. But that hasn't been the case in the past few years. A recently released study from the National Institute for Health Care Reform shows that in 2010, the percentage of Americans with insurance who got insurance from employers fell to 53.5 percent, down sharply from 63.6 percent in 2007. "At the top of the talent chain, employers are providing very generous health insurance, deferred compensation, and everything you can imagine," notes Reich. "But as you go down the job ladder, particularly to people who are doing routine jobs, they're getting less and less. There has been a substantial erosion of health care benefits for the bottom 90 percent.

David Dayen at FDL News points out that "Austerity doesn't work." Austerity in Europe squeezes the 90%, throws more people into unemployment and creates more working poor. The same thing in the US. In an interconnected global economy, how can we not have a global recession when seemingly the entire industrial world is being squeezed.

And because I can:

Is the Greece Crisis a Preview of Coming Attractions?

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Let me start this by stating right up front that I do not pay near enough attention to happenings around the world and the Greek debt crisis is just one of those issues that I am aware of without really knowing all the ins and outs of the situation.

Nevertheless, I saw a headline this weekend that has me in full on WTF mode. Saturday morning a NY Times headline said "Greek Premier Faces Impasse Over Demand to Cut Private Wages.":

ATHENS — Lucas Papademos faced his most difficult test as Greece’s interim prime minister on Friday when his three-month-old government reached an impasse over proposed demands by the country’s foreign lenders to reduce private-sector wages drastically in exchange for the aid the country needs to prevent default.

Now, I can understand why lenders would demand wage cuts for Public Sector employees. I can think it is incredibly stupid, short-sighted, and penalizing the wrong group of people but I can understand the logic behind it. But Euro zone leaders and banks requiring private sector wage cuts before restructuring debt for Greece just makes no sense at all.

A bit further down in the article though I do get a small hint here:

It was unclear exactly what sort of wage cuts the troika was demanding. Some news reports said the lenders were seeking changes that would reduce most private-sector salaries by as much as 25 percent; others said the group was insisting on a cut in the minimum wage that, at least directly, would affect fewer than 300,000 people.

The goal of any pay cuts would be to help make Greek workers, who are generally less productive than workers elsewhere in Europe, able to compete more effectively inside the euro zone, where countries share a common currency that does not allow devaluations to help even out differences in labor costs.

My bold. And I think that is the goal right there. Cut minimum wage. Even though (assuming this wiki is correct), the Greek minimum wage works out to roughly $11,454 per annum (compared to the US minimum wage which works to $15,080 per annum - $7.25 per hour x 40 hour week x 52 weeks).

Today, I saw this article from the Wall Street Journal (if the article does not come through completely, check Der Google for the headline "UPDATE:Greece Close To Announcing 20% Cut In Minimum Wages-Sources" to get the full article):

Pressure on Greece has been piling up from its euro-zone partners to accept a new round of painful austerity if the country is to get a EUR130 billion bailout loan that will keep the country from defaulting next month when EUR14.4 billion in bonds have to be redeemed.

Germany and France urged Greek leaders on Monday to "live up to their responsibilities" by agreeing to the new cutbacks.

...snip...

Demands for cuts to the country's public-sector payroll were also on the table. The international creditors have asked for job cuts in the police and the armed forces, and there are even proposals to lay off teachers who work on temporary contracts, as part of the targeted 150,000 civil servants whose jobs will have to be eliminated by 2015.

Reuters reported the issue this way:

In Brussels, the European Commission defended the troika's demand for a cut in the minimum wage.

Commission spokesman Amadeu Altafaj said the Greek minimum wage averaged 871 euros a month, compared with 748 euros in Spain, which is not under an EU/IMF rescue program, and 566 euros in Portugal, which has received a bailout.

So apparently, the whole point is to drive wages of Greeks to as low as the lowest other nations in the Euro. David Dayen at FDL News put it this way earlier today with the headline "Greece Asked to Destroy Itself In Exchange for Bailout":

Greek bailout talks have deadlocked again, but at the moment the culprit is not the hedge funds seeking a higher payout on the distressed debt they bought, but the “troika” of the EU, ECB and the IMF. They gave Greece a Monday deadline to accept bailout terms. And those terms, frankly, are totally insane.

