Article 43


Friday, June 01, 2012

Florida’s Unemployment April-May 2012


FLORIDA’S UNEMPLOYMENT went down again last month.

But again - not all of us are JUMPING WITH JOY.



The unemployment rate fell from 9 percent in March to 8.7 percent in April, dipping to the lowest point in more than three years, but the state lost 2,700 jobs.

It’s not unusual to have a disconnect between the unemployment rate, which is taken from a household survey, and the jobs numbers, which are based on feedback from employers.

Still, it underscores a recurring theme of this sluggish economic recovery: The plummeting unemployment rate looks better than reality because more people have dropped out of the labor force.

“The state of the labor market is not as good as the press release (on unemployment) might suggest,” said University of Central Florida economist Sean Snaith. “You couple the unemployment rate with payrolls falling and a shrinking labor force, and you get a more complete picture of a broken market still struggling to get on its feet.”

“The unemployed have a tendency to GIVE UP LOOKING once their unemployment insurance benefits expire,” which would shrink the labor force even more, said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.

In a statement, Gov. Rick Scott focused on the latest jobless rate which has closed the gap with the national rate of 8.1 percent - rather than jobs lost.

Nationally, the BLS U-6 (more realistic) unemployment figure is 14.5%. An even more telling figure is the EMPLOYMENT-POPULATION RATIO with less than 59% WORKING AGE people employed for the past three years. Last time it was as low was 1983.

And The President goes on TV making it look like good news.


In March, 120,000 jobs were created [nationally], while more than 330,000 people dropped out of the workforce. For self-serving reasons, the Obama administration spins this as good news.

A growing number of analysts are realizing that these subjective government figures dont reflect reality in the workplace.

Congress is beginning to take notice. Rep. Duncan D. Hunter, California Republican, has proposed the Real Unemployment Calculation Act, which would require “the federal government [to] cite, as its official unemployment calculation, the figure that takes into account those who are no longer looking for work.”

The government naturally wants to put as good a face on the ostensible recovery as possible, but the official unemployment figures are painfully out of step with reality. If three Americans are quitting the workforce for every one who finds a job, this is not a recovery. It is a national jobs crisis.


“Missing workers” mean the unemployment rate is understating weakness in the job market

By Heidi Shierholz
Economic Policy Institute
May 30, 2012

The labor force participation rate (the share of working-age people who either have a job or are jobless but actively seeking work) has dropped by more than two percentage points since the start of the Great Recession in Dec. 2007. According to a recent EPI analysis, roughly two-thirds of this decline is due to weak job prospects in the recession and its aftermath (these changes are generally labeled cyclical), while the remaining one-third is a result of long-term trends such as baby boomers beginning to retire (changes generally labeled structural). The cyclical portion of the decline in the labor force participation rate represents nearly four million workers who would be in the labor market if job prospects were strong. The existence of this large pool of :missing workers” - workers who have either dropped out of or never entered the labor market because of the lack of job opportunities - means that the unemployment rate is understating weakness in the labor market.

Arguably the best single measure for assessing recent labor market trends is the employment-to-population ratio of 25-54-year-olds, which is simply the share of the 25-54 population that has a job. The restricted age range25-54-year-olds, or people of “prime working age” - helps insure that trends are not being driven by retiring baby-boomers or increasing college enrollment of young people, but are instead caused purely by changes in job opportunities.

As THE FIGURE shows, the share of employed workers 25-54 plunged dramatically from the start of the Great Recession through the fourth quarter of 2009, and then, for nearly two years, essentially bumped around at the bottom of that extremely deep hole. Since the fall of last year, the ratio has just begun to show signs of improvement.

This means that the improvement in the unemployment rate, from 10.0 percent in Oct. 2009 to 8.1 percent in April 2012, has largely been due to people dropping out of, or not entering, the labor forcenot to a larger share of potential workers finding work. This also means that while expansionary policies to generate demand are urgently needed and will help spur job growth, they may also generate upward pressure on the unemployment rate as these missing workers begin to enter or reenter the labor market. That kind of upward pressure on the unemployment rate would be a positive sign.



Video: 250,000 Americans to Lose Unemployment Benefits

Opposing Views
May 30, 2012

In February, Congress put restrictions on extended unemployment benefits in states in which the unemployment rate has dropped, so as many as a quarter of a million people will lose their benefits much sooner than expected, reports CBS News (video below).

The checks are stopping for the people who have the most difficulty finding work, the long-term unemployed. More than five million people have been out of work for longer than half a year.

Federal benefit extensions, which supplemented state funds for payments up to 99 weeks, were intended help the unemployed until the job market improved.

Next month, an additional 70,000 people will lose benefits earlier than they expected, bringing the number of people cut off prematurely this year to close to half a million, according to the National Employment Law Project.



Worst U.S. Job Data in a Year Signals Stalling Recovery

By Shaila Dewan
NY Times
June 1, 2012

A dismal job market report Friday gave a resounding confirmation to fears that the United States recovery has markedly slowed, reflecting mounting evidence of a global slowdown.

The report, which showed the smallest net job growth in a year and an unemployment rate moving in the wrong direction, was a political game-changer that bodes ill for President Obama as he faces re-election.

It provided traction for his Republican rival, Mitt Romney, at a time when politicians have been deeply divided over the most effective way to strengthen the economy. And it put increased pressure on the Federal Reserve to take further action to stimulate growth.

The United States economy gained a net 69,000 jobs in May, according to the Labor Department. The unemployment rate rose to 8.2 percent from 8.1 in April, largely because more people began looking for work. And there was more unexpected bad news: job gains that had been reported in March and April were revised downward.

Economists can explain away a month or two of disappointing numbers. But this was the third consecutive disappointing monthly performance by the job market, following a winter of solid gains, convincing many that the economic recovery has, for the third year in a row, lost momentum. A few analysts even reintroduced a possibility that dogged last years forecasts but did not come to pass: a double-dip recession.

The report on American jobs added to the global pall that has deepened as a result of renewed uncertainty in Europe and slowing growth in China and India. Global financial markets, already weak in early trading on Friday, sank further on the numbers. On Wall Street, the Dow Jones industrial average lost 1.8 percent, or 221 points, by early afternoon, and the main index of the German stock market closed down 3.4 percent.

Yields on United States and German government bonds also slumped further as traders sought safer investments. The 10-year Treasury yield fell to another record, 1.46 percent, and the German tw0-year bond fell below zero.

Once again, uncertainty became a dominant theme. ‘Manufacturers are very concerned about Europe because a blowup in Europe means a global slowdown,’ said Ellen Zentner, the senior United States economist for Nomura, the financial services firm. ‘It hasnt translated into layoffs - businesses are just hiring less.’

Republicans immediately seized upon the jobs numbers as an opportunity to criticize Mr. Obama’s economic policies.

The American people don’t have to accept President Obamas new normal of “fewer jobs and higher prices,” House Speaker John A. Boehner said in a statement.

The May jobs report showed gains in health care, transportation and warehousing, and wholesale trade, while construction jobs fell by a seasonally adjusted 28,000. Even some bright spots, like booming auto sales, failed to bolster manufacturing employment by much it was up by 12,000 jobs. Once again, government at all levels shed workers.

‘In February or March, I thought the labor market had achieved escape velocity,’ said Patrick J. OKeefe, the director of economic research at J. H. Cohn, a consulting firm. ‘It appears to me now that that was a premature call.’

Several members of the Federal Reserves policy-making committee have said in recent days that they were not inclined to change current policy, but that position has always been contingent on continued growth. The economy needs to grow by about 125,000 jobs each month just to maintain the current unemployment rate.

When the Fed committee next meets, in late June, it will face the possibility that the economic recovery once again has failed to take off.

Global fears showed up in other economic data on Friday. Slowing exports cooled a the major manufacturing index, though it remained in positive territory with a strong report of new orders. That news came on the heels of falling consumer confidence, an uptick in new claims for unemployment benefits, and a downward revision of the country’s overall economic growth in the first quarter, to a 1.9 percent annual rate from 2.2 percent.

The jobs report is based on two surveys, one of businesses and the other of households. The household survey showed a net gain of 400,000 in the number of people employed.

But David Rosenberg, the chief economist with Gluskin Sheff, an investment firm, said virtually all of the gain was in part-time work, while the number of full-time workers fell.

“Even the good news in this report was bad,” he said.

Some analysts said it was still too soon to declare a significant slowdown. The recoverys roller-coaster trajectory may be largely illusory, Ms. Zentner said, the product of seasonal adjustment distortions and, this year, the unusually warm winter. While many economists say the weather impact, which caused some growth to occur earlier in the year than it otherwise would have, should be over by now, Ms. Zentner said her research showed that historically, May is the month that is most dampened after a warm winter. Seasonal adjustments were also making the winter look better than it was and the spring look worse.

“What the seasonal bias has done is its made the recovery look like a stop-start recovery,” Ms. Zentner said. “Instead, the pace of the recovery has been very steady - very moderate, and disappointing, but steady.”

The number of long-term unemployed, those who have been looking for more than half a year, rose by 300,000, even as hundreds of thousands of jobless workers lost their unemployment checks because of cutbacks. The long-term unemployed have the hardest time finding jobs, and many of them say they have not seen any improvement in the job market.

“Nobody has lists and lists of hundreds of available jobs,” said Glen Barry of Carmel, N.Y., who worked for the government at the county level for 25 years as a computer operator and was laid off in December 2010. “A lot of people work a job and a half now. Instead of having four people doing the work, they have two people doing the work.”


Posted by Elvis on 06/01/12 •
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