Lying with Statistics: the September Jobs Report

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

One month before the presidential election, there was suddenly a major reversal in unemployment trends that have taken place during the entire administration of the Obama presidency. The figures indicate explosive growth is taking place in the U.S. economy and this has occurred overnight. The explanation of where this growth is coming from or how it has happened is illusive.

Unlike the previous four years, large numbers of jobs were supposedly created last month. Actually that's not exactly the case. The household survey reported 873,000 jobs were created, whereas the business survey reported 114,000 — a typical amount. In previous months, the household survey has actually indicated major job losses. The mainstream media has failed to report this. However, when a number suddenly appears that lacks credibility in the same survey, but that number is positive, it apparently is worth reporting. 

Where did these jobs come from?  It's not clear from the report. It was specifically stated that "manufacturing employment edged down in September". There was a loss of 16,000 jobs, so there is no evidence that U.S. manufacturing is on the upswing. Based on the following statement, 600,000 people were hired part-time last month: "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September". This is a huge change. Where are these part-time workers employed and what were they hired to do? Will they be fired the day after the election?

Perhaps even more amazing is that the BLS reported that the U.S. labor force grew in September 2012 for the first time in years. From August 2007 to August 2012, the U.S. labor force shrank like it would during a depression with a total 9,602,000 people leaving it. It abruptly increased by 418,000 last month. What caused such a large number of people to suddenly influx into the labor force? GDP last quarter barely grew indicating a stagnant U.S. economy.

The number of unemployed persons, at 12.1 million, supposedly decreased by 456,000 in September. The BLS stated that the unemployment rate fell to 7.8% —  the first time it has been below 8.0% since just after President Obama took office. The continual multi-year unemployment rate of over 8.0% has been a major issue in the presidential election.

The numbers in the September employment report are quite fantastic and there is no basis for believing them. Disreputable statisticians can easily produce highly unreliable numbers. If statistics are inconsistent with the past, with each other, have no traceable explanation or seem contradictory with real world observations, they are suspicious. In the case of the September employment report all four criteria have been met. The quality of U.S. economic numbers have been decaying for the last 30 years. They seem to currently be making the transition from manipulation to outright fantasy.

Disclosure: None


Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

U.S. Employment in Long-Term Downtrend

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

The August employment report released on September 7th was not particularly good by any measure. While the month to month changes seem lackluster, the longer term picture is truly dismal.

The headline numbers indicated that 96,000 jobs were created in August and that the unemployment rate declined from 8.3% to 8.1%. The previous two months were revised down by 41,000 however. Manufacturing employment was down 15,000 from July. "Food Services and Drinking Places" was the category with the biggest gains, adding 28,000 jobs last month.

Underneath the surface, the picture wasn't mediocre, it was negative. Looking at the total number of people listed as Employed in Table A indicated that 119,000 fewer Americans had jobs in August than in July. This comes from the Household survey and receives little attention from the mainstream media. This number was negative in the July release as well. Why isn't this reported?  Well perhaps the media doesn't trust people to know whether or not they actually have a job.

What happened to employment between July and August though was minor compared to the weakening jobs picture over the last five years. It was in August 2007 that the Fed cut the discount rate, which was the beginning of its attempts to stimulate the economy. By the end of 2008, the Fed's Fund rate was at zero and a number of special programs had been implemented to handle the Credit Crisis. The first quantitative easing program had begun and a second round took place after that. In respect to jobs, the figures indicate that the Fed's efforts have been an utter failure.

In August 2007, 145,794,000 people were employed in the U.S. Last month, five years later, 142,101,000 people had jobs. So after all of the Fed's efforts and all the stimulus programs implemented by the Obama administration, there were 3,693,000 less jobs in the United States.   In his Jackson Hole Speech in August, Fed Chair Ben Bernanke stated the Fed's efforts "increased private payroll employment by more than 2 million jobs". Oh really?  Why don't those jobs show up in the government's own statistics Mr. Bernanke?

What caused the unemployment rate to be reported as lower in August than in July was a decline in the labor force. It shrank by 368,000. This is only a continuation of a multi-year trend though. In August 2007 there were 79,319,000 people not in the U.S. labor force. By last month, 88,921,000 didn't have jobs. That's an increase of 9,602,000 in five years. Yet, at the same time the employable population has grown substantially.

What about during just the Obama administration? His employment record is a big issue in the current presidential election after all. The labor force population has increased from 234,552,000 to 243,555,000 or by 9,003,000 so far during Obama's term. The current participation rate of 63.5% (low for the last few decades) would indicate that approximately 5,717,000 jobs should have been created to keep employment at a steady state. When Obama took office in January 2009, 142,099,000 Americans were employed. As of August 2012, 142,101,000 Americans were employed. There was a net increase of only 2,000 jobs. This represents a huge relative loss since the U.S. needed 5.7 million jobs just to maintain the same level of employment. More jobs would have been needed to make things better.

At his Jackson Hole speech Bernanke stated how concerned he was at the unemployment problem in the United States and that the Fed was willing to do more. Considering how little impact the Fed's high risk money-printing policies have had and how little seems to have resulted from the numerous stimulus programs that have been implemented, there is no reason to believe either will be improving the economy in the future. They are good for juicing stock prices however — at least in the short term. In the long run the gains will prove to be illusory.

