Tuesday, April 6, 2010

Smoke, Mirrors, Reality & Unemployment

We are nearing a record in unemployment - though one would not know that from listening to the left touting 9.7% coupled with a monthly gain of 162,000 jobs as good news. But pull back the curtain and the news is dark indeed. This from an ETFGuide article at Yahoo Finance:

. . . For the third straight month, the seasonally adjusted U-3 unemployment numbers remained the same - 9.7%.

The Labor Department said employers added 162,000 jobs in March, the most since the recession began but below analyst's expectations of 200,000. This number includes the 48,000 temporary workers hired for the U.S. Census.

According to estimates by ADP, a payroll company, the private sector lost 23,000 jobs in March. This estimate does not include government employees. . . .

. . . [T]he real unemployment rate, even by the standards of the Bureau of Labor Statistics, is much higher. The U-6 unemployment number, as the real data is called, is at 17.5%, within 0.5% of its all-time high. This figure includes discouraged workers who've stopped looking, marginally attached workers, and workers that are forced to work part-time because full-time jobs are not available.

The post 2007 recession has eliminated 8.4 million jobs and rendered 15.7 million American's jobless. . . .

Before chiming in, consider what it will take to simply get back to a normal unemployment rate of 5%. This is mindboggling.

The current labor force of 154 million will increase by about 1.8 million over each of the next five years because of 'newbies' entering the job market. By 2014, the labor force will be around 163 million. A 5% U-3 (not U-6) unemployment rate would equate to 8.15 million workers without a job.

7.55 million jobs will have to be created to reduce the number of job-less workers from today's 15.7 million to 8.15 million. To accomplish this, there would have to be 125,833 jobs created each and every month over the next five years with no jobs lost.

The average monthly job growth over the past 10 years has been about 50,000. The average monthly job growth over the past 20 years has been about 90,000. Keep in mind that the 1990 - 2010 timeframe hosted the biggest bull market and economic expansion in history. Do you see a 1990s and early 2000s bull market around you? . . .

Read the entire article. And of course, Obama is not done warring on the economy yet, nor promoting market distortions. And the rising cost of energy hangs over our economy like the sword of Damoclese. There is no chance for a recovery under Obama. To the contrary, we will, I think, be lucky if things just don't get any worse between now and 2012. We are, as Instapundit noted, at a point where, should Obama duplicate the collosal incompetence of Jimmy Carter, it would be a best-case scenario.

No comments: