Every month, the Bureau of Labor Statistics releases information regarding the jobs numbers, which shows how the underlying economy is performing. Also called nonfarm payrolls, since they do not include farm-related employment, the jobs numbers are one of the most important data sets for trying to understand the strength or weakness of an economy. If the jobs numbers are improving, this means more people are being employed and the economy is gaining strength. If the jobs numbers are weakening, or there are outright job losses, this is an extremely troubling sign for the economy.
Last week, when the jobs numbers report was released, a new wave of optimism spurred the U.S. economy. I saw it in the editorials of the major newspapers; I heard it on the popular financial news stations. The unemployment rate in the U.S. economy dropped from 7.9% in October to 7.7% in November. (Source: Bureau of Labor Statistics, December 7, 2012.)
As the mainstream media and the novice reporters that work in it enjoy the fall of the “official” U.S. unemployment rate and the creation of 146,000 jobs in November, the underlying issues in the jobs market haven’t changed much. In fact, I believe they have become worse in some cases. What I often harp on in these pages is that the meager job creation so far in the U.S. jobs market has been in sectors where people earn lower wages.
More than 36% of the 146,000 jobs created in November were in the low-paying retail industry—in places such as clothing and accessories stores, general merchandise stores, and electronic appliances store. But it wasn’t just in November that we saw heavy job creation in the retail sector—retail jobs in the U.S. economy increased by 140,000 in the last three months, which is almost 34% of all the jobs created in the period from September through to November 2012.
Is this a big deal, Michael? Yes, it is, my dear reader.
In the U.S., one out of every seven waiters and waitresses and one out of every six bartenders have a bachelor’s degree. (Source: CBS, November 5, 2012). Job creation in the U.S. jobs market is not equal—if it were, … Read More
I was reading that Apple Inc. (NASDAQ/AAPL) would produce at least one of its computer products in the United States. Great news for job seekers, but Apple will continue to manufacture most of its products outside of the U.S. in low-cost global manufacturing regions, such as China, Asia, Mexico, Eastern Europe, and Latin America. The reality is that companies have to control costs, especially given the slower revenue growth amid corporate America.
There are 22.5 million or so Americans looking for work who are either unemployed or underemployed; about 12 million are fully unemployed. These are not good jobs numbers, as many of these people are taking minimum-wage jobs just to fight off the creditors and put food on the table. The poor jobs climate is also hindering the eurozone, which you can read more about in “Why Spain’s in for Some Hurt.”
Job growth is showing signs of wanting to edge higher, as the unemployment rate made a surprise decline to 7.7% in November with 146,000 workers managing to find full-time work, which was well above Briefing.com’s estimate of 80,000 jobs.
And while I’m pleasantly surprised with the drop in the unemployment rate and jobs numbers, the decline in the unemployment rate can be attributed to fewer people looking for work, according to the Labor Department. During Hurricane Sandy, for example, many did not search for work. We not only need better jobs numbers, but we also need stronger skilled-jobs numbers.
A month ago today, when the September unemployment rate was announced, optimism peaked in the media and politicians had a chance to say that the U.S. economy is on the right track.
In September, the official unemployment rate in the U.S. economy was 7.8%, below the eight percent mark for the first time during Barack Obama’s presidency.
Now, in October, the unemployment rate increased to 7.9%. (Source: Bureau of Labor, October 2, 2012.) If you have been reading Profit Confidential for a while, you know that the unemployment rate the Bureau of Labor reports doesn’t give us the whole picture.
I focus on the underemployment rate, which includes people who have given up looking up for work and people who have part-time jobs but want full-time jobs. According to the Bureau, the underemployment rate in the U.S. economy was 14.6% in October, a minute decrease from last month.
So far in 2012, in the U.S. economy, the employment growth has averaged 157,000 jobs per month, about the same monthly average of 2011. According to most economists, the U.S. economy needs to create 150,000 jobs a month just to keep up with the number of new people entering the work force.
Trillions of dollars have been thrown at the U.S. economy since the credit crisis of 2008. Our official national debt has grown by about $6.0 trillion under President Obama. Our national debt of $16.3 trillion (and growing) is more than this year’s estimated gross domestic product (GDP) of $15.8 trillion! Aside from the trillions of dollars the government has borrowed, the Federal Reserve has … Read More
I love baseball, but when the commissioner of Major League Baseball (MLB), Bud Selig, makes $19.0 million annually along with half a million dollars in expenses, you’ve got to wonder about the sanity of the value assigned to various jobs. Then there is Vikram S. Pandit, the CEO of Citigroup, Inc. (NYSE/C). The bank was saved by the government and is still in recovery mode, but Pandit made around $14.0 million in 2011. On the Yahoo! web site, his salary is not listed, as this would likely bother many readers.
Then there are the 23.5 million or so Americans looking for work who are unemployed or underemployed, with about 13 million fully unemployed. These are not good job numbers, as many of these people are taking minimal wage jobs just to fight off the creditors and put food on the table, albeit it’s likely they cannot even do that.
The key non-farm payrolls job numbers for February came in better than expected at 227,000 new jobs, but it represented a decline from the upwardly revised 284,000 in January. Many argue that the job numbers reading was the third straight month of 200,000-plus jobs created, but, while the job numbers are encouraging compared to the past coming out of a recession, more and better quality jobs need to be created. Some pundits believe that job numbers of around 500,000 per month are needed for a healthy jobs market.
The official unemployment rate held at 8.3%, but I wonder about the validity of this jobs number as far as an accurate reflection of the nation’s jobs situation. My thought is … Read More
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