The deal calls for Greece to run a primary budget surplus (not counting interest payments on debt) in 2013 of over 2% of GDP, rising to over 4% by 2014. That implies massive cuts to public spending in the middle of a 5-year recession, if not a depression. As Antonis Samaras, leader of the New Democracy Party, told the Financial Times, “They’re asking for more recession than the country can take.” Samaras also has highlighted that the troika seeks cuts in private sector wages as part of the deal, of up to 25%. There would also be a 35% cut in supplementary pensions.

If Greece fails to agree to this today, the troika will likely suspend debt payments, forcing the country into default. European leaders said explicitly that they would not fund a continuing bailout unless Greece agreed to the troika’s demands.

This is where the tin foil comes into play for me. The "Preview of Coming Attractions" is telling me that if/when the Greek minimum wage gets pushed down, it will intensify the push here in the US to lower the minimum wage. Even if it is almost impossible to make it on a minimum wage as it is, it won't stop those who push this level of gibberish.

But hey, doG forbid, any banksters get a smaller than expected bonus. Why that truly is a sign of the coming apocalypse.

And because I can:

I really do want to believe in the economy...

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In the coming up on two years that I have been writing about the economy, jobs, un and underemployment at this little corner of the Intertoobz, I've tried to admit when my predictions have been a bit off. Like here and here where last summer I predicted we would be in a double-dip recession by the end of 2011. While we didn't fall back into recession on the time frame I envisioned, I still see it as quite possible.

I do hope I get to admit being wrong on that. I so very much want to believe the economy is really improving and the jobs picture will brighten but I just can't shake the feeling that it is all smoke and mirrors.

Today, (Thursday, January 19), the report of Initial Jobless Claims for last week came out and once again, the economists are surprised. Via Bloomberg:

Claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008, Labor Department figures showed today in Washington. The median forecast of 41 economists in a Bloomberg News survey projected 384,000. A Labor Department spokesman said the decrease reflected volatility seen during this time of year. The four-week average, which smoothes out fluctuations, decreased to 379,000 last week from 382,500.

...snip...

Jobless claims were projected to decrease from 399,000 initially reported for the prior week, according to the Bloomberg survey. Estimates ranged from 363,000 to 405,000. The Labor Department revised the previous week’s figure up to 402,000.

I am not at all surprised that last week's figures were revised upwards as that is the pattern over hte last few months at least. I did not make an official prediction but will admit that I thought this week's number would be back well above 400K. Once again, I do prefer to be wrong on these.

But then I see articles across the Toobz like this from Tuesday from US News (via Yahoo) with the headline "Are We Entering a Jobless Recovery?" and I just want to weep at the incredible combination of stoopid and duplicity to that gives us such a headline. The Great Recession/Lesser Depression is supposed to have ended in June 2009 so we are 2 1/2 years into a "recovery" and US News is just now questioning that it may be jobless?

But there is a downside to the Fed's favorable report and the good news on Wall Street. While the economy is growing, few new jobs are being created. The unemployment rate fell from 9.4 percent in December 2010 to 8.5 percent in December 2011. But without more dramatic job growth, low-skilled workers and the long-term unemployed will continue to have a hard time finding a job.

Economists now fear that the United States is entering what is known as a "jobless recovery," an economic recovery in which few new jobs are created. If economic expansion continues without adding a significant number of jobs, many unemployed workers will simply be left behind with few job prospects.

Unfortunately, the article doesn't get much better as it goes on to lay out standard "Gee, all you need is new training and education for the miracle to occur" when in fact, one of the groups hardest hit has been new college graduates from '08 - '11. Of course, if all we needed were training and skills to take all these jobs that are available, sure seems as if salaries would be rising in those areas with the needed new skills but that has not been happening.

Also from Tuesday was this piece from Reuters:

More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.

In an ominous sign for America's economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

Some policymakers worry that a recent spike in credit card usage could mean that people, many of whom are struggling on incomes that have lagged inflation, are taking out new debt just to meet the costs of day-to-day living.

American households "have been spending recently in a way that did not seem in line with income growth. So somehow they've been doing that through perhaps additional credit card usage," Chicago Federal Reserve President Charles Evans said on Friday.

With all due respect to Reuters and the author(s) of this "Insight" piece, this should not be a surprise. We have record people on Unemployment for long term, unemployment that averages $330 per week across the country, people who have exhausted all levels of unemployment compensation yet still have rent or mortgages, utilities bills, and the need to keep themselves and their families alive. Do you have a better option?

