U.S. unemployment rate hits 7.2% as 524,000 jobs cut (http://www.chron.com/disp/story.mpl/front/6202353.html)

WASHINGTON — The nation’s unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs, capping one of the worst years in modern history for American workers.

The Labor Department’s report, released today, underscored the grim toll the deepening recession is having on workers and companies. And it highlights the difficulty President-elect Barack Obama faces in resuscitating the flat-lined economy. This year has gotten off to a rough start with a flurry of big corporate layoffs, pointing to another year of hefty job reductions.

For all of 2008, the economy lost a net total of 2.6 million jobs. That was the most since 1945, when nearly 2.8 million jobs were lost. Though the U.S. labor force has more than tripled since then, losses of this magnitude are still being painfully felt.

With employers throttling back hiring, the nation’s jobless rate averaged 5.8 percent last year. That was up sharply from 4.6 percent in 2007 and was the highest since 2003.

While economists were forecasting even more payroll reductions in December — around 550,000 — job losses in both October and November turned out to be deeper than previously estimated. Revised figures showed employers slashed 584,000 positions in November and 423,000 in October.

The unemployment rate, meanwhile, rose from 6.8 percent in November, to 7.2 percent last month, the highest since January 1993. Economists were expecting the jobless rate to rise to 7 percent.

Losses were widespread in December. Construction companies slashed 101,000, and manufacturers axed a a whopping 149,000 jobs. Professional and business services got rid of 113,000 jobs. Retailers eliminated nearly 67,000 jobs, and leisure and hospitality reduced employment by 22,000. That more than swamped gains in education and health care, and the government.

All told, 11.1 million people were unemployed in December.

Employers are chopping costs as they try to cope with dwindling appetite from customers in the U.S. as well as in other countries, which are struggling with their own economic problems.

Not only are employers cutting jobs; they also are cutting workers’ hours. The average work week in December fell to 33.3 hours, the lowest level on records dating to 1964.

And the number of people who work part time — a category that includes those who would like to work full time but whose hours were cut back or those who were unable to find full-time work — jumped to 8 million in December, from 7.3 million in November.

Workers with jobs saw modest wage gains.

Average hourly earnings rose to $18.36 in December, up 0.3 percent from the previous month. Economists were expecting a 0.2 percent increase. Over the year, wages have increased 3.7 percent, although high prices for energy and food earlier this year made people feel like their paychecks weren’t stretching that far.

The U.S. recession, which just entered its second year, is already the longest in a quarter-century, and is likely to stretch well into this year. The fact that the country is battling a housing collapse, a lockup in lending and the worst financial crisis since the 1930s make the current downturn especially dangerous...

(continues at the link)

Unemployment in SC officially at 8.5%, probably closer to 10%. Forecast for this year to 11.5%, reality will likely be at least 15%.

Is it a Depression yet?

depression: the wolf shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together. +10% gdp decline. mass anhedonia.

Unemployment in SC officially at 8.5%, probably closer to 10%. Forecast for this year to 11.5%, reality will likely be at least 15%.

Is it a Depression yet?


It already is... Sometime in the Reagan years, the Labor Department started publishing a set of indexes. The one they talk about now (exclusively) is the U3 which was at 6.7% in November and hit 7.2% in December. The unemployment number we were used to is much closer to the U6 which is U3 plus workers who were "discouraged" and stopped looking for work, yadda, yadda. The U6 hit 12.5% in November and topped 13% last month. It is the U6 which should be compared to previous unemployment numbers. Over 20 million people are now unemployed.

It already is... Sometime in the Reagan years, the Labor Department started publishing a set of indexes. The one they talk about now (exclusively) is the U3 which was at 6.7% in November and hit 7.2% in December. The unemployment number we were used to is much closer to the U6 which is U3 plus workers who were "discouraged" and stopped looking for work, yadda, yadda. The U6 hit 12.5% in November and topped 13% last month. It is the U6 which should be compared to previous unemployment numbers. Over 20 million people are now unemployed.




There are fewer and fewer jobs that are much better than not having a job. I have been freelancing and odd-jobbing for a while, with all of the risks and pitfalls that entails.

Many in the farming community are improvising, moonlighting, part-timing and otherwise struggling to survive without jobs in the sense that the word "job" once meant, picking up work where they can.

