UNEMPLOYMENT RISES AS WASHINGTON CONTINUES TO DRINK THE BANKS’ KOOLAID

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OBAMA’S BASIC WRONG-HEADED VIEW OF CAPITALISM TAKES ITS TOLL

EDITOR’S COMMENT: It’s pretty simple really. We were able to predict that the economic recovery would stall and head south not because we are genius economists but because we can do arithmetic. The basic flaw in economic policies is Wall Street. There, as the finance capital of the world, money is supposedly provided to small and large business for innovation, growth and expansion. Instead, that engine is dead in the water as Wall Street realized that (1) they could keep the money instead of providing it to an economy badly in need of capital and (b) they could control government and increase their profits 100 fold by NOT doing what Wall Street is supposed to do — provide capital to a capitalist society.

Our economic success arises from two factors — the ability of Wall Street to provide money to finance businesses, and the ability of consumers to pay for things. Both are virtually nonexistent now. Government efforts have been focused away from adjusting inequality of wealth produced by outright fraud, and away from freeing up the capital that Wall Street is still producing, but keeping for itself to create “trading profits.” Having deprived the economy of the oxygen it needs to sustain itself and grow, the policies are producing higher and higher unemployment — on and off the books. And even those who are technically employed, are receiving wages far below the level necessary to produce massive purchasing power from the consumer sector. Consumers are lowest on the totem pole and they are being trashed despite criminal acts of theft, forgery, fabrication, perjury and suborning  perjury.

Job Growth Falters Badly, Clouding Hope for Recovery

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The United States economy added a meager 18,000 jobs in June, up from a gain of a revised 25,000 jobs in May, the Department of Labor said on Friday. The unemployment rate rose to 9.2 percent from 9.1 percent in May, the department said.

The increase in nonfarm payrolls came mostly from private companies, which added 57,000 jobs in June, from the revised 73,000 they brought on in May, the monthly report said. In general, government agencies have been shedding jobs as they grapple with budget pressures.

The report said that 14.1 million people were out of work in June, among them 6.3 million who have been jobless for six months or longer. In May, the total number of unemployed people was reported as 13.9 million, with the long-term unemployed at 6.2 million.

The numbers showed the continuing challenges of adding jobs to the economy even at a rate that keeps pace with population growth, two years after the official end of the longest economic downturn since the Great Depression.

Friday’s report showed that 39,000 government jobs were cut in June. The previous month, 28,000 local government and 2,000 state jobs were cut, as states and towns dealt with tighter budgets.

Analysts surveyed by Bloomberg News predicted that the report would show the economy added 105,000 nonfarm payrolls in June and that the unemployment rate would remain unchanged from May, when it had edged up from 9.0 percent in April.

The monthly jobs report is seen as a gauge of how well the nation’s job market is restoring the more than eight million jobs lost during the recession.

The Labor Department said that following gains that averaged 215,000 jobs per month from February through April, employment has been “essentially flat” for the past two months.

Some of the economic data for the nation has been showing a general improvement in recent weeks. Consumers, still struggling with debt, are seen as slowly recovering from a hesitation to spend, a turnaround that could inspire more hiring. A survey of 25 of the nation’s largest retailers on Thursday showed a surprising vibrancy, with sales in stores open at least a year up 6.5 percent in June.

But other recent reports have disappointed, such as those tracking trends in consumer sentiment, factory sales and the housing sector. Economists have ratcheted down their forecasts for the overall growth of the economy, with some estimating an annual rate of about 2 percent or slightly more for the second quarter.

On Thursday, the government said initial jobless benefit claims declined last week, even though they remained above the 400,000 for the 13th consecutive week. Also, a survey derived from company payrolls by the company ADP showed on Thursday that the private sector added 157,000 jobs in June, above the 70,000 that economists had predicted the survey would show.

The Labor Department’s report on Friday showed that payroll cuts hit some sectors harder than others in June. Most of the increases in nonfarm jobs came from leisure and hospitality businesses, where 34,000 jobs were added in June, and in the professional and technical services sectors, which added 24,000 jobs. Manufacturing, which lost a revised 2,000 jobs in May, showed a gain of 6,000 jobs in June.