Today, Alison Lin at MSNBC was a little closer to reality with this:

The sudden loss of a job has become, if not commonplace over the last years, at least not very surprising.

And yet, many Americans remain unprepared for not having an income. A new survey from Country Financial finds that one-third of Americans would immediately fall behind on their bills if they lost a job and were left with no income.

That’s virtually the same result that Country Financial got the last time they asked the same question, in July of 2009.

But the banksters are at least mostly hitting their Wall Street predictions so it is all good I guess.

Which group lives in the bigger bubble, Wall Street or Beltway Villagers?

And because I can:

Limited Good Economic News Won't Last

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You might have seen some headlines from yesterday on the weekly report of Initial Unemployment claims about those claims "falling sharply" (Reuters headline phrase):

Applications for unemployment benefits fell by 37,000 to a seasonally adjusted 391,000 in the week ending September 24 from an upwardly revised 428,000 the prior week, the Labor Department said on Thursday.

My first prediction today is that the 391K figure first announced will be revised upwards when next week's report comes out. My second prediction is whatever good news that can be wrung from this report will have a limited overall effect.

CNN's report was a bit more circumspect with this:

The recent drop to 391,000 maked the lowest level since the week of April 2, when 385,000 new claims came in.

Still, economists cautioned against getting too excited about the better number. It's just one week of data, and according to a government spokesman, seasonal adjustments could have impacted the calculation.

...snip...

For the country overall, the unemployment rate is still at 9.1%...

Continuing claims -- which include people filing for the second week or more of benefits -- decreased by 20,000 to 3,729,000 in the week ended Sept. 17, the most recent data available.

That figure only includes people who are receiving benefits though, which typically run out after 99 weeks.

Including people who aren't currently receiving those benefits, about 14 million people remain unemployed in the United States.

Nice of CNN to point out that the unemployment figure does include those folks who persist in looking for jobs without finding them, even after they have exhausted all benefits.

So where exactly is that good economic news?

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Well, here we go again. As usual, the past couple of weeks there have been a few articles on how the economy really isn't THAT bad. In fact, that was a large part of the title of this article from McClatchy while USA Today offered up this from a Maria Bartiromo interview with the head of AIG, Robert Benosche (with a McCainesque "There's a core of strength to the economy"). However once again, the reality on the ground rears up to refute the cheerleaders. Today's (Thursday, August 18) Initial Unemployment Claims report for last week is out and the numbers are back over the dreaded 400k line once again (via Reuters):

Initial claims for state unemployment benefits increased 9,000 to a seasonally adjusted 408,000, the Labor Department said.

Economists polled by Reuters had forecast claims rising to 400,000. The prior week's figure was revised up to 399,000 from the previously reported 395,000.

Given that the trend the last few weeks has been for an upwards revision of the previous week's numbers, I am not at all surprised at the upward revision from 395K initially reported to the 399K (although since I did not write a post on last week's report, I can't claim to have officially predicted the revision.)

Jobs Numbers Continue to Stagnate While DeeCee Fiddles

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Well today's (Thursday, July 21) report of Initial Unemployment Claims from last week is out and once again, the numbers show little improvement (via Reuters):

Separately, initial claims for state unemployment benefits increased 10,000 to 418,000, the Labor Department said, above economists' expectations for a rise to 410,000.

The Reuters article is a revision of their initial report which had noted that last week's number had once again been revised upwards, from the originally reported 405K to 408K. At least they didn't say the "economists are surprised" for once.

Buried way down at the bottom of the Reuters article are these little nuggets of information:

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 50,000 to 3.70 million in the week ended July 9.

The number of Americans on emergency unemployment benefits declined 80,133 to 3.15 million in the week ended July 2, the latest week for which data is available.

A total of 7.33 million people were claiming unemployment benefits during that period under all programs, down 159,000 from the prior week.

My bold. My guess is that the "decline" in folks receiving extended (emergency) benefits is most likely due to people aging out of the system. The so-called "99ers." And please note that bolded piece once again. "A total of 7.33 million people were claiming unemployment benefits during that period..." The government officially recognizes at least 14M unemployed and 25M to 30M un and underemployed so this means that roughly half the people who are officially acknowledged as unemployed are not collecting any Unemployment compensation at this time.

