Recession 2013 Looks More Likely After Weak Jobs Report
Every politician promises "more jobs" for the American people. This has been the foundation of virtually every speech at the conventions for both parties.
But what we really need are "more quality jobs" – especially if we want to steer the country away from Recession 2013.
Unfortunately, quality jobs don't seem to be around.
Last Friday's U.S. jobs report showed that only 96,000 new jobs were created in the United States in August when 130,000 were expected. That's dismal enough, but a closer look at the numbers shows just how bad U.S. unemployment is.
Turns out the biggest job increases have been in food services and drinking places, which added 28,000 jobs in August and 298,000 over the past year.
MIT labor economist David Autor said posting gains in areas like these doesn't translate to sustainable, quality job growth.
"They're numerous, but they don't tend to be highly paid," said Autor. "They don't have a lot of job security."
Fiscal Cliff Could Cost You Your Job
While Americans stash extra cash to prepare for the economic effects of the looming fiscal cliff in 2013, another more immediate concern has developed: How many people will get laid off as companies brace for spending cuts and tax hikes?
The fiscal cliff will pack a double whammy to some businesses. Companies in certain tax brackets will be paying more to Uncle Sam, while some will see their government funding disappear.
The substantial fiscal cliff effect has prompted firms to rein in spending, delay projects, defer bids – and cut staff.
In fact, a study last month from Ernst & Young, the National Federation of Independent Business, the U.S. Chamber of Commerce and other business advocates revealed the fiscal cliff could slash 710,000 jobs from the already beleaguered job market.
- The Next U.S. Jobs Report Could be Awful for President Obama
June U.S. Jobs Report Ends Bleak Second Quarter
June's U.S. jobs report released today (Friday) deflated the brief celebratory mood that followed Thursday's upbeat employment data, and ended a second quarter packed with weak economic figures.
The U.S. Labor Department reported Friday that employers added a skimpy 80,000 jobs in June, much less than analysts' estimates of 100,000-125,000. The jobless rate remains at an elevated 8.2%.
The fresh data concludes a dismal second quarter.
In the first quarter of 2012, the average number of monthly jobs created was 226,000. In the second quarter that average fell to a measly 75,000. While job gains in April and May deviated little from estimates, June's data was significantly lower than anticipated.
"Today's report is the rotten cherry atop the half-baked economic news of the last few months," TD Bank's Chris Jones said in a note.
Roughly one-third of the jobs added in June were in temporary services. Manufacturing added 11,000, marking its ninth straight month of gains, while growth in factory jobs dropped off sharply in the second quarter. Healthcare jobs grew by 13,000 and financial services added 5,000. Meanwhile, retailers, transportation firms, and the government slashed jobs.
Friday's lackluster report came on the heels of some encouraging data.
On Thursday, ADP's employment report showed that private employers added 176,000 jobs in June — far exceeding economists' expectations of 95,000. Small businesses and service firms were responsible for most of the gains.
Another optimistic sign Thursday was the decline in the number of first-time applicants for jobless benefits. First-time claims dipped by 14,000 to 373,000, while the four-week average slid by 1,500 to 385,000.
Any optimism had faded Friday after the U.S. jobs report came out. The Dow Jones was down more than 180 points by noon.
Recession 2013: This Report Shows We're Already Headed There
In fact, former President Bill Clinton said he thinks we are already in a recession – and that was before the latest U.S. unemployment numbers were released, painting an even gloomier picture.
By now most of you have heard about the awful numbers in the discouraging U.S. jobs report for May, where only 69,000 jobs were added – nowhere near the 150,000 expected.
But what's worse about the U.S. jobs report is the trend of long-term unemployment.
Even though the national unemployment rate has dropped from its October 2009 high of 10.1% to its current level of 8.2%, the long-term unemployment levels have not seen a similar drop.
Without improvement in these numbers, fears regarding another recession will become reality.
How U.S. Jobs Trend Will Spell "Recession 2013"
Long-term unemployment, measured every six months, reached a peak of 46% of the unemployed population during May 2010.
