unemployment
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Today's May Jobs Report: When Bad News is Good News
When bad news is good news for stock markets you know just how convoluted the current economic environment is.
According to the May jobs report out today (Friday), the U.S. unemployment rate ticked up to 7.6% in May from 7.5% in April, the first increase since the start of 2013. And, markets rallied on the news. The Dow Jones soared more than 200 points by mid-day.
Some will say the May jobs report was good news - thousands of out-of-work people returned to the work force, and the 175,000 jobs added beat expectations.
The reality is we're just treading water. And the labor force participation rate is still at 30-year lows.
But the real good news is the jobs report means more U.S. Federal Reserve support, which will fuel markets already hitting record highs.
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April Employment Report Begins to Show the Signs of the "Obamacare Effect"
Economists breathed a sigh of relief when the Labor Department reported a better than expected April employment report on Friday, but the details show cracks still remain.
Many of the job gains proved to be in lower paying fields and the average number of hours worked dipped.
In fact, April's report revealed the average workweek for private sector employees declined 0.2 hour to 34.4 hours.
The data also suggests The Affordable Health Care Act, aka Obamacare, is already having an impact on hiring since job growth has slowed most significantly among businesses with 50-499 employees.
This could be the reason why...
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U.S. Jobs Report: How Unemployment is Really 14%
Employers added just 88,000 jobs in March, according to the U.S. jobs report released Friday, hiring at the slowest pace since June 2012.
The number was a huge miss. Analysts expected a gain of 200,000.
"We all over shot it," Austan Goolsbee, former chairman of the Council of Economic Advisors in U.S. President Barack Obama's first administration, said on CNBC. "This is a punch to the gut. I mean, this is not a good number."
Since the government's way of calculating unemployment is frighteningly inaccurate, even with such a small amount of jobs added the unemployment rate fell from 7.7% to 7.6%.
That's because the labor force participation rate slipped from 63.5% to 63.3% -- the lowest level since 1979.
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January 2013 Jobs Report: 4 Reasons Unemployment Will Stay High
The U.S. Labor Department released the January 2013 jobs report Friday, showing the unemployment rate inched upward from 7.8% to 7.9%.
Employers added 157,000 jobs in January, short estimates of 168,000, which would have kept the unemployment rate stable.
The jobs report included some good news: Revisions to last year's data, customary in January, show the U.S. added 335,000 more jobs than initially reported in 2012, bringing the monthly average for jobs gained to 181,000 from the 153,000 initially reported.
Employment gains for November and December were revised higher by a total of 127,000.
Contributing most to January payroll increases were the retail, construction and healthcare sectors. The government continued to shed workers, a trend that began four years ago.
But the employment outlook remains bleak. Joblessness has proved persistent, with the unemployment rate stuck above an unhealthy 7% for more than four years.
"The good news is that January's employment gains, coupled with large revisions to the prior months, may translate into more consumer spending power. The bad news is that unemployment remains stubbornly high," said Kathy Bostjanic, director of macroeconomics analysis at the Conference Board.
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The Ugly Truth About the Promise of the JOBS Act
Last week I wrote about how the Jumpstart Our Business Startups Act (the JOBS Act) can be a pathway to funding brand new businesses as well as small operating companies to further American entrepreneurship and create jobs.
I even called the legislation, signed into law on April 5, 2012, a "light at the end of the tunnel" in terms of its potential to stimulate the economy.
But I also warned you there are elements of the Act that are bad, if not downright ugly.
So, let's take another look at the JOBS Act to see if that light in the tunnel is a freight train headed straight for us.
First, it's instructive to learn that the JOBS Act came into being, not as an original piece of legislation, but as an amalgamation of six House bills, four of which had strong bipartisan support.
What began as a series of bills proposed to facilitate "access to capital" and "capital formation" and incorporated those terms in their former titles, eventually were cobbled together to become the Jumpstart Our Business Startups Act, whose title highlighted this year's election mantra: it's about jobs, jobs, jobs.
Too bad there isn't anything in the JOBS Act that says anything about hiring anybody.
The Masquerade Behind the JOBS Act
Some of you might call me cynical for this, but another way to look at what the JOBS Act amounts to is to see it as a deregulatory push masquerading as a job creation scheme.
And therein lies the problem.
It's all well and good to make raising capital easier for startups and small operating businesses, but altogether disquieting to clear that path by weeding out investor protections that have been on the books for decades.
It's like dj vu all over again.
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The Good the Bad and the Ugly Truth about the JOBS Act
It's about jobs.
I'm not just talking about the upcoming election and who is promising to do more to stimulate the economy. The entire future of America depends on job creation.