Sources for the above from Table A of the August 2007,  January 2009 and August 2012 Employment Situation report from the BLS. The URLs for the websites are:
http://www.bls.gov/news.release/history/empsit_09072007.txt
http://www.bls.gov/news.release/archives/empsit_02062009.htm
http://www.bls.gov/news.release/empsit.a.htm


Disclosure: None


Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

July Jobs Report Shows U.S. Economic Statistics Are a Joke

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

According to the Labor Department, the U.S. added 163,000 jobs in July. Also according to the Labor Department, the U.S. lost 195,000 jobs in July. So the U.S. economy is either doing OK or it's falling apart big time. Or maybe something between the two is happening. Confused? You should be.

Two separate surveys are used for the employment report. In one, they ask businesses about the amount of hiring they've done in the previous month and in the other the ask people whether or not they have a job. The amount of jobs created for the month is determined by the business survey and the unemployment rate from the survey of households. As more than one article on the July employment report pointed out today, "economists say the business survey is more reliable". So if you think you're unemployed, but an economist says you have a job, the economist is right.

The unemployment rate ticked up to 8.3% according to the household data.  The two surveys have frequently not seemed to match in the past with minimal job gains resulting in drops in the unemployment rate. The Labor Department explained that this occurred because millions of people have left the U.S. labor force since the "recovery" began in 2009 (150,000 more left in July). Even though these people are unemployed, they are not counted as unemployed and this makes the unemployment rate look better. Why millions of people would stop looking for work during a "recovery" has never been answered. Usually, this type of behavior takes place during depressions.

The Labor Department did not discuss the massive discrepancy between its two employment surveys in its press release. Instead it gave a rosy assessment of all the jobs created last month. This included 25,000 new jobs in manufacturing, even though the recent ISM Manufacturing report (a private survey) indicated U.S. manufacturing activity shrank last month.  So an industry that is losing business is hiring lots of new workers. That certainly makes a lot of sense all right.

One possible explanation for the discrepancy was that "inappropriate" statistical adjustments were made to the numbers in the business survey. While one should never rule out gross incompetence when discussing the output of the government statistical offices, a more cynical person might think that there was a purposeful effort to produce better numbers than actually exist because it's an election year. After all, those pesky downward revisions months later never get any notice from the press and the ugly truth can always be told later when no one is paying attention (and after they've voted).

Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

U.S. Employment — The Spring of Discontent

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

According to the BLS, the U.S. economy created only 69,000 jobs in May 2012. The previous two months were revised down, March from 154,000 to 143,000, and the April from 115,000 to 77,000. Although the U.S. economy is not creating enough jobs for new entrants into the labor force, the BLS claimed the unemployment rate was only 8.2%.

Early in the year, the mainstream media was filled with reports of the recovering job market and a U.S. economy on the upswing. The average reported monthly job gain was 226,000 a month in the first quarter — a healthy amount if it were true. There was more than enough reason to believe it was not true however. The jobs numbers are seasonally adjusted and the winter was unusually warm meaning the usual large layoffs in industries like construction didn't take place. Nevertheless, the BLS adjusted its figures as if they had.

If the better figures in the winter were created by seasonal adjustments and not a better economy, then the spring figures should consequently be weak. This is exactly what has happened. The telltale sign can be found in the May Construction employment number — down by 28,000 last month when it should have been strong.

Almost all the job gains came from only two sources last month, Health Care and Social Services (33,000)  and Transportation and Warehousing (36,000). Health Care is the only category that consistently added jobs during the Great Recession. If the BLS numbers are projected out to the distant future, almost every American in the labor force will eventually be employed in this field.

As usual, comparisons with five years ago indicate that the U.S. economy is still in serious trouble. There were almost 3.7 million less people employed last month than in May 2007. At the same time, the over-16 noninstitutional population has increased by nearly 11.5 million or around 192,000 per month. Yet, the BLS claims that the U.S. labor force has grown by a little over 2.2 million or approximately 37,000 a month. There is a major disconnect between those numbers and it indicates that a lot more Americans are unemployed than the BLS headline number indicates.


Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

U.S. Non-farmPayrolls -- The Statistical Illusion of Jobs

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

The Employment Report for December 2011 was released today with a glowing press release from the BLS (Bureau of Labor Statistics).  The highlight of the report was the 42,000 courier and messengers jobs created last month and the claim that the unemployment rate fell to 8.5%

Statistics can easily be manipulated and it is not unknown for political regimes to do so in order to hold on to power (and 2012 is an election year in the U.S.). After all, it is much easier to change a number than to fix the underlying problem the number represents. Fortunately, the BLS publishes a number of statistical Tables with each monthly report that can be used to check its calculations.

When the Great Recession began in December 2007, the civilian non-institutional population of the United States was 189,993,000. At that time, the number of people in the U.S. labor force was 125,588,000. As of December 2011, the BLS states that the employment population ratio for the U.S. is 58.5% (0.585). The non-institutional population of the U.S. was reported at 193,682,000 or 3,689,000 higher than it was in December 2007. The labor force in December 2007 was 125,334,000 and multiplying the increase in the U.S. population in the intervening four years by the employment population ratio indicates that the labor force should have increased by 2,158,000 to 127,492,000.  However, the BLS reports the U.S. labor force last month was 124,114,000. More than three million people are missing from its figures.

The smaller the labor force is, the better the headline unemployment rate becomes. The BLS claims these three million plus people left the labor force and this justifies purging them from the statistics. There is a problem with their line of reasoning however. Large numbers of people only leave a labor force during periods of severe economic distress.  It does not happen during economic recovery. It does not indicate an employment situation that is improving.  Yet, the BLS produces numbers showing things are getting better when this happens. This violates the first rule of statistics -- the results must reflect reality. The BLS numbers do not.