The average workweek was 34.3 hours in June, compared with 34.4 hours in May, while average hourly earnings fell 1 cent to $22.99 in June.

The median length of time the unemployed had been out of work was 22.5 weeks in June, up from 22 weeks in May.

10 Responses

  1. I told my 15 year old daughter today that she is living in a very historic time…one that won’t even start to be in the history books until she’s in college…if even that soon, at the rate this “cover-up” is going…”The Great Fraud” or whatever they end up calling it will go down as the biggest crime ever known…

  2. Let us keep our houses that have screwed up titles thanks to fraud, and put us to work re-building the infrastructure of America which is FALLING APART!!!

  3. 18,000 new hires as repo,men?, pawn men?, collections men?
    And how many new unemployment claims?

  4. Two Tales of One Country: China

    The 1st is NYT July 7, 2011–basically describing a ballon stretched beyond means to repay by any measure —well beyond Greece’s dismall situation.

    The 2nd is a manufactured tale describing one side of the balance sheet without discussion of how all the bubble will be paid for—WSJ’ Murdocumentary.

    China debt

    http://www.nytimes.com/2011/07/07/business/global/building-binge-by-chinas-cities-threatens-countrys-economic-boom.html?_r=1

    China vs. America: Which Is the Developing Country?
    From new roads to wise leadership, sound financials and five-year plans, Beijing has the winning approach.
    By ROBERT J. HERBOLD
    http://online.wsj.com/article/SB10001424052702303544604576430162195057084.html?mod=ITP_opinion_0

  5. After examining the various seemingly contradictory facts: that total jobs are declining, particularly govt, average pay is declining, but the number of unemployed are not rising in tandem; a few thoughts in respect of demographics come to mind.

    1st, most govt jobs involve defined retirement benefit plans which claculate future benefits off of the final 3 years’ pay–perhaps kicking out the lowest. For the feds, pay has remained frozen in the last 2-3 years and the prospects of a decline are very good–usually at this stage of the game, the private sector would be cutting pay by 5% so it would be almost a shock if the budget changes do not go there too.

    So any fed employee with the time has an incentive to get out now. And when they will not even buy pencils and copy paper it it can get tough to just sit there and twiddle your thumbs. Most think that they can spin the revolving door and at least land on their feet. The sooner one leaves –due to implicit age discrimination, the better the chance of landing something. So Im sure there were many that took retirement early or not and are trying to get contract work–and I emphasize trying.

    Similar considerations operate at the state level. Also large companies. in the latter case, they practically push em out the door at 50-55 –lucky if you make 55 and eligible for health continuation.

    In all cases, the HR folks put subtle pressure on —-like promoting the kid you hired to be your boss. Tough. Various humiliating tactics. Hope they use that on the HR folks too–

    The average wage drop is consistent with this–out goes the 55 –59 1/2 year old–in comes the kid whose idea of work is to text only half the day.

    Thus you should see productivity dropping too as the baby-boomers –even with poor health exit their higher paid jobs. Problem is the kids take a week to figure out an issue the old man took 5 minutes to recognize–even if it was between dr apptmts. The whole strategy only worked if there was a mix and the kids could ask for help and direction–but the HR folks as we all know are the ones that were social studies, pshych and history literature majors that just couldnt do anything else but be HR morons. Sorry HR folks if it hurts–its deserved. You cant add–you dodged those tough courses so of course you have no clue what those people do that actually generate revenues. As wages decline and productivity drops there are less income taxes paid and prices rise for less value.

    But this was expected for 30 years-demograpics were predictable–the idea was to be more efficient by leveraging with technology so 2 workers could replace 3 and things continue. The unexpected was that there would be an explosion of untrained and generally deficient illegal immigrants–that think assimilation means you lear Spanish.

    They put increased burdens on social services from medicaid to jail population–but contribute proportionaletly less of everything but mouths to feed. More HR engineering.

    If this business model worked, Mexico and central America would be economic powerhouses—but the business model we actuallu did import was 0.1% of the population owns everything and the other 99.9 does car washes.

