In April, a “mere” 322,000 people lost their jobs. That was part of the whole “bad news, good trend” thing that had everyone talking about green shoots. In May, economists predicted a pretty similar result: 350,000 lost jobs. They got it wrong. We lost 467,000 jobs in May. The unemployment rate rose to 9.5 percent. And that actually underplays the problems. It’s always worth remembering that the unemployment rate is, at best, a partial indicator of people who are unhappily unemployed. Tim Fernholz explains:
“Keep in mind that when we say 9.5 percent, we’re talking about people who have lost their job and are looking for a new one. But when you factor in people who “currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past” “plus total employed part time for economic reasons,” and you get a rate of 16.5 percent unemployment — nearly one in five potential workers has lost significant wages and work in the current economic environment”
Found by John Ligums.
this recession is uniquely NOT part of the boom/bust business cycle but rather is part of a “re-leveling” of the international playing field.
No country can export its manufacturing jobs and not suffer a decline in living standards/GNP growth etc. Couple that with deficit spending on a scale that should put every congressperson and president in JAIL and you have the predicate for a massive round of inflation to begin soon.
Its mathematical.
some of the problem comes with COMPANY/corp protectionism.
TRY to get into the oil business.
TRY to get into the transportation industry.
TRY to start a business in the Auto industry.
try TO BUILD an energy plant..Look at the regulations that have popped up over the years.
TRY to start a internet company. You have some major competition, AS WELL as stupid companies that THINK MORE $ is better.. and those that think FOREIGN is CHEAPER. It cost the SAME if you take out the top managers wages in the USA.
the COSTS to setup most major business is VERY prohibitive. you could buy 90% of the SAME goods at 25% of the price in another country AND build A WHOLE new CORP.
Bobbo, I agree that the shifting jobs markets are not separate systems and that, for the most part, jobs are not tied to the fluctuations in “business” nor in the ebb-and-flow of capital. But people are losing jobs, in this very market, on account of this current financial mess. Many sectors, including the service sector, the bread and butter to the working people of the US, have been decimated. Follow the capital, once paying service-sector wages, and you see the fortunes of small-business owners shrinking if not destroyed by investments. Those in professional sectors, servicing the former service sector workers, are losing their shirts as well. Whole law, accounting, and marketing firms have gone under because the market is adjusting. (odious term, isn’t it?)
This relates to why I think your idea that the US must endure a period of devastating inflation is faulty.
Inflation is always tied to supply. Some markets’ product supplies are naturally price-controlled and aren’t entirely subject to the exchange value of currency. For example, we won’t see the costs of food or gas rise past historic US levels unless the supply itself is endangered.
Without taking up more space I can’t prove any of this but I can appeal to history and ask for precedent to be considered. The US is still a very rich land, still abundant in untapped natural resources, larger than is realised, filled with resilient people who are only a few generations removed from the poverty of their immigrant ancestors. I appeal to our rational sense to put the current troubles in perpective and see that there is no reason to think our way of life is in jeopardy. People always think something bad is coming and they usually worry more than, in the end, experience shows they needed to.
Save a little money if you can and connect with your community of peers in hard times. That’s much better advice than proposing panic over incipient, apocalyptic inflation. Chill out, dude.
#3–BCP==blogs are terrible places to debate ideas. The chart at the top of this thread is unique. Why?
Many countries that remain poor are rich in natural resources. Just read about the worlds largest proven oil reserve with 500 Billion Barrels (40 years supply for USA) having been discovered and confirmed 5 years ago under the Dakotas. We may indeed be richer than we think.
Still, how does a country get rich/experience a high standard of living? Its by selling goods or services to folks OUTSIDE the country. Lots of other variables but that is the key. Fail to do that and your economy will DECLINE just as ours is doing.
Inflation always occurs “eventually” when a government deficit spends. As stated, this is as rigid a rule as mathematics. If a country has revenue X but spends 2X the difference is made up with debt and inflation to various degrees. We have been funding our deficit with debt financing but the credit evaluation of third countries is reaching its limit. When further debt is not possible, current face value obligations will be paid off with inflated currency. Its the gravity law of economics.
I did not propose panic–just pointing out what is obvious so that people can’t say “the housing boom will never stop==you know, they aren’t making real estate anymore” ==and other dumbass statements.