Dividing the number of employed in December 2011 by the size of the labor force that should exist based on the population numbers produces an unemployment rate of 9.6%, not 8.5%. This is the headline number that should be reported. If the BLS wants to insist however that more than three million people have indeed left the labor force (and this has continued in the last year -- the size of the labor force in December 2011 is smaller than it was in December 2010), it should also make it clear that this indicates that there has been an ongoing recession and no economic recovery has taken place. Both can't happen at the same time, except for a brief period. Either the economic recovery story is a lie or there hasn't been a shrinking labor force. 

While mainstream economists will insist that employment is a lagging indicator (more than two years is some lag), this has only been the case in the U.S. years after statistical "improvements" were introduced in the 1980s and 1990s in how government economic numbers were determined. Before that, employment recovered with improving GDP as should be the case. If you think about it, the term jobless recovery makes as much sense as tall midget or genius moron.

The improvement in the weekly unemployment claims is also being cited as evidence of an improving jobs picture. It would be more accurate to say that it is evidence of a jobs picture than can't continue to get worse. As I have stated since at least mid-2010, the weekly claims number will regress toward the mean (move to its long-term average) because eventually there will be few workers who remain to be laid off. After being elevated for several years, the only way that weekly claims  can now increase is with a big jump in bankruptcies. This will be avoided as long as the economy holds steady.

What is keeping the U.S. economy from getting worse is the unprecedented budget deficits that the U.S. is running. If you spend an extra $1.3 trillion dollars that you don't have as the U.S. did in 2011, this will certainly stimulate the economy in the short-term since much of this money winds up in consumer pockets and they spend it.  According to the non-farm payrolls report for December, the U.S. is not exactly getting good value for this money. Unless of course, you think low-paying courier and messenger jobs should be the cornerstone of the economy.


Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
 Organizer, New York Investing meetup
 http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

Why the U.S. Unemployment Numbers Can't Be Trusted

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

There is more fantasy in the U.S. employment numbers than in a Harry Potter novel. According to the BLS, the U.S. added 120,000 jobs in November 2011 and the unemployment rate fell by 0.4%. This is not possible.

The U.S. economy needs to create approximately 150,000 jobs a month to keep the unemployment rate steady based on new entrants into the labor force (the oft cited 200,000 figure is based on past conditions that are no longer applicable). According to official sources, the U.S. added 131,000 jobs a month in 2011. This is better than in previous years, but still not enough to reduce the unemployment rate. Yet, the BLS (Bureau of Labor Statistics) claims the unemployment rate is dropping and fell from 9.0% to 8.6% in November. How is this possible?

Well, first of all, it isn't. These numbers were created — and "created" is a very appropriate word in this case — by claiming that large numbers of workers left the U.S. labor force. At the same time, the U.S. government has stated that an economic recovery has takien place. A country's labor force does not shrink during recoveries, it grows. This has not happened during the current U.S. "recovery".

The U.S. labor force had approximately six million fewer workers in November 2011 than it did in November 2007. Four years ago, 146,793,000 people were employed in the U.S. In November 2011, only 140,987,000 had jobs. This makes no sense if a recovery has taken place. It does make sense however if there is an ongoing recession and government statisticians have decided to massage the numbers for political reasons.

On the flip side, there were 79,069,00 people not in the labor force in November 2007 and today that number is 86,757,000 — almost eight million greater. The labor force of the U.S. should not be shrinking because the number of students and immigrants looking for jobs exceeds the number of people retiring. People do leave the labor force though if they have determined that there simply are no jobs to be found. The recent Consumer Confidence survey from the Conference Board indicated that less than 6% of Americans thought jobs were currently plentiful. 

In November 2011 alone, the BLS claims that the U.S. labor force dropped by almost a net 600,000. This helped reduce the reported unemployment rate to 8.6%. This form of statistical manipulation is something that might be expected in a corrupt third-world backwater. Apparently, this is the standard that Washington is now adhearing to for its statistical reporting. 

 
Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any securi

Is October's Unemployment Rate Really 12.7%?

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

The BLS released its non-farm payroll figures for October today and they stated that 80,000 jobs were created and that the U.S. unemployment rate was 9.0%. There are reasons to believe that this number is actually as high as 12.7%.

Except for February and March of this year, the unemployment rate (the U-3 number) has been 9.0% or higher since May 2009. It hasn't risen well into the double digits because large numbers of workers have supposedly left the labor force and these people are not counted as unemployed. If we go back four years to just before the Great Recession began, we find that in October 2007 there were 145,937,000 employed Americans over 16 and 79,506,000 were not in the labor force. Now in October 2011, there are 140,302,000 employed people and 86,071,000 not in the labor force. You can see the figures here: http://www.bls.gov/webapps/legacy/cpsatab1.htm.

So in the last four years the American economy has had a net loss of 5,635,000 jobs. This huge loss hasn't shown up in an escalating unemployment rate because at the same time a net 6,565,000 people have supposedly left the labor force. The BLS conveniently does not count them as unemployed even though they do not have jobs. If we included them in the unemployment calculations, the unemployment rate for October would be 12.7%. This should not be confused with the underemployment rate (known as U-6) which includes people working part-time, but who want full-time jobs. This number was 16.2% last month.

