August 2010 Employment Numbers: Economy 200,000 jobs short of breakeven point – Unemployment rises to 9.6%

McAuley’s World Comments in Blue:

Companies add 67K workers, but jobless rate rises             AP

Thousands of Job Seekers Attend Job Fair In Detroit (Aug 2010)

WASHINGTON – Private employers hired more workers over the past three months than first thought, a glimmer of hope for the weak economy ahead of the Labor Day weekend. But the unemployment rate rose because not enough jobs were created to absorb the growing number of people looking for work.

Companies added a net total of 67,000 new jobs last month and both July and June’s private-sector job figures were upwardly revised, the Labor Department said Friday. [See my comments below]

Stocks surged after the report’s release. The Dow Jones industrial average rose more than 100 points in afternoon trading and broader indexes were all up. [Yes, after it was reported that 67,000 “net jobs’ were added and not lost … as was expected … wait until Tuesday when the vacation has ended and people return to their offices and digest the “true story” … please read on] ….

….. Overall, the economy lost 54,000 jobs as 114,000 temporary census positions came to an end. For the first time this year, the manufacturing sector lost jobs, down a net total of 27,000 for the month….

http://cbs5.com/wireappolitics/Companies.add.67.2.1894681.html

“Companies added a net total of 67,000 new jobs last month”…. no wait“Overall, the economy lost 54,000 jobs”… you cannot have a “net total increase” and “Overall, lose jobs” at the same time.

 Private companies “allegedly” added 67,000 jobs – there was no “net increase” as the economy, as a whole, lost a “net” of 54,000.

Remember that today, when the press and the Obama Administration claims that jobs have been “added”, the number includes the new “saved or created” concept. After all the numbers were “crunched”, including all the claims of “saved or created” … the economy lost a total of 54,000 jobs in August, there was “zero net jobs gained”. The net loss of 54,000 jobs includes the 67,000 jobs that were allegedly saved or created. But for the claim that there were 67,000 jobs “created or saved” the economy would have lost 114,000 total jobs in August. Once again, there was zero “net job increase” in July 2010.  

 The United States needs to “create” a minimum of 150,000 new jobs, “actual jobs” as opposed to imaginary or “virtual” jobs, each and  every month, to maintain an “employment equilibrium” – to have the economy keep pace with new workers entering the workforce – to have “zero change” in the unemployment rate – no increase – no decrease.  If employers eliminate jobs, the economy must create and equal number of new jobs, in addition to the 150,000 jobs needed to accomodate the new workers entering the work force, just to break even. The U.S. economy needed to create at least 1.2 million new jobs between January and the end of August 2010 to maintain an “employment equilibrium” for 2010. (8 months x 150,000 per month = 1.2 million). We are at least ½ million new jobs short of “employment equilibrium” for 2010 (even when we count all of the claimed “saved or created” nonsense jobs).

Query: With a short fall of ½ million new jobs to date in 2010, ½ million jobs short of keeping pace with new workers entering the workforce, never mind creating jobs to replace those jobs that have been lost, why hasn’t the unemployment rate changed (increased) since January 2010?  The January 2010 unemployment rate was 10%, today the Obama Administration claims our unemployment rate is 9.6%. If we haven’t created enough jobs to maintain an “”employment equilibrium” with the new workers entering the work force, how did our unemployment rate drop?

Example: In August 2010 the economy needed to create 150,000 new jobs to stay even with the number of new workers entering the work force. The economy actually lost 54,000 jobs …. so in August 2010 the economy was a total of 204,000 jobs short of breaking even ( 150,000 new workers entering the work force plus 54,000 jobs that were lost  in the month …).  

 The shortfall of ½ million new jobs means that the economy fell 40% short of creating enough jobs to maintain an “employment equilibrium”, never mind creating enough new  jobs to reduce the unemployment rate.

How has the Obama Administration kept the unemployment rate from rising? (How is the Obama Administration cooking the books?).

