Archive for December 2nd, 2011

December 2, 2011

The Rich Achievers are villains and the Rich Mimickers are Heros


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December 2, 2011

Good News: Government Jobs are down. This is the real number that counts.


The headline should read: Good News is Government payrolls decreased by 20,000 in November, including a 16,000 decline on the state and local levels.

Private sector jobs increased by an anemic 120,000 well under what is needed to sustain the necessary growth to get us out of this recession.

Additional good news for our savings account values is the Fed will shelve advocating QE3, at least for the next few months. The most destructive force affecting our personal wealth is when the government, no matter Democrat or Republican, prints, borrows and taxes to feed the growth of the dependent. It is the “Cycle of Marx” that the far Left insidiously legislates into our city, state and federal tax system aimed at transforming our economy into a centrally planned socialist modal that has prolonged the worse recession since Jimmy Carter.

The increase in employment reflects the natural growth of our economy. The natural growth of the U.S. population has created demand and jobs. Plus, Christmas season always induces employers to hire.

This recession is unprecedented and at this point in its timeline the real test of the recovery is how many workers drop out of the job markets. This is intentionally confusing because all this means is their unemployment benefits have stopped and they are no longer counted in the unemployment figures thereby distorting the real number of unemployed. If an unscrupulous President wanted to cut off the unemployment benefits a year before his election then a corresponding number of people would drop off the unemployment figures creating a perception of an improving economy. This is why the “participation rate” is so important at this point in the rescission time line.

The drop in participation rate is significant in that had the labor force remained steady, the jobless rate would have dropped to 8.8 percent, according to Citigroup calculations. If the labor force had followed trend growth, unemployment would be at 8.9 percent.

Employment at service-providers increased 126,000 in November, including a 50,000 gain in retail trade as companies began hiring for the Christmas shopping season. The number of temporary workers increased 22,300.

Macy’s Inc. (M), the second-biggest U.S. department-store chain, increased mostly part-time staff by 4 percent for the Christmas shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., said it would add 5,500 mostly temporary workers.

Average hourly earnings fell 0.1 percent to $23.18, today’s report showed. The average work week for all workers held at 34.3 hours.

The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, rose to 43 percent from 42.4 percent.

The so-called underemployment rate — which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking — decreased to 15.6 percent from 16.2 percent.

Fed Chairman Ben S. Bernanke and his colleagues last month cut economic growth forecasts for 2012 and said unemployment will average 8.5 percent to 8.7 percent in the final three months of next year, up from a prior range of 7.8 percent to 8.2 percent.

Growth in the U.S. and other advanced economies “has been proceeding too slowly to provide jobs for millions of unemployed people,”

Still, factory payroll growth slowed and construction employment dropped.

Obama’s efforts to transform our economy to a centrally planned modal includes forcing business to go Union. One of his targets has been the Boeing Co where he tried to block the company from opening a huge factory in So. Carolina which is a “Right to Work” state.  Boeing Co. (BA), the largest U.S. aircraft maker, is expanding their workforce hiring about 100 machinists a week as it boosts production by about 60 percent over three years to whittle down a backlog that now stretches to nearly 4,000 aircraft.

“Overall, the continued modest employment gains reflect an economy that plods along at an uninspiring pace,” Kathy Bostjancic, director of macroeconomic analysis at The Conference Board, said in a statement. “These modest job gains are still not enough to propel economic growth to a sustainable 2 percent-plus growth path.”

“When the unemployment rate declines, we want to see both employment and participation increase as discouraged workers return to the labor force. Today, we got the former, but not the latter, making the 0.4 percent drop look a bit suspect,” Neil Dutta, US economist at Bank of America Merrill Lynch, told clients. “We would not be surprised to see the unemployment rate give back some of its decline in the coming month(s).”

Traders offered little reaction to the report. Futures already had been indicating a positive open but lost some ground in the ensuing minutes after the Labor Department report hit the tape.

“At this pace of job growth, it will be more than two decades before we get back down to the pre-recession unemployment rate. Moreover, a shrinking labor force is not the way we want to see unemployment drop,” said Heidi Shierholz, economist at the Economic Policy Institute. “At this rate of growth we are looking at a long, long schlep before our sick labor market recovers.”




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