A case could be made that the U.S. labor force should be shrinking because more people are retiring than there are graduating students. There are approximately 3.5 million people reaching age 65 (not all of whom retire and many of whom didn't work) and only about 3.2 million students graduating high school currently (eventually most of them enter the labor force). While retirees have the advantage, there are also approximately a net 1.3 million immigrants coming into the U.S. every year and a disproportionate number of them are younger adults of employment age. The labor force should at least be steady, if not growing slowly. Instead, BLS figures indicate a rapid shrinkage is taking place.

It would be highly unusual for the labor force to decline at all during a recovery. When the economy is strong, people on the margins go out looking for jobs. For the labor force to drop by millions indicates an extremely weak economy.  So, if the U.S. labor force has six and a half million fewer workers than it did four years ago, no significant recovery has taken place. If the labor force hasn't dropped by as much as the BLS claims, then the unemployment rate is in the double digits and this also indicates no significant recovery has taken place. While it seems more likely than the true unemployment rate is closer to 13% than 9%, either figure indicates that the U.S. economy is still recessionary.

Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

More Contradictions in Third Quarter GDP

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

The Commerce Department reported today that third quarter GDP increased at a 2.5% annual rate. A supposedly much lower inflation rate created significant improvement over numbers from earlier in the year. There was also a surge in consumer and business spending reported, although other recent surveys contradict the claims in the GDP release.

Real personal consumption expenditures (consumer spending) increased by 2.4% compared to only 0.7% in the second quarter. Most of this was caused by a 4.1% increase in durable goods purchases. Nondurables were barely changed. Delayed auto and parts shipments from Japan because of disruption from the massive March earthquake can account for more sales being reported in the third quarter, but not likely to be repeated in the fourth. Despite claims of much higher consumer sales, businesses barely increased inventories in the third quarter — something they would do if they saw their sales climbing. Moreover, consumer confidence surveys indicate consumers were gloomy in the third quarter and readings have now fallen as low as they were around the bottom of the 2008/2009 Credit Crisis. Consumer confidence surveys are not controlled by the government and act as a check of the reliability on government statistics. 

While businesses didn't seem to notice any increase in customer spending, there was nevertheless a frenzy of equipment and software buying going on. This supposedly increased by 17.4% during the quarter. Apparently, I missed the all the news about major software upgrades and equipment innovations that took place this summer. Nonresidential structure spending was almost as buoyant increasing by 13.3%. Where this building boom is taking place isn't exactly clear. Coincidentally, the unemployment rate among U.S. construction workers is also 13.3% (See Household Data Table A-14 of the September Non-Farm Payrolls Report). As bad as this is, it is still a year over year improvement.

GDP figures are also boosted if the inflation rate is lower. It's a lot easier to report better inflation numbers — all it takes is some statistical adjustments — than it is to actually improve the economy. Inflation was supposedly 3.3% in the second quarter, but only 2.0% in the third quarter. Nominal GDP is reduced by the inflation rate to get the final figure. The change in inflation, whether or not it actually took place, added much of the improvement seen from the second to third quarter, not an increase in economic growth.

Mass media coverage about GPD was of course ebullient about what good shape the U.S. economy is in. Of course, we won't know the actual number for several more years. This report is only preliminary and there are two adjustments that will be made to it and then annual revisions every July. In the last several years, adjustments have been mostly down, sometimes by very significant amounts. Even then, that number is going to still be overstated because the U.S. consistently understates its inflation rate. To find an approximate level of the actual GDP, just subtract 3% from the reported number. This will give you a more accurate sense of what is going on in the economy. 

Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

U.S. Employment Still at Recession Levels in September

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

The non-farm payrolls report for September indicated the U.S. economy added 103,000 jobs last month. Mainstream media immediately jumped on the number as proof the U.S. is not in a recession. It indicates no such thing.

While it seems reasonable to assume that employment can't increase at the begging of a recession, this did not happen in December 2007 when the Great Recession began. Total U.S. non-farm payroll employment actually peaked in January 2008 at 137,996,000. It then declined until hitting a low point of 129,246,000 in February 2010, many months after the recession supposedly bottomed in June 2009. Total employment in September 2011 was only 131,334,000, not even remotely close to levels four years earlier. These figures can be viewed at: http://research.stlouisfed.org/fred2/data/PAYEMS.txt.

The internals of the employment situation for September were not encouraging either. In their press release, the BLS admitted right up front that the end of a strike by the Communication Workers union added 45,000 jobs to the 103,000 total. This leaves only 58,000 jobs being created during the month. More than that amount came from only two sources -- health care and construction. The largest increase in jobs was 41,000 and they were created in the "health care and social assistance" category. Like education, many of these jobs are funded by the government either directly or indirectly, yet they are counted as private sector jobs. The government promulgates this fantasy and the mainstream media mindlessly repeats it.

Another 26,000 jobs somehow came from construction. At least the BLS didn't claim they came from the struggling residential real estate market. Almost all of these new jobs came from the heavy and civil construction category. Perhaps the federal government is building another Hoover Dam and forgot to mention it to the public? This is sort of an eyebrow raising number to say the least.

So in September 2011, there were 6,649,000 less employed people in the U.S. than when the Great Recession began in 2007. This is after over two years of supposed recovery. Based on the recent net increases in the labor force, the U.S. needs to create approximately 150,000 new jobs a month for the employment situation to just hold steady. To reduce the official unemployment rate of 9.1% would require adding a much larger number of jobs every month. This is not happening. As for whether or not the U.S. is in a recession, an unemployment rate of 9.1% has always indicated a recession in the past. Is there any reason to think "things are different" this time around?

Disclosure: None.

Daryl Montgomery
Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.

Recovery Goes Jobless in August

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.