Meanwhile, all the elected Neros in the Beltway Village continue to fiddle about with the "Grand Bargain" even when the DFHs at place like Bloomberg point out that whatever the results of massive budget cuts may be, creating jobs will not be one of them:

Advocates of reduced federal spending say shrinking the U.S. government would boost the economy and create jobs. They are wrong, according to Wall Street economists -- at least for the short term.

House Republican leaders, including Speaker John Boehner, urge spending cuts to lift employer confidence and increase investment and hiring. President Barack Obama, who signed into law a stimulus program now valued at $830 billion, has echoed the Republican assertions in recent comments, even as he has resisted cuts as deep and fast as they want.

Professional forecasters beg to differ. Fiscal retrenchment could subtract 1.5 percentage points to 2 percentage points from growth in 2012, a drag that will make it difficult to reduce 9.2 percent unemployment, say economists at Bank of America Merrill Lynch, JPMorgan Chase & Co. and Deutsche Bank AG.

I'm usually not one to take the predictions of Wall St economists as some form of gospel but the only group of people with a worse record than Wall St economists on getting things correct on the economy do happen to be the Beltway Village Idiots Politicians, Pundits, and Courtiers.

There is one small piece of a bit of Good News/Bad News. It seems the K Street lobbyists are having to actually work a bit these days. That's the good news. The bad news? We have to hear them whine about it now. Outside of the Banksters and the executives of the Sirius Cybernetics Corp, I can't think of any group who has less cause to whine which probably means we will now see dozens of articles on how the poor misunderstood lobbyists are just really trying to help all the poor widows and orphans honest.

And because I can:

Mr Bernanke, Just What the Hell Are You Waiting For?

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Yesterday (Wednesday July 13), Federal Reserve Chair Ben Bernanke was once again before Congress, testifying on the economy. Buried way down in the Reuters coverage of the hearing was this little nugget:

After recovering from the steepest recession in generations beginning in the summer of 2009, the U.S. economy has lost momentum in recent months. Gross domestic product expanded just 1.9 percent in the first three months of the year, and the second quarter does not look to have been much better.

Bernanke held to the view that recent weakness was due in part to temporary factors like energy costs and the effects on global industry from Japan's earthquake and tsunami.

But he acknowledged the labor market remains weaker than the Fed would like.

The labor market also remains weaker than the 14M unemployed and the 25M - 30M un and underemployed would like as well. While part of the stated Fed mission is "pursuit of maximum employment," the actions of the Fed over these last few years seem to have been more along the lines of "we'll pretend to do something and maybe the miracle will occur." As far as Bernanke's "...view that recent weakness was due in part to temporary factors...," as I've stated before, there are always "temporary factors" that are going to have an effect on life. It is part of life and should be part of his work to be anticipating and dealing with those "temporary factors" as they occur rather than using them as an excuse.

Economists and Ethics: Is There an Effect On the Economy?

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Code of Ethics: A code of ethics is a set of guidelines which are designed to set out acceptable behaviors for members of a particular group, association, or profession. Many organizations govern themselves with a code of ethics, especially when they handle sensitive issues like investments, health care, or interactions with other cultures. In addition to setting a professional standard, a code of ethics can also increase confidence in an organization by showing outsiders that members of the organization are committed to following basic ethical guidelines in the course of doing their work.

I am not currently a member of the American Society for Quality (ASQ) but since I do consider myself a Quality Assurance professional, I have no problem adhering to the ASQ Code of Ethics. When I got my first QA position back in the early '80s, ASQ was known as the American Society for Quality control (ASQC) but the Code of Ethics was then as it is now. One of the many technical books I have read and used to help me in business is Ethics in Quality, which I found an interesting read, if only because the case studies used were not all black and white but showed the nuance of everyday life where sometimes there is no right or wrong answer nor are there always good choices available to folks.

The More Things Stay the Same

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Well, instead of being "surprised" by the June (lack of) Jobs Report, it seems the economists were "stunned" by the numbers (via Bloomberg):

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said he was “stunned” by today’s U.S. employment report.

He wasn’t the only one.

Not a single economist among 85 surveyed by Bloomberg News correctly forecast the 18,000 increase in payrolls in June reported by the Labor Department. Estimates ranged from a low of 60,000 to a high of 175,000. The median was 105,000 -- almost six times the actual number.

