"A wise and frugal government which shall restrain men
from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
(Thomas Jefferson)

Friday, July 8, 2011

In the past visiting The Atlantic website never would have crossed my mind, but in expanding my search for relevant articles I recently discovered they have been having some excellent articles on the economy.  This article went into much more detail about the employment picture then most other places.  It gives facts without all the rhetoric we have seen this morning on so many sites and the graphs show you exactly what is happening.   These are facts you cannot argue with or spin like the Obama Administration is doing. 

This also ties in with a press release we received yesterday about the new EPA emissions regulations that could further erode job growth in oil and gas:

 Gov. Rick Perry today (7 July)  issued the following statement regarding new emissions regulations announced by the Environmental Protection Agency (EPA):
"Today's EPA announcement is another example of heavy-handed and misguided action from Washington, D.C., that threatens Texas jobs and families and puts at risk the reliable and affordable electricity our state needs to succeed. From the attack on Texas' successful clean air program, to threatening endangered species listings in West Texas oil fields, to banning offshore energy exploration, the Obama Administration seems intent on increasing energy costs for American consumers and making us even more dependent on foreign energy. 
"Texas will keep standing up to this destructive federal overreach, and working to enhance environmental protection and domestic energy exploration and production."
The EPA is still contributing  and has been for years to the lack of job growth in oil and gas producing states with their regulations and using the endangered species act for beetles, spiders, lizards, etc. to stop or slow domestic drilling.  The end result is buying more oil from foreign resources and watching domestic oil producing job growth stagnant or shed jobs when it should be growing. 
Jobs Stagnant as Unemployment Rate Ticks Up to 9.2% in JuneBy Daniel Indiviglio
Jul 8 2011, 9:59 AM ET  
If you look deeper, Friday's report gets worse as more Americans exited the workforce last month 
600 job listings REUTERS Tim Shaffer.jpgJune was a terrible month for the labor market. Just 18,000 jobs were added to the economy. That's fewer than what's needed to accommodate monthly population growth, so the unemployment rate ticked up to 9.2%, from 9.1% in May. As bad as they sound, these headline numbers actually make the month's performance look better than it was: they mask the fact that more than a quarter million Americans left the workforce in June. There's no good here. 
The Headline Numbers 
Let's start by looking at the historical charts form the Bureau of Labor Statistics. Here's the unemployment rate: unemp cht1 2011-06.pngThis isn't a pretty picture. In March the rate dropped all the way down to 8.8%, but has since consistently risen. June's 9.2% is the highest this year. It's also the first month in 2011 that the number of unemployed Americans has ticked back up above 14 million. 
Looking at the number of jobs created isn't any more comforting: 
unemp cht2 2011-06.pngAgain, May and June just look awful. The months added only 25,000 and 18,000 jobs, respectively. Remember, for the unemployment rate just to remain level, the economy needs to add between 125,000 and 175,000 jobs per month. We're not even close to that baseline, which is why the labor market picture is actually worsening. 
Once again, the government created a headwind for hiring, as the private sector actually added more jobs in June than the total shown above. But even private hiring was relatively anemic with 57,000 jobs added. That's the fewest net jobs the private sector has added since May 2010. Here's the chart: 
unemp private 2011-06.pngFew sectors had much to celebrate either: 
unemp sectors 2011-06.pngOther than leisure and hospitality, no sector had a particularly good month. You can see that government layoffs continue to make matters worse. In June, government firings were led by the U.S. Postal Service, which shed about 10,000 workers, and local government, which laid off about 13,000 teachers. 
The Broader Picture 
As bad as all of this looks, it doesn't capture some of June's deeper problems. During the month, employment shrank by 445,000. Unemployment only rose by 173,000, because 272,000 Americans left the workforce. But you can't try to blame this on Americans who just wanted to retire or stop working for personal reasons. The report also indicates that 310,000 more workers who were not technically considered unemployed still wanted a job, but did not have one.
Here's how the broader unemployment picture looks if you include those workers:  
unemp want 2011-06.pngThe number of workers in June who were labeled as technically unemployed or were not in the workforce but wanted a job rose by 483,000 to 20.6 million. That's a pretty staggering increase. The broader unemployment rate calculated using this broader measure was 12.9% in June. 
You can also see this increase in the jobless but not technically unemployed population through the change in the number of discouraged or otherwise marginally attached workers (though note, that this is the only data in this post that is not seasonally adjusted): 
unemp discour 2011-06.pngThe sum of these two groups also rose by 474,000 in June. This helped to push up the broadest measure of underemployment, "U-6," which measures the number unemployed, discouraged, marginally attached, or working part time for economic reasons. It increased to 16.2% in June, from 15.8% in May. 
You can also see that most segments of unemployment duration also rose in June: 
unemp duration 2011-06.jpgThe "less than 5" segment had the biggest jump, up 412,000. This indicates that many newly unemployed Americans hit the job market last month. 
June's report contains another startling statistic. Average weekly earnings of all employees plummeted by $2.64 during the month. This was the biggest decline since January 2008 and the third biggest since 2006. And these wages are not adjusted for inflation, so Americans' purchasing power declined by even more, as prices have been rising. Prior to June, wages had grown for 6 months straight.
There's really no way to spin June's unemployment report: it's just ugly. We saw anemic hiring, more layoffs, and additional workers who want a job exiting the labor market. We also saw wages decline. 
None of this is good, even if temporary. As unemployment remains high and wage growth stagnant, a recovery in spending will be elusive. And if Americans aren't spending more, then hiring will remain weak, as employers are looking for more demand before bringing on additional workers. This is a vicious cycle that the U.S. economy cannot seem to break out of. 
Image Credit: REUTERS/Tim Shaffer
Source:  The Atlantic 
You would think that Obama and his Administration would be encouraging job growth but they seem content to have the US increase the trade deficit in favor of foreign governments.   We are beginning to think that maybe it is true that Obama has quit listening to his advisers because his Administration is getting worse and Obama becoming more arrogant which we didn't think possible.  We keep going back to the beginning of his Administration when he told the assembled members of Congress -- "I WON!"  (January 23, 2009) 

Obama may have won the election, but he has been losing support throughout the Country since he took office.  There are momentary jumps in support like when Bin Laden was killed. When the details were coming out with no two stories matching, shortly the disapproval numbers rose once again.  One group said Obama and his advisers watched the event live and then the CIA said there was no live feed inside the compound.   All that spinning to try and make Obama look tough went for naught.

Today will be spin city out of Obama and his elites to explain these bad employment numbers but don't be fooled as they are probably worse.   Yet Obama wants to raise taxes on the wealthy who are the ones who provide a lot of the jobs which would sink our economy even more?  Makes no sense but then little of what this Administration does makes sense.

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