More evidence that the U.S. economy is grinding to halt was provided by the August non-farm payroll numbers today. According to the BLS (the Bureau of Labor Statistics), the U.S. economy produced no additional jobs in August, the unemployment rate remained unchanged at 9.1%, and average hourly earnings declined. The June and July numbers were revised downward with 58,000 less jobs than originally reported.

Almost every category lost jobs in August except for health care and social assistance, professional and business services, and mining and logging. Health care and social assistance added 30,000 jobs. This category was the one perennial gainer during the Great Recession and its aftermath. Even though many of these jobs are government related, they are classified as private sector by the BLS. Professional and business services added 28,000 jobs. A footnote in the report states that this number includes jobs from other unspecified categories (could those be government jobs that are included to make it look like private sector employment is better than it actually is?).  Mining and logging added another 6,000 jobs.

Year over year comparisons were even more dismal than the monthly numbers suggested. There were only 400,000 more people employed in the U.S. this August compared to August 2010 (see Household Data, Summary Table A on the BLS website for the details). This is the actual net number of new jobs created in the last year. This has averaged 33,000 a month. At the same time, the non-institutionalized civilian population has been growing at almost 150,000 per month. Yet, during this time period, the unemployment rate fell from 9.6% to 9.1%.  This has happened not because a lot of jobs were created, but because approximately 2.3 million people left the labor force.

Despite close to zero percent interest rates and the trillions of dollars of stimulus thrown at it, the U.S. economy seems incapable of producing jobs. The only thing that has prevented the reported unemployment rate from rising into the double digits is the large numbers of people exiting the labor force (they are not counted as unemployed). This doesn't happen when a real economic recovery takes place. People rush into the labor force as jobs become more plentiful. Unemployment rates also don't remain at the 9% level if the economy is doing well as has constantly been reported. Mainstream press claims to the contrary,  a "jobless recovery" just doesn't exist in the real world (nor are there tall midgets or thin obese people). Based on the jobs numbers, investors should assume that the U.S. has been in a chronic state of recession and chronic stimulus is needed to keep things from getting worse.   

Disclosure: None

Daryl Montgomery
Author: "Inflation Investing - A Guide
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. There is no intention to endorse the purchase or sale of any security.
 

Why the U.S. Economy is Turning Down

 

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented amounts of money printing. This is the official blog of the the New York Investing meetup.

A number of economic reports have come in lower than expected recently and the talking heads on TV are perplexed as to why a sudden downturn is taking place. Listening to their commentary, you will hear all sorts of fanciful explanations except the most obvious one – the massive government deficit spending that has been the reason for the apparent economic recovery has been frozen because the U.S. national debt ceiling hasn’t been raised by Congress.

The debt ceiling is currently $14.3 trillion and this was reached in May. Debt was already getting close to this figure as early as February however and federal spending was decelerating long before May. Based on the 2011 fiscal year budget (which runs from October 1, 2010 to September 30, 2011), the U.S. was on track for a deficit as high as $1.65 trillion this year. This represents approximately 11% of U.S. GDP. This 11% is just the deficit part of federal government spending, not all of it. Subtract this from GDP, you would see GDP was only around $13 trillion – lower than before the Credit Crisis began.

Moreover, the part of the GDP generated by the deficit is being paid for with borrowed or printed money. Actually, it’s mostly printed money. The amount of quantitative easing planned by the Federal Reserve in the first half of the year is enough to cover 70% of the deficit.  The government issues bonds to pay for the deficit and then the Fed buys them with printed money. This is what has been making the economic numbers look better and is being described by the mainstream media as an economic recovery.

A monkey wrench was thrown into the works however when Congress refused to raise the debt ceiling. As a consequence, deficit spending has ground to a halt for a while (expect it to return soon) and this in turn slowed down the Fed’s effort to inject newly printed money into the economy. How dependent the health of the economy is on deficit spending supported by the Fed’s phony money operation has become apparent in recent economic reports.

The May non-farm payrolls indicated only a 54,000 increase in jobs for the month. Moreover, the previous two months were revised downward by 40,000 jobs. The manufacturing sector, which has been leading the recovery, actually lost 5,000 jobs. Close examination of the figures indicates there are well over two million less people in the labor force than last year at this time. If they had remained in the labor force, the current unemployment rate would be 10.6% rather than the reported 9.1%. It would be highly unusual for the labor force to shrink at all, let alone by over two million, if the economy was growing as it supposedly has been. People leaving the labor force make the unemployment numbers look better than they are though and government statisticians are well aware of this.

Regardless of how much recovery has taken place, it is clear that the goods producing sector of the economy is weakening. While the ISM Manufacturing report for May still indicated expansion, every component was lower than it was in the April reading. New Orders and the Backlog figure were barely positive.  The highest component, as has been the case for many months, was Prices Paid – a measure of inflation. It was down from a whopping 85.5 in April to a still very high 76.5 (above 50 indicates expansion). Much of the growth in manufacturing has occurred because the items coming off the assembly line cost more, not because of there are more of them. The Durable Goods reading from April, the most recent, was down 1.2%, confirming less demand for the output of U.S. factories.

Tying it all together are the Leading Economic Indicators (LEI), an indication of where the economy is heading. These were down 0.3 in April, indicating the economy is likely to continue to lose steam. LEI will probably stay weak until the deficit ceiling is raised and newly printed money can start flowing back into the U.S. economy at its formerly prodigious rate. If this doesn’t happen, Americans might discover that just like the proverbial emperor, the U.S. economy has no clothes.