    The new minds–fully 50% born today–have little chance of advancing beyond where things are today-we have topped out–like the space program–the good days are past and the new kids look at it all and wonder how they did it—like it or not –we are entering a new Dark Age. Globally—do not look to a chinese miracle –Goldman taught them to borrow beyond their means too.

    As the local govt debt for the infrastructure buying spree comes due—they have no hope of paying cause nobody is buying their stuff
    —so the trillions they owe off balance shhet comes due and the Chinese govt [national] has to ask for its $$$ back to meet debt and payroll at home—-rather than rolling it as they have.

    So things go South fast–except the illegals—-no more ability to for feds to borrow from China–those folks want REPAID–so how —run the printing presses double time. The future is clear and its not pretty and its more than just houses causing it—and even if home values appreaciate –so does food and meds and everything else–except pensions. and pay.
    So we see services falling and tea partiers getting more pissed cause guess what the overall cost of everything from getting a license plate to a permit to operate is the same–but a lot slower——because they promised that 30-35 years of work for 2/3 of private pay deserves about 5-10 years of pension before you croak.

  6. angry & not taking it. Obama said on Friday after the bad unemployment news that the USA lost 1million construction jobs. And if Congress would fund Construction jobs to rebuild the infrastructure he would make up for the loss of 1 Million jobs.

    At least Obama has somebody to blame.

    Obama and Boehner need to be held accountable and should loose their current government job.

  7. ooops , correction – the kool-aid is all thats left…
    the other is not entirely without merit

  8. the housing industry is the “only” industry that is domestic and large enough by volume to have any meaning to economic growth or sustainability . This has been ignored the gov & ws , as the profit was drained by fraud as rapidly as created,leaving in its wake a void that can not be filled by ANY OTHER industry.This country has no other major GDP other then debt. The upper 10% living on this “debt” is the major suspect in the “largest crime in history”, the rest of the collapse will follow accordingly as there is no industry prospect of gdp to fill the void. the FIRE sector is to blame , the Gov is complicit & destructive as a partnership of these 2 is recipe for disaster .
    the kool-aid is all thats lets….fuk em!

  9. 22 dollars an hour? Where? None of my friends, and there are many, make anywhere near that, even if they DO have jobs now. Many of my friends and I worked at Senco Fasteners. They sent all serious manufacturing and manufacturing jobs directly to China. I can prove that or I would never print it. I’m just so nieve, when did it become a good idea to do business with a politcal machine, communism, that want’s the U.S. dead. We have been doing it for some time now, and finally, it is strangling this country. ALL free countries it seems. We can thank Nixon for opening up the Chinese connection. (not dising any particular party mind you). The ruling party is now Wall Street. Globalization has been such a good idea for this country. The corruption and law breaking at high levels is amazing. Look at the demise of World News. How may peeps are losing jobs becuase these crooks running for cover? The rich have way to much power. But only when they get caught is it obvious. How can we take back wall street? Or least make it just a minor factor? I for one am sick of watching gas prices go up and down and NO ONE really knows why. I drive with my gas low light on most of the time now. Screw the theifs.
    And mortagage companies will soon own the majority of property in the U.S. Sorry about the rant. I’m just one pissed off American. Go Thomas Jefferson

  10. I am really getting sick about this whole cycle of what is going on here, over and over, the same thing.

    The deal appears to be designed such that it could and may still yet bring this country down and now they continue to offer these scant programs which buys them all the time they need to do just that. The question is why? Why is not the government doing something – Why? The Congress- why? the AG’s – Why

    By not addressing the housing demise in 2007 in the correct way and then with a new administration in 2009 (who was taking advantage of the crisis) did absolutely nothing to coming up with a realistic plan – we could have been out of this mess three times by now, people would not have lost their homes – or their jobs and it would have been a reasonably quick recovery in spite of the fraud, etc. School children running the affairs of the United States – Wow

    And now the US is giving out more candy to other nations when we can’t even manage our own affairs – I can think of no quicker way to bring this economy to its feet.

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