I was parking my car the other day and briefly chatted with a well-dressed and articulate older gentleman, the parking attendant. After not agreeing to my proposed having-to-wait-in-the cold discount - never hurts to ask - he asked me if I worked in the building and I said no, but I had before, over a year ago. Then he told me he was working there because even though he had two higher degrees, there was no work in our city.
He used to run a successful photography business, but beginning around a year ago, more and more of his clients were cancelling engagements, having found friends to take pictures for free. This, they might regret someday, when reminiscing through their photo albums, but that was of no help to him now. Work at the parking garage was all he could find, nine dollars an hour; and by the way, his friend in construction hadn't worked in months, besides the one-time deal on New Years. Many people he knows are "just sitting home" he told me. That's how it is.
How does this vicious cycle end? With so many people out of work, demand for things and services (like photography for special events) cannot increase in any substantial way, but until demand increases, lots of people will be out of work. Unless the government gives them jobs, perhaps, counting things.2010 Forecast: A Year of Uncertainty
John Mauldin's Thoughts from the Frontline
Chart du Jour: A decade of no new jobs
A challenged consumer confidence survey is not surprising, given the fact that roughly 8% of the working population is getting some form of unemployment assistance. One in eight children in this country is living on food stamps. By the way, the total number of people on unemployment is about 300,000 worse than most media accounts report. The Extended (and Emergency) unemployment claims for those out of work more than 26 weeks are not seasonally adjusted. To get the total number of people on unemployment insurance of all kinds, you have to add the non-seasonally adjusted number of continuing claims, which is currently about 300,000 higher than the seasonal adjustment. Here is a chart from Philippa, at www.theliscioreport.com.
She explained, "For the week ended 12/19, 10.42 million Americans were receiving unemployment benefits, With 5.44 million Extended claims (week ended 12/19) and 4.98 million Continuing claims.
"But NSA jobless claims show a far different story. The advance number of actual initial claims under state programs, unadjusted, totaled 645,571 in the week ending Jan. 2, an increase of 88,000 from the previous week. There were 731,958 Initial claims in the comparable week in 2009... The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,479,110, an increase of 388,729 from the preceding week. A year earlier, the rate was 4.0 percent and the volume was 5,317,388.
"So the actual, the real benefits paid (Initial, Continuing, and EUC claims) hit another record of 11.268 million." (source: The Big Picture)
Today's employment report was just terrible. The headline said we lost 85,000 jobs. That is from the establishment survey, where they call up larger businesses and ask them about their employment. They also do a household survey, where they survey about 400,000 households. That report reveals a much worse situation...
Sidebar: As noted above, a large number of people were dropped from the official labor force. What that means is that even though the number of employed people fell, the unemployment rate did not. It will be interesting to see if a lot of those people just decided that December was not a good time to be looking, spent time with families, or decided it was too cold to get out. How many will start looking as we get into the new year? We could see a rise in the unemployment rate next month if a large number do look for work.
Look at the chart below from my friend Greg Weldon. (It just hit my inbox.) It shows the percentage of people who are participating in the work force. (www.weldononline.com) It is sadly dropping, which means that incomes to families are dropping. The number of people I know who are looking for work or are struggling increases each week. It truly saddens me.
The US Labor Department yesterday reported that nonfarm payrolls (jobs) decreased by 85,000 in December while the data for November was revised upward to show a gain of 4,000 jobs.
For some perspective, Chart of the Day produced the graph below that illustrates the percentage increase in the number of jobs for every decade since the 1940s (the data goes back to 1939)...“This subpar job growth is particularly noteworthy due to the fact that the US population has increased by 10% in addition to a significant increase in global wealth during the same time frame,” said Chart of the Day.
Source: Chart of the Day, January 8, 2010.
And by Tyler Durden, a further dissecting of the data:The Lost Decade For Jobs
By now everyone knows about the Rip Van Winkle effect in stocks: the "noughties" were a snoozer, with the stock market lower on December 31, 2009 than on January 1, 2000. Yet what may have escaped most people is that the decade was also a scratch in terms of employment: the country now has essentially the same number of employed people as it did 10 years ago.
The problem, of course, is that both the total population, and the size of the workforce have not stayed flat over the past 10 years. The charts below demonstrate the Employment-To-Population ratio for all time, and, more disturbingly, for the past 3 years. This ratio is now the lowest it has been in almost 30 years.
David Rosenberg, who made the observation, had this to say about this very troubling trend:
We started the decade with a national payroll level of 130.8 million. We finished the decade practically unchanged at 130.9 million. Meanwhile, the total pool of available labour rose from 146 million to 159 million. In other words, we have the same number of jobs today as we did a decade ago, and yet we also have 13 million more people competing for them. It was more than just a lost decade for the equity market. It was a lost decade for the labour market. Today’s report validated the Fed’s concern over the outlook for employment, which dominated the FOMC minutes released earlier in the week. Those pundits calling for an early exit from the central bank’s accommodative stance may have some reconsidering to do.
An even better way to visualize this, is the difference between the total number of civilians employed and the total US population (308.3 million). The number in December is a record 170.5 million. Keep in mind only 137.8 million are currently employed according to the BLS.
There isn't much spinability here. The employment picture in America is horrendous and getting worse. In the worlds of Rosenberg again:The so-called ‘employment rate’ — the ratio of employment to population — fell 58.2% from 58.5% in November and the cycle peak of 63.4% in 2007. This is extremely significant because what it means is that it would take an expansion in employment of 20 million over the next five years just to get back to those old cycle highs. But here’s the problem... More here. >>