It already is... Sometime in the Reagan years, the Labor Department started publishing a set of indexes. The one they talk about now (exclusively) is the U3 which was at 6.7% in November and hit 7.2% in December. The unemployment number we were used to is much closer to the U6 which is U3 plus workers who were "discouraged" and stopped looking for work, yadda, yadda. The U6 hit 12.5% in November and topped 13% last month. It is the U6 which should be compared to previous unemployment numbers. Over 20 million people are now unemployed.

Thank you for taking the time to explain this. I've had a vague idea that people weren't counted at some point (I figured it might be when their unemployment ran out), but didn't know that the actual unemployment was close to double the "official" figure. I'm certainly not surprised to see those numbers manipulated.

Average home price $18,513 - Unemployment rate 21%

The Great Depression has reached Detroit. The average price of a home is now $18,513 and unemployment has reached 21%, and it’s expected to get worse. Detroit is facing a crisis of epic proportions that officially puts Detroit statistically (and real term) on par with the great depression. Many readers of Tribble Ad Agency are advertising centric.. and due to the rash of layoffs within all Detroit Advertising firms has put the city on the map for the wrong reasons.

It has become the center of all that is wrong with America… and nothing of what is right.

For example, the crime rate has fallen…. because of lack of targets within the city. Meaning there is nothing left to steal. In fact, even the criminals don’t want to leave jail.

Heard confirmed that some offenders, notably those without homes of their own, were now expressing reluctance to leave jail when their sentences were done.

Home values have plummeted to levels not seen in 1/2 a century… and the 21% unemployment has in some cases been projected to double within 12 months if the auto industry totally collapses.

http://www.tribbleagency.com/?p=3598

COLUMBIA, S.C. — Just hours before the unemployment benefits fund was to run out in South Carolina, the state with the nation’s third-highest jobless rate, Gov. Mark Sanford relented Wednesday and agreed to apply for a $146 million federal loan to shore it up, after weeks of refusing to do so.

Gov. Mark Sanford of South Carolina announcing Wednesday that he had applied for the $146 million federal loan that would ensure continued unemployment benefits in the state.

The governor’s position had drawn rebukes even from fellow Republicans in the Legislature, one of whom denounced Mr. Sanford as “heartless,” and from newspaper editorial pages. On Wednesday, The State, the daily newspaper here in Columbia, accused the governor of playing “chicken with the lives of the 77,000” who are unemployed in South Carolina.

For weeks, Mr. Sanford, newly elected as head of the Republican Governors Association and known for being a fierce free-market foe of government spending, stuck to his stand, questioning the probity of the South Carolina Employment Security Commission and demanding a new audit of the agency.

Mr. Sanford is now demanding that South Carolina’s Commerce Department, whose director he appoints, be given access to the state unemployment agency’s numbers, including where applicants are from, their ages, genders and occupations.

The back-and-forth dueling between the conservative governor and the unemployment agency has gone on for weeks, and its executive director, Roosevelt T. Halley, warned that he would have to stop issuing benefit checks to the jobless beginning Jan. 1 if Mr. Sanford did not back down and ask the federal government for the loan.

“It’s absolutely unheard of, it’s insane, for a governor of any state not to request those funds,” State Senator Hugh K. Leatherman, a Republican who is chairman of the Senate Finance Committee, said last week. “I can’t believe anybody would be this heartless, and create such a heartless act on these people.”

On Wednesday morning, at nearly the last minute, Mr. Sanford relented and said at a news conference in his office at the State House that he would request the money. South Carolina is one of three high-unemployment states, along with Michigan and Indiana, to ask for a loan from the federal government to ensure the unemployed continue to receive benefits.

“We will not punish the unemployed for this agency’s incompetence,” the governor said in a statement. But Mr. Sanford continued to insist that he would demand another, more stringent audit of the unemployment office, though Mr. Halley noted that the agency was audited every year by an accounting firm and had been given a clean bill of health.

http://crooksandliars.com/tags/unemployment-benefits

This piece of shit millionaire real estate developer has made himself repugnant even to many of his fellow Republicans with his doctrinaire libertarianism. He is considered a rising star in a crashing party.

Mark Sanford:

A loan without reforming our unemployment benefits system will mean one thing down the road — a tax increase on businesses. What’s already being contemplated will mean roughly doubling the tax employers pay for unemployment insurance. Doubling this tax from the current $300 million will mean a less competitive business climate—and by extension higher unemployment and less economic opportunity.