1). For every “new worker” who enters the economy without a job being created for them, the Obama Administration claims that 1 unemployed worker gives up their job search and leaves the work force. This is a fraud, but it manufactures  a false “employment equilibrium” for the press to report.

2). When the Obama Administration claims to “save” a job, the “save” can be a monthly event – a single individual working for a single employer can have the same job “saved” up to 12 times in a year. Not 12 jobs, 1 job 12 times. When 12 jobs are lost you cannot create a true “employment equilibrium” by saving 1 job 12 times, because that still leaves 11 unemployed people.

 Do I smell something burning… are those numbers done yet … shouldn’t someone stop cooking the numbers and look for some real solutions?

While I was reading various blogs today I noted an amazing number of wild claims about unemployment during G. W. Bush’s Presidency … these are the true facts and not some wild political claims:

Average Annual Unemployment Under G.W. Bush – all 8 years – 5.2 %

Highest Annual Unemployment Rate During G.W. Bush: 5.99 (2003)

Lowest Annual Unemployment Rate During G.W. Bush: 4.61 (2007) Just before the Democrats took over Congress …

B. OBAMA’S ANNUAL UNEMPLOYEMNT RATES:       2009   –  9.2%

                                                                                      Jan – Aug  2010   –  9.6%      

http://www.miseryindex.us/urbyyear.asp

Unemployment Numbers Hit 9 Month High – 500,000 File New Unemployment Claims

Employers appear to be laying off workers again as applications for unemployment insurance reached the half-million mark last week for the first time since November. Initial claims for jobless benefits rose by 12,000 last week to 500,000, the Labor Department said Thursday.

It was the fourth increase in the past five weeks and evidence that the economic recovery has weakened. Homebuilders and other construction firms are laying off more workers as the housing sector slumps after the expiration of a popular homebuyers’ tax credit. State and local governments are also cutting jobs to close large budget gaps.

“This is obviously a disappointing number that shows ongoing weakness in the job market,” said Robert Dye, senior economist at the PNC Financial Services Group. The four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December.

The increase suggests the economy is creating even fewer jobs than in the first half of this year, when private employers added an average of about 100,000 jobs per month. That’s barely enough to keep the unemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months. Stock futures fell on the prospects of more layoffs.

Dow Jones industrial average futures had risen by 50 points before the report was released. They dropped immediately afterward and were down six points shortly before the market opened.

Jobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. After flattening out earlier this year claims have begun to grow again. Dye said that claims showed a similar pattern in the last two recoveries, but eventually began to fall again.

The current elevated level of claims is a sign employers are reluctant to hire until the rebound is well under way. That’s what happened in the recoveries following the 1991 and 2001 recessions, which were dubbed “jobless recoveries.”

The number of people continuing to receive benefits fell by 13,000 to 4.5 million, the department said. The continuing claims data lags initial claims by one week. But that doesn’t include millions of people receiving extended unemployment insurance, paid for by the federal government.

About 5.6 million unemployed workers were on the extended unemployment benefit rolls, as of the week ending July 31, the latest data available. That’s an increase of about 300,000 from the previous week.

During the recession, Congress added up to 73 extra weeks of benefits on top of the 26 weeks customarily provided by the states. The number of people on the extended rolls has increased sharply in recent weeks after Congress renewed the extended program last month.

It had expired in June.

Private employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary census positions. July marked the third straight month that the private sector hired cautiously.

Economists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year. In a healthy economy, jobless claims usually drop below 400,000. But the recent increases in claims provide further evidence that the economy has slowed and could slip back into a recession.

Many analysts are worried that economic growth will ebb further in the second half of this year. After growing at a 3.7 percent annual rate in the first quarter, the economy’s growth slowed to 2.4 percent in the April-to-June period.

Some economists forecast it will drop to as low as 1.5 percent in the second half of this year.

http://www.nydailynews.com/money/2010/08/19/2010-08-19_half_a_million_are_jobless_unemployment_numbers_hit_9month_high.html#ixzz0x43i6hde

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