06.07.2013
Stocks Soar on HIGHER Unemployment?
original article written by Net Advisor™
WASHINGTON DC. Wall Street has been on a high since 2009. Yes, stocks have been going up but this high has been highly influenced by the government’s obvious pressure to get the FED to do its bidding.
Taxpayers don’t want any more government stimulus programs, even though they exist. President Obama’s housing stimulus programs are costing taxpayers billions to the point where the FHA is now technically insolvent (report).
So the Obama Administration arguably got the FED to dump currently almost $3 Trillion into the financial markets in order to keep interest rates down, and allow more home mortgages to be financed by government.
The FED’s “Crack Stimulus” program whose job is monetary policy not stock market manipulation, has not made a material dent into the jobs market. As long as the FED keeps the stock market addicted to this stimulus, stocks go up.
[1] Stocks Soar on Higher Unemployment?
Today’s Job’s report published by the U.S. Bureau of Labor Statistics shows that the unemployment rate actually went UP not down.
The Government’s Official Unemployment Rate for April 2013: 7.5%
— Source: BLS.gov, 05-03-2013 (PDF)
The government’s Official Unemployment Rate for May 2013: 7.6%
— Source: BLS.gov, 06-07-2013 (PDF)
The Dow was up as much as 200 points on the news [Source: Washington Post (PDF)].
[2] Why Did Stocks Soar on Higher Unemployment?
Forecasters were projecting 159,000 jobs for May 2013, and the result was 175,000 or 16,000 more jobs than expected.
The government’s 4th quarter jobs numbers were surprisingly revised higher from 151,000 to 201,000. This pretty much blew away the argument that the Fiscal Cliff was somehow hurting the economy as the Obama Administration said it would.
[3] Liberal Economists’ Admit U.S. Economy Still Struggling
The U.S. still has not recovered from the lost jobs before the “Great Recession.” Liberal Economist Paul Krugman admitted that we really need 580,000 new jobs per month to return to pre-recession levels. Krugman acknowledged, “that is not going to happen.”
His economic view is that at the very least we should be looking at 300,000 new jobs per month, and even at that level the U.S. will still likely undergo prolonged suffering.
“Even if we add 300,000 jobs a month, we’re looking at a prolonged period of suffering — a huge cost from the Great Recession. So that’s kind of a minimal definition of success. Anything less than that, and it’s bad news.”
— said Liberal Economist Paul Krugman (Source: New York Times PDF)
The U.S. economy hasn’t even scratched the 300,000 jobs number in the last five years. President Clinton’s former Secretary of Labor Robert Reich acknowledged that the Labor Participation Rate has been at the lowest in nearly 30 years, and people are working less.
“The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population in jobs continues to drop — now at 63.6 percent, almost the lowest in 30 years. Meanwhile, the average workweek is stuck at 34.4 hours.”
— Liberal Economist Robert Reich (Source: Huffington Post, 12-07-2012 PDF)
By April 2013, the Labor Participation Rate is the lowest since 1979 (PDF). This means fewer people are working in the USA, and this is not economic growth.
[4] Government Still Not Counting the Unemployed?
In April 2013, the jobs data showed that the unemployment rate is actually higher than reported.
“People without a job who stop looking for one are no longer counted as unemployed. That’s why the U.S. unemployment rate dropped in March despite weak hiring. If the 496,000 who left the labor force last month had still been looking for jobs, the unemployment rate would have risen to 7.9 percent in March.”
— Source: Huffington Post, 04-06-2013 PDF
CNN acknowledged that the FED just can’t do anything to help the long-term unemployed (PDF). As of the latest unemployment figures show there are still 2.2 million people NOT COUNTED as unemployed (Source: Bureau of Labor Statistics, 06-07-2013 PDF)
[5] May Jobs report: By the Numbers
Today’s jobs report looks like this:
| Unemployment Details: | |
| Number of people officially counted as unemployed: | 11.8 Million |
| Long-term Unemployed: | 4.4 Million |
| Under-Employed (only can get part-time work): | 7.9 Million |
| Not Counted as Unemployed: | 2.2 Million |
| Unemployment Rate by Group: | |
| Teen Unemployment Rate: | 24.50% |
| Black Unemployment Rate: | 13.50% |
| Hispanic Unemployment Rate: | 9.10% |
| Official National Unemployment Rate: | 7.60% |
| Adult Women Unemployment Rate: | 7.20% |
| White Unemployment Rate: | 6.70% |
| Adult Men Unemployment Rate: | 6.50% |
| Asian Unemployment Rate: | 4.30% |
Chart by NetAdvisor.org® Staff. Data Source: U.S. Bureau of Labor Statistics, 06-07-2013 PDF
[6] Biggest Job Growth: Low Wage, Low Skill Jobs
The job growth in the USA has shown the largest increase in ‘food and drinking places.’ Over the last year the BLS reported 337,000 new jobs including 38,000 last month; thus more people are eating and drinking more. The problem is that these are not the high wage jobs that create income that people can really thrive.
[7] HealthCare Watch
There was an increase of 11,000 jobs in May including in home healthcare and out-patient services. But there was a loss of 6,000 jobs of people who worked in hospitals. This sounds like more people will have to take care of themselves at home; or if you need healthcare, forget about going to a hospital – a clinic is what the government has ordered.
[8] Past Jobs Reports Show a Net Decrease
Two previous jobs report were revised by the BLS.gov. The March 2013 jobs report was increased up from 138,000 to 142,000. The April 2013 jobs report was revised from 165,000 down to 149,000. The combined net change between these two reports show that 12,000 more jobs were lost than previously reported.
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See our archive for past jobs reports.
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