...snip...

It’s not unusual for payroll figures to fall outside of the range of economists’ forecasts. The same thing happened last month, as well as in October, November and December of last year.

That last paragraph should become a mantra for economists looking for excuses, but it most likely will not. As I've mentioned in earlier posts, there are always extraneous reasons for things happening within the economy. Like bad weather. And there will always be extraneous impacts that should be accounted for in any economic forecasting.

It Still Sux to be Correct

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Well, today's Jobs Report from the BLS for June 2011 is out and the news is not good. In this post from Tuesday (July 6), I had predicted:

My guess is that the private sector jobs (the ADP number) will be in the 50K range while the overall economy will be 20K to 25K max.

As I admitted in this post from yesterday (July 7), I was off fairly badly on my prediction for the ADP number. Unfortunately for the economy, I was a hell of a lot more accurate on the BLS number than the supposed expert economists (via Reuters):

U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.

Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.

Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.

The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.

"Good News" but Not that Good.

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In this post I wrote Tuesday, I predicted that the ADP Jobs report for June would come in at around 50K private sector jobs versus the economists prediction of 100K. Well the report is out (via Reuters) and I was way wrong while the economists were also under:

Payrolls processor ADP said on Thursday private sector employment increased 157,000 after a modest 36,000 gain in May, and beating economists' expectations for a 68,000 rise.

The original report in May (as I quoted and linked to Reuters in this post) was actually at 38K jobs so 36K is a downward revision. For what it's worth, I do like when I am wrong on these points, especially when I'm wrong and the numbers come in far better than I thought.

Now 157K jobs sounds like something to cheer about and I guess in a way it is but we shouldn't get all giddy with excitement quite yet. After all, the economy needs to add 100K to 150K jobs each month just to absorb new folks coming into the work force each month so 157K jobs does not dent the long term un and underemployment numbers by much. Tomorrow's numbers from the BLS for June will include public sector as well as private sector and it is likely the public sector jobs lost will push the 157K number down significantly. And I'll say right now that July will be worse. How can I say that? Many states start their fiscal years on July 1 and the budget axes will be showing the results as Politico discusses here:

New budgets from 24 states will impose severe cuts, according to the Center on Budget and Policy Priorities.

To make ends meet, Arizona will drop Medicaid coverage for 130,000 childless adults. Michigan will slice public school funding by $470 per student. New York will reduce education aid by $1.3 billion. Wisconsin plans to chop into the Earned Income Tax Credit, which hurts household budgets of the working poor.

And Minnesota? Its government shut down after state lawmakers failed to pass a budget.

Those cuts can reverberate through the private sector, since contracts with vendors and payments to businesses also get slashed.

According to this article from Reuters on the Initial Unemployment Claims report for last week, the Minnesota shutdown is already hitting the numbers:

Prediction: June Economic and Jobs Numbers Won't Be Appreciably Better Than May

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I'm not an economist so this is a fairly easy prediction for me to make. I'm basing this prediction on how the weekly Initial Unemployment Claims have gone up this month (see here, here, and here plus tomorrow's post when I write it). Or at least, the numbers have not dropped as much as anticipated. Either way, things are not improving.

Amazingly enough, (economists claim to be surprised all the time, I get to claim actual surprise when something surprising really happens), there have been a few news articles from different outlets, pointing out some unpleasant economic truths. First up is this article from Monday's (June 27) USA Today:

Whether the economic recovery in the U.S. can continue could depend on a single factor: consumer confidence. Confidence is important because consumers who are upbeat about prospects tend to spend more, driving corporate profits and job growth. Companies hire more employees, boosting spending, growth and confidence.

...snip...

According to a monthly survey released last week by Consumer Reports, households that earn less than $50,000 have been extremely downbeat on the economy every month since the survey's April 2008 launch. Such households make up half of the U.S. population. Meantime, affluent households — those that pull down $100,000 or more a year — have been feeling on average positive about the economy since February 2010.

The primary factor behind the disparity: jobs. Affluent households have seen little impact on job prospects overall. Meanwhile, low-income households have seen a net decline in jobs for 23 out of the past 24 months, according to the survey.

Please do click through and read the whole article as it offers a number of reasons besides those I've extracted to show how the affluent have benefited in this "recovery" while the rest of us have struggled.