You know, hanging with your other unemployed buds is no substitute for a job?
Out of WW2, USA was the sole manufacturer===selling to the world and our economy/life style was built on that. As the rest of the world rebuilt, and the third world industriablize, the world’s economy integrated and leveled. LEVELED==the poor came up while the rich went down. Not a zero sum game, but your look at History should show no culture stays on top forever.
Nothing special going on, just the natural course of affairs. Lets take the rosy glasses off and be real.
My statement “Inflation is always tied to supply” needs to be qualified, if not disregarded. It’s as meaningless as saying that inflation makes things more expensive or is bad.
BPC–You might want to qualify this as well: “For example, we won’t see the costs of food or gas rise past historic US levels unless the supply itself is endangered.” /// Haven’ we already seen dramatic CRUSHING oil prices?–or do you mean that each new high sets the historic level? If thats the case, then the steeply rising food costs right now don’t mean anything either.
IMHO..
The only way this is going to be over QUICKLY.
is if corps CUT THE TOP OFF”.
Cut the profit margins for 2-3 years.
UNDER CUT the other business.
the FIRST companies to do this will win. Those that do it later, will either Suffer or fail.
COSTS are so low its STUPID..thats why so many companies went to asia, in the FIRST PLACE, to MAKE a higher profit margin. NOW they can use it to recover this nation.
Current companies have forgotten the OLD WAYS of business and HOW to make a recovery. GIVE THE PEOPLE on the bottom the money, and they will spend it.
I also think that the money that the BANKS LOST was virtual. Promises on PROMISES. no money was EVER exchanged. 1-2 banks had some problems and the MAJOR BACKER QUIT/LEFT/PULLED out his PROMISE.. seeing no BACKING to those making the loans, OTHERS pulled out and the CASTLE CRUMBLED.. A self inflating MATTRESS and no POWER supply to blow it up. and NO RICH person to PUFF ON IT, to keep it inflated.
Prices will go up about 1/4-1/3..and then one after another they will CUT back to what it was..and make us ALL feel that we are saving money..
WHO remembers when a 24 roll of TP(toilet paper) took up 1/2 your trunk?? NOW you can put it under your arm and walk away.
Job loss rate for the quarter diminished ~40%. There were a number of economists who predicted 10% unemployment by the end of this year – given what the economy inherited from numbnuts and Republican voodoo economists. They appear to be correct.
Hoping that the Keynesian measures rolling out fail – is no different than hoping a la Cheney that terrorists manage another mass killing. Just a slower death rate.
Both are obviously less likely. Something that continues to frustrate the folks who lost the election. If you haven’t noticed.
It’s like saying climate change isn’t happening because you found 600 square meters of sea ice in someone’s closet that hasn’t yet diminished in thickness.
In my neck of the prairie, housing starts were up 15% last month – even though we always have a stupid surplus of MacMansions IMHO. The rate of job decline is down to 2.4%. Stimulus money has been rolling out into highway and infrastructure construction for months.
It does require businesses and local governments who can fill out paperwork. A difficult task at best – for some local bureaucrats.
Want REAL figures on everything from GDP to unemployment to the money supply? Go here:
http://www.shadowstats.com/alternate_data
And, BTW, their figure for unemployment is just under 21%. So why aren’t we experiencing yet the same strife as we did during the Great Depression where the rate was, IIRC, 25%? Many factors including the total lack of any social safety net back then, the fact that back then there was only one employed person per household, the Dust Bowl issues, etc.
#8 Moss has a bad case of BDS.
He conveniently avoids mentioning the trillion dollar stimulus package, the pending hyperinflation thanks to the mint working overtime printing worthless money, and the insurmountable debt created by Obama during the past 6 months that our grandchildren will still be struggling to resolve years from now.
I made fun of survivalist for years. Now I’m not so sure. The states are cutting the safety nets, consumer confidence is abysmal, and the early rounds of layoffs will run out of unemployment. We are a spoiled nation compared to the hardy folks that weathered the Great Depression. Civil unrest might be closer than we think. Could be time to bring some troops home.
#11 – Also, the Community Redevelopment Act, which encouraged and promoted home loans to people who could not afford them.