For the record: my puny shop paid $301.00 in unemployment taxes in '08. Yeah, doubling that would kill me.....

G.D.P. Revision Suggests a Long, Steep Downfall (http://www.nytimes.com/2009/02/28/business/economy/28econ.html?_r=1&hp)

By CATHERINE RAMPELL
Published: February 27, 2009

The country’s gross domestic product fell at an annualized rate 6.2 percent in the last quarter of 2008, the steepest decline since the 1982 recession. Economists are expecting a similar drop in the first quarter of 2009.

“What a ghastly report,” said John Ryding, chief economist at RDQ Economics. “This will almost certainly be the longest postwar recession, and now potentially the deepest one as well.”

With the exception of government spending, every major component of the economy shrank.

G.D.P., a measure of the country’s total output of goods and services, was previously estimated to have fallen 3.8 percent in the fourth quarter of 2008. While economists and Wall Street analysts had been skeptical of that original figure, they had expected a revision closer to a 5.4 percent decline. The economy shrank 0.5 percent in the previous quarter.

The Dow Jones industrial average and the broader Standard & Poor’s 500-stock index were down 0.49 percent and 0.95 percent in early afternoon trading.

Even before Friday’s announcement, economists had been criticizing recent government estimates about the severity of the downturn.

On Thursday the Obama administration released its 2010 budget. The budget projected economic conditions that critics had called overly optimistic, including an estimate that G.D.P. would shrink 1.2 percent in 2009.

“It’s getting to be less and less likely that things are going to be that rosy,” said David Wyss, chief economist at Standard & Poor’s, in response to Friday’s G.D.P. report.

Last quarter, the economy took the biggest hits in exports, retail sales, equipment and software and residential fixed investment.

The downward revisions came primarily because of a contraction in inventories of unsold goods, which the government had previously said had grown. Lower consumer sales sliced off some of the previously reported economic output as well.

A wider trade gap than previously reported — that is, fewer American goods being purchased abroad — also pushed G.D.P. further downward. Exports fell at an annualized rate of 23.6 percent last quarter.

- much more at the link -

The pundits are downplaying and understating how bad things are, don't you think?

For things to "recover" - return to the shithole the country was a few years ago - wouldn't the credit card consumer economy and real estate boom have to return? Is that possible? How will people trust the 401k scam again? Now that they are not buying on credit - because their homes are no longer going up in value and they don't feel secure about their incomes and their retirement - how will they go back to that?

If the "strength" of the economy was all a bunch of hot air and smoke and mirrors, dependent upon people believing in it, and they no longer believe in it, how can it recover?

People are hoping for that "magic" good times feeling to return. But that was always an illusion. Once people have seen through the illusion, where is this magic going to come from now?

If we would all just feel good about the economy - be "bullish" - and start spending, then "confidence" would return and good times would ensue - that is what I hear the pundits saying. But people are not going to do that, because the reality of being poor and insecure trumps the get-rich illusion.

The worst possible thing that could happen would be of they are able to rebuild and revive the economy as it was. Is that still possible? How could it be done?

They absolutely are down playing it, and some of the worst denial I've seen is from democrats. People close to retirement wondering if they should keep their dwindling cash in 401ks, along with those who think Obama is not going to touch Social Security (they evidently saw a different speech than the transcript I read...). Some people are putting up a brave face, but they've got to be scared. Obama is going to have to give some pretty magical speeches to keep people entranced.

1970...

We took home about $300 a week; $1200 a month

Monthly expenses -

Rent - $40 (you could spend $100-150 if you were so inclined)
Food - $200 (we were bachelors and ate out. If you cooked at home, cut that in half.)
Electric - $5
Heat - $20 (average over the year)
Phone - $20 (if you talked a lot)
Car insurance - $20
Gas - $20

You could live on $325 a month. We did. That left some money in your pocket. Obviously if you had kids, or a mortgage, your expenses would be higher.

Now what was wrong with that? Factories were making things, people were buying things.

After 1980, people started saying you shouldn't live that way. You should be investing, you should be buying property. You should have "credit." You should "make your money work for you." That was all presented as the "responsible" thing to do - as a moral imperative. It seemed like a scam to me at the time, as a very bad idea, but you were seen as some sort of moral leper or "communist" if you tried to argue against this. Only "losers" were skeptical or opposed to this.

