By Reginald Kaigler (DEMCAD)
"Unemployment Slips to 8.6% as Private Sector Adds Jobs Well"
The headline read,
I was way off on my prediction on the U3 unemployment reaching 12% this year. We didn't see a new wave of layoffs (in the private sector). The official unemployment number actually dropped. However, the real unemployment has not dropped. A lot less people can get benefits, many aren't, even counted. Hiring in the private-sector grew by a 140,000 jobs, the public sector cut 20,000 jobs. What kind of jobs where created this holiday season, 50,000 jobs in retail, 22,000 in hospitality, 33,000 in business service. Does business service involves in actual production of any goods? Where most of the hospitality jobs created that type of work that you can support a family on? Where retail stores hiring full-time or where they offers $8 or $9 bucks an hour, part-time/seasonal with no benefits?
Hourly earnings dipped by 2 cent, while salaries increased by 1.8%, neither could keep up with inflation. In a nutshell, I was wrong about the timing of the new wave of layoffs, but only time will reveal if I am wrong about the event happening at all. Technically, we already saw a major layoff in local, county and state government.s And we did see a lot of Americans shopping on Black Friday. The National Federation Retail claimed that sales increased 16% from last year. Of course, many stores were shut down since then, so the remaining stores would naturally improve. And I should warn you that the 16% is based on a survey and not hard cash. This year, they polled 3,826 consumers and calculated that Americans spent $$52.4 billion on Black Friday weekend.
2011 Black Friday Sales
Nevertheless, many Americans spent their last penny this holiday season on flat screen TVs,video game consoles, toys and movies. I have no aversion to any of those products, but I realize that it is more important to have basic items before you acquire the amenities. For example, doesn't it make more since to have extra food and water for an emergency before you buy another flat screen TV? And why is your girlfriend walking around with expensive jewelry when she doesn't even have a gun to fight off a mugger or rapist? Some people are so tapped out that they are trying to get tax loans to buy presents this holiday season. There's nothing wrong with buying toys and TVs for Christmas, just make sure that your family has the basics for responding to an emergency.
The government numbers are very deceptive. The official unemployment number is really just one of the the government's unemployment numbers. It's called the U3 number, which only calculates how many people are unemployed for 15 weeks or longer. But it excludes part-time workers who want to work full-time and many discouraged workers. The U6 number (15.6% as of November 2011) includes these groups. However, but government numbers exclude the chronically unemployment. The government keeps the unemployment number down by excluding a lot of the unemployment and simply claiming that they are no longer apart of the workforce.
The duration of unemployment tells the story. 59% of the unemployed have been jobless for at least 15 weeks. 43% of the unemployment have been unemployed for over 27 weeks as of November 2011. The employment to population ratio has still remained very low.
BLS Unemployment numbers
In 2001, 64.4% of the American population was employed, now that number is down to 58.5%. This government number is something that doesn't get reported because there's no way to spin the data.
Employment to Population ratio
In conclusion, the recent data is a reflection of a large portion of the unemployed population being re-classified as non persons, people without jobs, but not apart of the labor force. It's just smoke and mirrors.
Check out my video analysis below and tell me what you think.