Disclosure: None

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21
Author, "Inflation Investing - A Guide for the 2010s", Volume 1
http://www.amazon.com/Inflation-Investing-Guide-2010s-ebook/dp/B0051GU06W/ref=sr_1_3?s=books&ie=UTF8&qid=1307366974&sr=1-3

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

Some Recovery, Half a Million More Unemployed Last Week

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


After more than a year of economic 'recovery', the Department of Labor reported weekly unemployment claims rose to 500,000 last week. Any number at 400,000 or higher indicates recession. The last time weekly claims were below that number was the week of July 17, 2007 - more than three years ago.

The unemployment problem has two components - not enough hiring in the private sector and too many job losses for people who have jobs. The lack of hiring can be seen in the monthly non-farm payrolls report and the too much firing shows up in the weekly unemployment claims. Not all U.S. workers are eligible to collect unemployment however so the weekly claims numbers understate the actual number of people who lost their job. Even with the understatement, unemployment looks bad enough as is.

The number of former workers collecting extended benefits rose to 4,753,456 in the week ending July 31st (the most recent data). This was up 260,105 or over 5% from the previous week. A year earlier in 2009, only 2,961,457 were in this category, which includes people unemployed for over 26 weeks. So the number of people who are long-term unemployed and have not yet exhausted their benefits has risen over 60% in the last year -a year when economic recovery was supposedly taking place.

Since November 2009, the weekly jobless claims have mostly been in the 450,000 to 500,000 range. There is no noticeable trend of improvement. This is amazing, not just because of trillions in deficit spending that the government told us would make the economy better, but over the long-term (and three years is the long-term) this number should automatically drift down. Companies have to have a certain minimal amount of employees to run their operations. As time goes on, the number of people that can be terminated drops significantly and so should weekly unemployment claims. This drop in claims wouldn't mean the economy is getting better, although the mainstream media would blast headlines claiming that was happening, it would mean that there aren't a lot of people left to fire. At this point in the cycle, since claims aren't dropping, business activity has to be continually declining to maintain the same high unemployment numbers. That's the definition of a recession, not a recovery.

Investors should not be surprised if the weekly unemployment claims numbers start looking better soon and for the next couple of months. The U.S. employment situation is a major embarassment for the administation and there is an important election in November. This week, the president is making appearances in  five states to make the case that it was worth borrowing trillions of dollars for stimulus spending and doing so has put America 'back on the road to recovery'. The last nine months of weekly unemployment claims certainly aren't supporting this view. With a statistical adjustment here and there though, the numbers could suddenly look a whole lot better, even if the economy isn't improving at all.

Disclosure: No positions.

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

June Employment Report: Where are the Graduating Students?

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


Every May and June millions of students graduate from high school and college and enter the U.S. labor force swelling the numbers. Yet in the just released employment report for June, the BLS claimed the labor force decreased by 652,000 last month. This followed a decrease of 286,000 in May. This of course is not possible unless the U.S. economy is in the midst of a depression.

So where did the all the recent graduates go? One place most of them didn't go was to a place of employment. A survey by the National Association of Colleges and Employers found only 40% of new college graduates had a job offer before leaving school in 2010. This compares to two-thirds in pre-recession 2007.  High school graduates not going to college probably didn't do much better. The BLS lists the unemployment rate for those between 16 and 19 as 25.7%.

According to the Statistical Abstract of the United States, 3.3 million students graduated high school and another 3.3 million received college degrees in 2010. While not all of these people would have entered the labor force, it can be assumed that at least a few million did in the last two months. Nevertheless, the BLS claims that there were almost a million less people in the U.S. labor force in June than there were in April. This huge drop in participants caused the reported unemployment rate to drop to 9.5% in June since people who leave the labor force aren't counted as unemployed. The Bureau explained these disappearing participants as people who gave up looking for jobs because none were available for them - not exactly an indication of a recovering job market.

BLS figures further show that there were 301,000 less employed Americans in June than there were in May (see http://www.bls.gov/news.release/empsit.a.htm). The headline number reported a loss of only 125,000 jobs however. The BLS explained this away as a loss of 225,000 census jobs and claimed that the private sector added 83,000 jobs. If you use the 301,000 figure though, it looks like there was a loss of approximately 83,000 private sector jobs.

The insane contradictions in the BLS figures can partially be explained by 'seasonal adjustments'. This is one of the statistical tricks the bureau utilizes to try to make a sow's ear look like a silk purse. Seasonal adjustments make it possible for millions of graduating students to enter the labor force and the BLS to report that the labor force shrank while this was happening.

The employment numbers should be seen for what they are - absurd results created by gross manipulation. Many people however don't wish to believe this takes place despite all the evidence. Those are the people who really need to worry about the current state of the U.S. economy. If the labor force can decline by a million when millions or graduating students are entering it, this means it really lost maybe four or five million workers in a two-month period. That indicates that things are worse in the U.S. now than they were during the Great Depression in the 1930s.

Disclosure: None

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

The Good News, Bad News Jobs Report

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


There was something for both bulls and bears in the April employment report. The government stated that 290,000 jobs were created last month, a solid enough number. Despite these job gains, the headline unemployment rate rose to 9.9%. If certain discouraged workers and forced part-timers were added, the unemployment rate would have been an incredibly high 17.1%.

It is of course puzzling that the unemployment rate can go up from 9.7% to 9.9% while the U.S. economy is supposedly adding 290,000 jobs. The mystery is solved according to the BLS (Bureau of Labor Statistics) by noting that 805,000 jobseekers reentered the labor market in April. Interestingly, a similar number of workers left the U.S. labor market in a one-month period between December 2009 and January 2010. Perhaps the BLS just misplaced them for four months and finally found them again? Labor force participation is one of the areas where it is easiest to fudge the numbers to make the employment statistics look better.

Seasonal 'adjustments' can also improve the numbers quite a bit as well. The economy usually adds jobs at this time of year and they are appearing right on schedule in the employment report. For an example of how seasonal adjustment works, note the employment numbers in the education category in June. There is generally a 20% reduction in education employment once the school year ends. You will see no such drop in the employment report. The BLS should perhaps give the seasonal adjustment term another name, such as 'make-believe adjustment' for instance, so the public can have better insight into how the employment numbers are created.

The BLS did at least admit that the government hired 66,000 temporary workers in April to help conduct the census. Census hiring has been going on since March 2009 and should have peaked in the last two months. Sources estimate total census-hiring in the range of 1.2 million. I have not found anything near this amount added to the government category in previous reports. However, temporary workers in the Business and Professional category have ballooned during the census hiring period. A footnote in the employment report indicates that jobs added in 'other' categories may be included in the Business and Professional category. We will have to see what happens there in a few months when almost all of the 1.2 million census workers are no longer employed.

To see if the job situation is actually improving, it is always a good idea to compare year over year figures. According to the BLS, the number of people 'not in the labor force' is over two million higher in April 2010 than it was in April 2009. This increase reduces the reported unemployment rate. The employment to population ratio is more than a percent lower today than a year earlier. The worse comparison though is for long-term unemployment (27 weeks or over). This number has grown considerably and is on its way to doubling. A year ago there were 3.7 million long-term unemployed and last month there were 6.7 million. This indicates that the unemployment rate is not just high, but a significant number of the unemployed are having trouble getting new jobs - and this will continue to be the case.

According to recent polls, just 21% of Americans consider the economy to be in good condition. The view of the average person is very different from the numbers produced by the statisticians in Washington. Even with the job increases that took place in April, there are approximately 1.5 million less people employed in the U.S. today than one year ago. When the $800 billion stimulus bill was passed in February 2009, the Obama administration claimed it would create 3.5 million additional jobs. There seems to be some inconsistency between the hype and what has actually taken place. Is it any wonder that the American people don't trust the numbers coming out of Washington?

Disclosure: None relevant.

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

Stocks Experience Irrational Exuberance on Employment Report

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


U.S. stocks rallied strongly on Friday because of the February employment report. In what could only be described as the latest episode of the emperor has no clothes or more appropriately the emperor's people have no jobs, the Dow Jones was up 122 points (1.2%), the S&P 500 up 16 points (1.4%), the Nasdaq up 34 points (1.5%) and the small-cap Russell 2000 up 14 points (2.1%). Oil rallied close to 2% and gold was flat on the day. Bonds sold off. One major media outlet after another trumpeted the reported loss of 36,000 jobs as good news in their Friday and weekend coverage, as did the politicos in Washington. Wall Street was jubilant.

The media clearly wants to tell the story of a recovering economy and will be doing so even if there isn't any evidence to back that viewpoint up. The story of course is coming directly from the U.S. government during a congressional election year. The government writes detailed press releases for each economic report and in those it presents the rosiest scenario possible. It is not going to go out of its way to point out any bad news, but spins the story to make our political leaders look good. Analyzing the numerous detailed and at times poorly laid out charts in the economic reports is a time consuming and difficult process, but is the only way to find out what is really going on.  For those who are interested, the next time there is a major economic news release, look at the time stamp (the moment of publication) on the articles from the major news services. I have seen time stamps of 8:30AM for a news release that took place at 8:30AM. This is merely a reprint of the government's best of all possible worlds press release. This is the only news that most media outlets report.

Looking at the details and footnotes of February's employment report painted an ugly picture of the U.S. job situation. In addition to the 1.2 million census workers that seem to have been placed in the Business and Professional Services category over the last several months, instead of the Government category where they belong, the seasonal adjustments were substantial and made the headline numbers much better than the real numbers. The actual unemployment rate (known as U-3 in the report) was 10.4%, but this became the reported 9.7% through the magic of adjustment. The unemployment rate that takes into account forced part timers and some discouraged workers (known as U-6 in the report) was actually 17.9%, but this became a still whopping 16.8% for seasonal reasons. Does this sound like good news?

For those who want to see the numbers themselves, Table A-15 (yes, there are a lot of tables) of the February Non-Farm Payrolls report can be found at: http://www.bls.gov/news.release/empsit.t15.htm.

The snowstorms in the East during February were specifically used to imply that the employment numbers were actually much better than they appeared. The BLS in its press release said it couldn't calculate their impact (as if it has never snowed in the United States previously). The spin coming from Wall Street was that there must have been huge job losses, which could have taken place in construction, and this meant the 36,000 job loss number would have been a gain otherwise. This is completely implausible. It could only have happened if there were a lot of workers that were going to be working during that time (there weren't, construction employment has fallen severely over the last two years) and couldn't because of the weather and that the numbers didn't already account for this problem through seasonal adjustments (they did). Furthermore, snow removal is frequently done by temporarily employed workers and this would have added substantially to the employment numbers, not subtracted from them. Moreover, it is unlikely anyone fell off the employment rolls as far as the government was concerned because of the snowstorms. Any regular worker who got paid for at least one-hour during the two-week survey period was considered to be employed.