That number has only fallen to 42.8%, or 5.4 million of the total unemployed, and has risen of late.
- April's U.S. Jobs Report a Far Cry from Where We Need to Be
What U.S. Consumer Spending Data Is Telling Us
The markets slid yesterday on news that U.S. consumer spending increased by 0.3% in March, while income rose 0.4% over the same time frame. This is the first time since December we've seen income rise faster than spending.
I can't say I am entirely surprised.
As prices for "must haves" like gasoline and food continue to rise, consumers are digging into their savings to cope. This is not small potatoes, given that the average family saved a mere $38 out of every $1,000 in take home pay last month, according to the U.S. Commerce Department.
I can't help but have huge concerns about Team Bernanke's plan; no amount of stimulus is going to overcome the struggle most families are having – which is to boost savings and shed debt.
Here's the thing… if consumers can't save, then they can't buy. And if they can't buy, they can't build up the nation's wealth, which is predicated on consumer spending.
All three sets of figures in isolation really don't tell you much. But when taken together – spending, income, and GDP – they suggest our economy is too weak to put millions of Americans back to work, much less in jobs for which they are appropriately qualified.
The March Employment Report: Here's the Real Story with the U.S. Unemployment Rate
Fewer workers are marching in the unemployment line, but the March employment report shows that many are not yet returning to work.
U.S. employers added 120,000 jobs in March, pushing the U.S. unemployment rate down to 8.2%, the Labor Department reported today (Friday). Economists were looking for 210,000 jobs to be added in March, and the unemployment rate to stay at 8.3% as more discouraged workers reentered the job market.
Most market participants will have to wait until Monday to react to the disappointing numbers as exchanges are closed in observance of the Good Friday holiday. However, the bond market is open in a shortened trading session, and the Dow futures tumbled some 111 points following the release.
The less than stellar March employment report conflicts with several recent private surveys that show the economy is improving.
The March Employment Report Numbers
In the previous month, employers added 227,000, slightly more than expected. February capped the best six-month streak for job additions since the height of the financial crisis in 2008.
Michael Erwin of CareerBuilder recently told ABC News, "Thirty percent of employers we spoke to say they plan to hire full-time positions in the second quarter." That compares with 24% in the last survey three months ago.
Erwin added, "The numbers are going back to where they were pre-recession so that's good news employers are back to the table, they're looking to hire."
Jobless claims are now down to their lowest level in four years, after falling to 357,000 in the final week of March, the Labor Department said Thursday in advance of the monthly jobs report.
While the decline in unemployment insurance claims is good news, it does not tell the whole story.
ADP Employment Report: Job Gains Continue in March – But Still Not Healthy
The ADP employment report released today (Wednesday) showed more job gains for March as private companies continued hiring – but remain at a slower-than-necessary rate for a healthy recovery.
According to a report issued Wednesday by payroll-processing company ADP, the private sector added 209,000 jobs last month, pretty much in line with what was expected. That was slightly lower than forecasts for 217,000 jobs gained, and a decrease from 230,000 jobs added in February.
The number was slightly lower than the pace set in February. Industry analysts say the speed of adding jobs needs to move much faster to push unemployment down to a healthy level.
Small businesses, those with fewer than 50 employees, continued to make up about half of all private sector job gains, hiring 100,000 people.
Real Unemployment Rate Could Give Obama Heartburn in November
A quirk in how the U.S. government calculates the unemployment rate has made the data look better than it is, some Wall Street experts are saying.
But in a stroke of bad luck for President Barack Obama, that same quirk will mask real improvements to the U.S. unemployment rate over the summer and into the fall, damaging his chances for re-election.
The official Bureau of Labor Statistics (BLS) unemployment rate has fallen from 8.9% in October to 8.3% in January. The number for February, released today (Friday), held steady at 8.3%.
"We think that the improvement over the last few months dramatically overstates the underlying improvement," Andrew Tilton, an economist at Goldman Sachs, told Reuters. "You will not see that rate of improvement going forward."