Don’t want to forget Barney Frank or Chris Dodd either.
#10 – “the fact that back then there was only one employed person per household”
Pfff. During the Depression, my mom and most of her brothers and sisters left school and got jobs to support the family.
Meh. The world didn’t end in 1938, 1948 or 1958. Probably won’t now, either. If I’m wrong, come see me afterward and I’ll give you a dollar.
Don’t worry – Windows 7 will lift us out of everything. Has before, right?
If it doesn’t, THEN I’ll switch everything over to Ubuntu, or whatever Linux variant makes managing a domain , well, manageable.
If the economy doesn’t turn around by then, well, I’ll join the polygamists in B.C. You only need two wives as starter seed, right? One will carry the hops and the other the orange seeds – global warming should make growing oranges up there possible, right? If not I’ll be able to fall back on beer brewing.
Neither side (left or right) has won this one. New economic models will emerge from countries where their systems are relatively stable.
Finally we are nearing total capitualtion and acceptance that the economy is in fact bad, and now it will start to get better.
Stockmarket tends to preceed the greater economy by about six months to a year on these matters. Stock market was nearing total capitualtion about 6 months ago.
I would call bottom, but I am wrong everytime I do that…
Eventually peoples cars, refrigerators and houses will wear out and they will need new ones, and people will spend the money even if they dont want to.
As I age I wonder if government spending on make work projects doesn’t make these things worse than they have to be. I wonder if the TARP funds would have been better spent just giving people a direct tax credit refund thing.
The only thing that the TARP funds have seemed to accomplish is cause the remaining banks to raise their banking fees…
18 months ago was 2008.
gang the economy is gonna get worse.., the baby boomers are starting to die.
these are just warning shots over the bow. as the boomers pull their retirement money out of the stock market to cover their medical costs things will just get worse. the economy rode the wave of baby boomersto it’s peak… that wave is starting to break…
#6
I have not seen crushing oil prices nor has my food budget significantly increased. Even on my meager income, I can eat like a king after taking Sunday joy-rides in my Ford.
When food costs represent more than 20% of my income, I’ll have reason to worry.
Bobbo, I hope my responses aren’t rude or too snarky. I enjoy reading your opinions and even if I don’t agree with some they still are valuable to me. I comment on blogs to get feedback on opinions I am still formulating. Thusly, I have nothing to prove but the inaccuracy of my own words.
20% of your income??
you must be bringing in some good money not to be affected.
A person bringing home $2000 per month.
30% tax -600=$1400
Rent -600 AT LEAST..=$800
Utilities -200-300=$500
Food single person is about -$150=$350
And you have wages in the $24,000 range. Or about $12 an hour.?? FUll time??
And in the USA the average low income person from bureau of labor and stats makes less then $7-$10 per hour which is over 60% of the USA..
OR $1600 per month?
$1600- tax(30%)= $1120
Rent -$600=$520
Utilities -$300=$220
minus food -$150=$70
and food is only <10% of his wages??
The OLD way was that RENT could be 1/4 of your wages. And you could even raise a small family. IF you can find rent at <$600, I hope you like your crappy trailer.
#21
Where are you seeing trailers for $600 a month? Even in Michigan $600 a month gets you a plot of land at the long term camp ground with ~1000 watts of electric and fresh water, nothing as nice as a trailer.
22,
I know..
But Im in Idaho, and the prices are abit cheaper.
$600 is about the starting price to RENT. If you want more then 1-2 rooms.
I was commenting to Bryans..
“When food costs represent more than 20% of my income, I’ll have reason to worry.”
20% of his income?? He would be needing to be PART TIME, and making MINIMUM WAGE at 20 hours per week. in which case, He couldnt afford a home. When rent and utilities cover 3/4 of your Monthly wages after taxes..something is wrong.
Has anyone here seen HARD data on money that has made it through the gov’t bureaucracy to actually employ new people in ANY meaningful numbers?
But Obama said the stimulus package is working!
Fun arriving back at this whining node – 4 months into what became a bull market. Four months after the bottom.
Taking a peek back at the conservatives who (1) refused to admit culpability along with their fearless leaders in Congress – and (2) absolutely confident the economy couldn’t possibly turn around.