unemployment

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    The Week's Big Story Isn't in Wall Street's Losses

    Dow fell below 20

    By , Global Credit Strategist, Money Morning • @MichaelELewitt -

    After an "impressive" May jobs report, the Dow Jones Industrial Average (INDEXDJX:.DJI) ended its third consecutive week on a down-note, losing 56.12 points (-0.31%) on Friday while the S&P 500 (INDEXSP:.INX) also fell for the third consecutive week, dropping 3.01 points (0.14%) on the day.

    On the week, the Dow lost 161 points or 0.9% to 17,849.46 while the S&P 500 fell 15 points or 0.7% to 2092.83. For the year, the Dow has gained a mere 26 points, far less than 1%, while the S&P 500 has climbed by 33 points or only 1.6%.

    The NASDAQ Composite (INDEXNASDAQ:.IXIC) has done much better, ending the week basically flat at 5068.46; it is now up about 7% on the year as social media, biotech and tech stocks continue to rise.

    But the week's biggest story isn't on the big indexes...

Article Index

The Week's Big Story Isn't in Wall Street's Losses

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

Dow fell below 20

After an "impressive" May jobs report, the Dow Jones Industrial Average (INDEXDJX:.DJI) ended its third consecutive week on a down-note, losing 56.12 points (-0.31%) on Friday while the S&P 500 (INDEXSP:.INX) also fell for the third consecutive week, dropping 3.01 points (0.14%) on the day.

On the week, the Dow lost 161 points or 0.9% to 17,849.46 while the S&P 500 fell 15 points or 0.7% to 2092.83. For the year, the Dow has gained a mere 26 points, far less than 1%, while the S&P 500 has climbed by 33 points or only 1.6%.

The NASDAQ Composite (INDEXNASDAQ:.IXIC) has done much better, ending the week basically flat at 5068.46; it is now up about 7% on the year as social media, biotech and tech stocks continue to rise.

Gallup CEO Just Outted Government's False Unemployment Rate

By , Associate Editor, Money Morning • @TaraKateClarke -

Unemployment rate

The government's official unemployment rate is "a Big Lie," according to Jim Clifton, the CEO of 80-year old analytics firm Gallup. In a Feb. 3 op-ed, Clifton slammed the White House, Wall Street, and the media for celebrating about how unemployment is "down" to 5.7%.

Of course, here at Money Morning, we've called the "official" unemployment numbers cooked all along.

It's a good thing that Clifton is onboard with us - the more the merrier.

We want Americans to know there's a reason why they haven't "felt the recovery." Check out this breakdown...

July Jobs Report Confirms These Major Problems with U.S. Employment

By , Contributing Writer, Money Morning -

The July jobs report brings the total number of part-time jobs created this year to more than three times the amount of full-time jobs added.

Welcome to America: Land of part-timers...

The trend was pronounced in June when data revealed part-time jobs grew by a robust 360,000 and full-time jobs declined by 240,000. Friday's July jobs report was further proof.

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You can Figure out When the Fed Might Start Tapering

By , Money Morning -

Although you might think the markets simply respond any time Ben Bernanke sneezes, his "cold cycle" is not one of the indicators that will spell the slowing

and eventual cessation of the printing press at the Fed.

There actually is a mathematical formula used by the Federal Reserve to determine when to stop the presses.

I could give you the formula and it would look like this:

POP2 = [1-(%∆POP) m*m] *POP1.

Or, I could share the link to the Federal Reserve's Jobs Calculator in Atlanta.

This is the same calculator used by the Fed to determine when the jobs market and the unemployment rate will align properly. And when they do, it will signal to the Federal Reserve that it might be a good time to start tapering its $85 billion a month bond buying program.

This is what needs to happen: The economy will have to show new job growth.

The Fed is looking for the creation of 150,000 to 200,000 new jobs each month for 6 months. This is how we look now:

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Today's May Jobs Report: When Bad News is Good News

By , Contributing Writer, Money Morning -

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"

By , Contributing Writer, Money Morning -

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%

By , Money Morning -

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

By , Contributing Writer, Money Morning -

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 Good the Bad and the Ugly Truth about the JOBS Act

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

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?

By , Contributing Writer, Money Morning -

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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Election 2012: President Obama at the Mercy of U.S. Economy

By , Associate Editor, Money Morning • @DavidGZeiler -

U.S. President Barack Obama's chances for re-election in 2012 are increasingly tied to the fate of the U.S. economy, poll results show.

Meanwhile, presumptive Republican nominee Mitt Romney hasn't gotten as much benefit from the weak economy as one would expect - a sign of his inability to connect with voters.

The past month has not been kind to the U.S. economy - or President Obama's standing in the polls.

The barrage of bad news has included:

"The economy is going through a rough patch, and that more than anything is going to determine President Obama's future," said Ipsos pollster Chris Jackson in comments on a Reuters/Ipsos poll taken in early June. "People's unhappiness with the economy carries over pretty directly to the president's numbers, and we see those weakening."

In that poll, President Obama's job approval rating slipped from 50% in May to 47%, and those saying the country is on the wrong track jumped 6 points to 68%.

Meanwhile, Romney gained 6 percentage points in the head-to-head matchup, making the Election 2012 race a statistical dead heat (Obama 45%, Romney 44%).

Although President Obama's argument that he inherited economic problems too severe to fix in three years resonates with his liberal base, the moderates and independents likely to decide who sits in the Oval Office next year aren't so sure.

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U.S. Economy 2012: Jack Welch on What's Stifling Job Creation

By , Associate Editor, Money Morning • @DavidGZeiler -

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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