Bush's Jobless Recovery

[mhr]

Hi All,

The latest employment numbers were released today and the news is not good, 93,000 jobs lost in August. We learned from the FED yesterday that the jobless recovery is real. Additionally, the NY Federal Reserve Bank released a study showing that many of the lost jobs will never return.

The pResident can technically claim the economy is improving but that does nothing to help the 9 million Americans currently unemployed. Remember that by official policy of the Bush administration, outsourcing of good white collar jobs is condoned and encouraged. Linked article below.

Finally, for those that focus only on the unemployment rate, consider that the reported unemployment rate (U3) only reflects those collecting unemployment. If the economy was creating jobs faster than losing them, then movement in U3 would be a valid indicator of economic health.

However, U3 becomes a dysfunctional indicator as more and more individuals exhaust their unemployment benefits and are no longer counted in U3. That is why U3 can decline even though the job losses continue. In this situation the more reliable U6 measure should be used. The article on U3 and U6 is linked as well

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WASHINGTON (Reuters) - U.S. employers cut jobs in August at the fastest pace since March, the government said in an unexpectedly grim report on Friday showing Americans are struggling to find jobs even as other areas of the economy are recovering.

The number of workers on U.S. payrolls outside the farm sector slid 93,000 in August, the seventh consecutive month of declines, after dropping 49,000 in July. The number was far worse than the increase of 12,000 expected by economists.

"It's weak and the unemployment rate seems to be more of an aberration than anything else," said Steve Gallagher, economist at SG Cowen Securities.

Manufacturing jobs fell 44,000, the 37th straight month of decline, while service jobs tumbled 67,000.

The government said 10,000 people left the labor force, smaller than the drop of 556,000 in July, but still showing some job seekers are discouraged and abandoning their searches.

http://story.news.yahoo.com/news?tmpl=story&ncid=716&e=13&u=/nm/20030905/bs_nm/economy_jobs_dc

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WASHINGTON - The U.S. Federal Reserve has joined economists in cautiously suggesting the economy is showing signs of improvement even though it is not producing jobs.

http://www.nationalpost.com/financialpost/story.html?id=8FB1F890-F87A-495D-869F-A585FE4ECDAB

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SINCE PRESIDENT Bush took office, three million jobs have been lost in the United States, 2.5 million of those in the manufacturing sector. Now, a newly-released study from the Federal Reserve Bank of New York talks about the structural nature of many of those job losses.

The latest turn in the business cycle has been an economic paradox. Though the recession technically ended in November, 2001, payroll numbers continued to fall. Now, economists at the New York Fed say there is something different about this latest recession and recovery: Many of those jobs are not coming back.

“Unlike previous recessions, almost all of the increase in unemployment has been due to permanent layoffs — not temporary layoffs,” said Erica Groshen, and economist with the New York Fed.

http://www.msnbc.com/news/960489.asp?0cv=CB2

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The economy is in the throes of one of the most baffling "jobless recoveries" since the union movement created the first Labor Day more than 120 years ago in New York City.

Consider these facts: Employment growth at the moment is the lowest for any recovery since the government started keeping such statistics in 1939. The labor force shrank in July as discouraged workers stopped seeking employment. The number of people employed has fallen by more than 1 million since the "recovery" began in the fall of 2001. The upshot: Better throw a ballpark frank on the barbecue this weekend instead of a T-bone.

Yet the recovery is probably not vigorous enough yet to reduce unemployment much this year, or even well into 2004 from the jobless rate of 6.2 percent in July, economists figure.

http://www.csmonitor.com/2003/0829/p01s02-usec.html

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Business analyst Dan Corcoran got the ax in April, ending his 20-year career at a Buffalo technology company. Five months later, he has lost hope of matching his old $75,000 salary. Now his goal is to find a job without leaving town.

"My unemployment runs out at the end of the year," the 49-year-old Williamsville resident said. "I'm trying to stay in the Buffalo area, but I may broaden my search."

http://www.buffalonews.com/editorial/20030901/1051139.asp

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Executive search firms laid off recruiters and suffered through another trying year in 2002 and have little to look forward to this year, according to Boston Business Journal research.

Among the 25 largest executive recruiting companies with local operations, 16 saw their revenue decline in 2002, according to BBJ research. Only three generated the same or greater revenue.

In fact, 2002 marked the first time in more than a decade that the U.S. executive search industry saw two consecutive annual decreases in revenue, according to Joseph Daniel McCool, vice president and editor in chief of Executive Recruiter News, a Peterborough, N.H.-based industry publication.

http://boston.bizjournals.com/boston/stories/2003/08/18/story6.html

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You've been out of work for 18 months and know 15 others who are vainly job hunting. You suspect that the 5.8 (U3) percent unemployment figure for April is government propaganda.

In your world, things are much worse off. And, guess what, in your world, you're right.

The "real" unemployment rate for you is 9.8 (U6) percent. You can look it up. It's every bit as real as the 5.8 percent that was reported in the media. So what's the deal?

The deal is that there are six government-sanctioned definitions of unemployment. The six measures produce a broad range of unemployment numbers. For April 2003, the range was a scant 2.5 percent to a scary 9.8 percent.

http://www.kansascity.com/mld/kansascitystar/business/5962629.htm

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WASHINGTON: The Indian government and businesses have won a major assurance from the Bush Administration on the issue of outsourcing.

A senior US official has said Washington is against any attempt by state governments to legislate a ban on outsourcing on the lines of what is being considered in New Jersey and other states.

The official, US Trade Representative Robert Zoellick, gave this assurance in course of three hours of intensive talks with Indian Commerce Minister Arun Jaitley, during which they discussed subjects ranging from the movement of people to the export of Indian mangoes to the US.

http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?artid=22887

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