Job losses in the U.S. have been a regular occurrence for the last couple of years. The only exception recently was in November 2009, when the numbers became positive because of after the fact adjustments. While job losses are bad, small job gains are also bad. The U.S. needs to create up to 200,000 additional jobs each year to employ people entering the labor force. Things will really have turned around when that happen and the jobs are from private industry and not the government. Wall Street's reaction to the February employment report indicates more than snow was being shoveled recently.

Disclosure: None

NEXT: Watch What China Does and Not What It Says

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

Census Hiring Used to Manipulate U.S. Employment Numbers

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


According to the Financial Times, the U.S. is hiring 1.2 million census workers for the 2010 national head count that starts in April - twice as many as were needed for the 2000 census. While census workers are government employees, they do not appear to be showing up under the government category in the monthly non-farm payrolls employment report (hiring began by March 2009). The Bureau of Labor Statistics appears to be counting these temporary jobs in the Business and Professional Services category. As a consequence, the employment numbers make the U.S. economy look much better than it really is.

The March employment report indicates that the U.S. lost 36,000 jobs in February and the unemployment rate was 9.7% if certain discouraged and forced part-time workers are not counted (unemployment would be 16.8% if they were included in the numbers). Any job loss indicates an extremely weak economy, but so does a small job gain. Since new workers are always entering the labor force, the total number of jobs available needs to continually increase, by as much as 200,000 a month by some estimates, in order to maintain employment stability. A lesser number should lead to a higher unemployment rate. Nevertheless, unemployment held steady in February and actually dropped significantly in January when 26,000 jobs were lost. Interesting, to say the least. Apparently two plus two doesn't always equal four.

Examination of the detailed numbers within the monthly employment reports reveals that the lower rate of job losses in the last several months can be attributed to the hiring of large numbers of temporary workers in the Business and Professional Services category. In February, a net 47,500 such workers were hired, in January it was a net 50,200 and in December 2009 a net 49,700.  The numbers are remarkably even and that makes them look like part of some planned operation.  A footnote indicates that these temp workers include hiring in 'other' industries not shown separately. At the same time, government jobs supposedly decreased by 18,000 in February and decreased by 26,000 in December 2009. If the 1.2 million census workers were being included in the government employment figures, this would indicate massive lay offs have been taking place elsewhere in the government. Surprisingly, it doesn't seem that any such lay offs occurred. So where are the census workers in the U.S. employment reports?

Everyone knows that increases in government jobs don't indicate a recovering economy. It is also common practice for businesses to hire temporary workers in the early stages of a recovery and then permanent workers later on. If the federal government's statistical operatives placed temporary census workers in the Business and Professional employment category, it would certainly make the U.S. employment picture look much better than it really is. Regardless of where the census workers are being hidden in the statistics, their jobs are temporary and should completely disappear by the fall. U.S unemployment will increase by 1.2 million when that happens. It's not clear where the U.S. will get the jobs to make up for the loss.

Disclosure: None

NEXT: Stocks Experience Irrational Exuberance on Employment Report

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

U.S. Employment Report: 617,000 Extra Unemployed in 2009

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


The Bureau of Labor Statistics (BLS) just revised its figures for 2009 and these now show that there was an extra 617,000 jobs lost in the U.S. economy last year. This works out to 51,000 more jobs lost on average per month than the U.S. government reported. Since there is no reason as of yet to think the Bureau is doing a better job in 2010, investors might want to subtract this number from future employment reports to get a more accurate read of what is really going on in the U.S. labor market.

The numbers being reported are bad enough as is. January Non-Farm Payrolls showed a loss of 20,000 jobs (perhaps that should be minus 71,000). According to the Bureau's recent numbers, jobs have been lost every month since the recession began in December 2007, except for last November. While the job losses for the other eleven months of 2009 were revised to show a greater loss of 38,000 to 101,000 jobs, November was inexplicably adjusted upward by 60,000. One major media outlet emphasized this one positive number while neglecting to mention that December had an extra loss of 65,000 jobs, which more than offset the increase in November.  Something similar happened in the December 2009 employment report where an extra 15,000 jobs appeared in November, but at the same time 16,000 jobs disappeared in October. Some might find this activity an indication of manipulation.

With today's revisions for 2009, the U.S. government now admits that 8.4 million jobs were lost during the recession. Even though there was more than an extra 600,000 people who lost jobs in 2009 than was previously acknowledged, the BLS reported that the total number of unemployed decreased and that the unemployment rate fell from 10.0% in December to 9.7% in January.  The BLS specifically stated that the "number of persons unemployed due to job loss decreased by 378,000 to 9.3 million". They further stated, "In January, the civilian labor force participation rate was little changed". Those who took first grade arithmetic might be puzzled by these highly inconsistent numbers and statements.

The key to how well the U.S. economy is doing is how many jobs are being created in the private sector. To get a ballpark figure, investors should not just subtract the 51,000 job error rate from the BLS monthly numbers, but also the number of jobs that the government has created - reported as 33,000 in January. This would indicate that the private sector lost 104,000 jobs last month. It has been more than two years since the recession began and the U.S. economy is still bleeding jobs, although the government is doing its best to hide the true extent of the problem. To actually reduce unemployment, the U.S. economy will have to add 200,000 or more jobs a month to compensate for new entrants into the labor force and the return of discouraged workers. There is no reason to believe that this will be happening anytime soon.

Disclosure: None

NEXT: U.S. Consumer Credit - Being Held Up by Government Loans

Daryl Montgomery
Organizer,New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.