There are good and bad reasons why there aren't enough jobs.
Jobs have been lost because of advances in technology. Jobs have been lost because they've been outsourced.
Jobs aren't being created because banks aren't readily lending to entrepreneurs and businesses, and entrepreneurs and businesses supposedly aren't hiring because there are too many regulations and the future is uncertain.
All the reasons why there aren't enough jobs in America can be argued from both sides. And, while that's being done, arguing isn't doing anything for the unemployed.
Fortunately, there is a light at the end of the tunnel.
There is a pathway open, and hopefully soon to be widened, that bypasses all the arguments and does what our bickering partisan politicians can't do, create good jobs in areas where American ingenuity has always outshined the rest of the world.
The Promise of the JOBS Act
The Jumpstart Our Business Startups Act or JOBS Act was signed into law on April 5, 2012 and is the single best hope America has of regaining its preeminence in the world.
The JOBS Act has good, bad and ugly elements...
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Are We Headed Straight for Recession 2013?
Fresh reports pointing to a slowdown in the struggling U.S. economy, coupled with worries of Europe's fiscal woes, have experts warning that Recession 2013 is inevitable.
The dismal and downtrodden jobs numbers, the elevated long-term unemployment levels, the ailing housing market and the looming "fiscal cliff" are all fueling recession fears.
Just last month, the nonpartisan Congressional Budget Office reported that unless lawmakers move to avert scheduled tax increases and spending cuts at the end of this year, a recession is likely.
This marked the first time the CBO has forecast a recession resulting from the fiscal cliff.
The CBO projected that gross domestic product (GDP) will contract by 1.3% in the first half of 2013 before growing 2.3% later in the year. Annualized, GDP would grow just 0.5% in 2013.
That forecast is an about face from January when the CBO forecast a 1.1% GDP growth in 2013 (if policies are not dealt with).
The report stated, "Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession."
Now other economic experts are saying the same.
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U.S. Economy 2012: Jack Welch on What's Stifling Job Creation
Excessive government regulation and uncertainty over tax policies are what's restraining companies from hiring, former General Electric (NYSE: GE) CEO Jack Welch said on CNBC last Wednesday.
Welch joins a large number of economists and pollsters trying to sort out why the U.S. economy in 2012 hasn't rebounded more strongly from the 2008-2009 recession.
In particular, everyone is trying to figure out why job creation has been so sluggish.
The U.S. economy added just 69,000 jobs in May. That's far below the 150,000 or so needed just to keep pace with new workers joining the labor force.
"We should be poised to do well, but we are getting hammered by political forces who won't deal with the fiscal cliff coming up," said Welch, referring to the expiration of the President Bush-era tax cuts and sharp reductions in federal spending due to hit in January.
Welch blamed an array of government agencies for cooking up more and more nitpicking rules. Such rules have little or no benefit, but hamper business owners and suppress job creation.
"These are the things that are going on every day. They add up," Welch said. "That's why we're not taking off."
Welch compared the current recovery to the Reagan Administration recovery in the mid-1980s. That recovery, once it got going, accelerated rapidly.
"If you look at 2009, and you look at the recovery we launched, we were getting into a traditional recovery," Welch said. "We had 4%, 4.5% growth until we started getting into regulations."
Jack Welch Not Alone in U.S. Economy View
The blunt talk from Jack Welch echoes data from several recent surveys of businesses.
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Dow Jones Erases 2012 Gains – What's Next?
The "sell in May and go away" approach panned out this year as the month was not merry for markets.
U.S. equities experienced a steep drop during May, enduring the worst monthly declines in two years. The Dow Jones Industrial Average fell 6.2%.
A good part of May's decline was blamed on the ongoing European sovereign debt crisis that has swelled of late and shattered investors' confidence. But things on the home front are far from ideal.
The flight from stocks flowed into the first day of June. The Dow plunged 274 points Friday, erasing all of the year's gains. Fueling Friday's fall was May's dreadful U.S. jobs report, which showed employers added just a trifling 69,000 in payrolls, less than half the expected 150,000.
The Standard & Poor's 500 Index and Nasdaq both plummeted more than 2%. The Nasdaq has given back more than 10% since its late-March peak.
Traders consider a 10% drop to be a market correction. Meanwhile, the S&P 500 is just a mere point above correction territory.
Just 17 of the 500 companies in the S&P index ended higher on Friday.
"The big worry now is that this economic slowdown is widening and accelerating," Sam Stovall, chief equity strategist at market research firm S&P Capital IQ, told the Associated Press.
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