Meanwhile, manufacturing disappeared, jobs got harder to get, wages went down. Everything got more and more expensive, especially rents. "You need to learn new skills for the new economy" people said and "you need a higher education" in order to "compete" they said. That seemed goofy to me. How many cubicle rats and middle managers can you have? And what good are they?

Everything was traded away in exchange for this glorious stock investment and real estate investment idea.

Now that house of cards has collapsed. The "losers" and "commies" were right all along.

Yet we have people arguing for putting that house of cards back together as the "solution."

California unemployment over 10% "officially"; while I was looking for the best article to post with that info, came across this article: (boldface is mine)



California’s Newly Poor Push Social Services to Brink (Update1)

By Vivien Lou Chen

Feb. 26 (Bloomberg) -- In California’s Contra Costa County, 40,000 families are applying for just 350 affordable-housing vouchers. Church-operated pantries are running out of food. Crisis calls have more than doubled in the city of Antioch, where the Family Stress Center [occupies the site of a former bank.

The worst financial crisis in seven decades is forcing thousands of previously middle-income workers to seek social services, overwhelming local agencies, clinics and nonprofits. Each month 16,000 people, including many who were making $60,000 to $100,000 annually just a few years ago, fill four county offices requesting financial, medical or food assistance.

“Unless we do things differently, not only will we continue to be on life support, but the power to the machine is going to die,” said county Supervisor Federal Glover, who represents Antioch and the cities of Pittsburg and Oakley about 50 miles (80 kilometers) east of San Francisco.

Contra Costa, an East Bay suburban region of more than 1 million, turned thousands of farmland acres into housing in the past two decades, becoming an affordable alternative to San Francisco. Now, the area is being hit by a double whammy, as rising unemployment increases demand for social services, while plunging home values shrink tax revenue and squeeze agency budgets.

County officials made $90 million in cuts during the current fiscal year, and plan to reduce another $56 million, out of a $1.2 billion general-fund budget, in the coming year. County administrator David Twa said he doesn’t expect to see a “gradual recovery” in property taxes until 2012 or 2013.

Safety Net

more at link

http://www.bloomberg.com/apps/news?pid=20601087&sid=as3PyDwmDEQY&refer=home

Oh, on edit, and here's a link to the story on 10.1% unemployment in California:

http://www.reuters.com/article/domesticNews/idUSTRE51Q5RO20090227

OK so it seems like things are going to get a lot worse.

How come so many are talking and thinking as though it won't?

Those 1970's numbers are something else, but from what I can remember that's about right. I think it was 1971 that my parents bought their first house, in a small town in Wisconsin. It was just under 10K, and I'm sure the mortgage wasn't bad at all because it was a VA loan. My dad worked in the foundry then so no idea what he made, but it was early on so he still would've been well enough to do piece work (he moved to less physical jobs as he became more ill). Things weren't all that fancy, but we sure didn't have worries about unemployment or hunger.

I just wanted to note the "after 1980" part. I was born in December of 1980, and I often wonder if that's one of the reasons that we seem to operate in different frames of reference. The post-1980 culture you speak of is my frame for viewing the world because it's all that I have ever known of humans and human society. Thus my misanthropy.

I've seen plenty of other people put 1980 as a sort of cutoff point, as the year when we started the slide towards where we are now. So I guess there is something to it. And I do notice it a lot on DU - the Baby Boomers assume that it's as easy for us as it was for them and that we should all be able to easily afford college and get a six figure job upon graduation or something.

Hell - maybe that's why I didn't get the grooming for college and material success and being a capo that you did as a working class gifted kid. (Yes, I've been rereading posts at OET again.) By my time, there wasn't any point to it anymore because by then if you were born a serf you were going to stay a serf.

I do like the warning about new replies. My answer to your question - they're human, and in my experience humans don't like facing change. I'll admit that I try to talk myself out of worrying and tell myself that my family will be all right. And in terms of scary stressful change, you can't get much scarier and more stressful than losing your ability to provide food and shelter for your family. Especially in a culture like ours where there is no safety net. And for those who have drunk the kool aid and accepted cultural roles and stereotypes and expectations, it's also a loss of their sense of self and to some extent their whole model for perceiving reality.

My mother owns 12 acres of woods and a singlewide trailer - the land was bought before I can remember and the trailer, which we moved into after my father died without a will and our house was auctioned off, is paid off. I guess if things get to the point where my husband and I do lose our jobs and our house, we can pack ourselves and my teenage sister-in-law up and move in with her and try to live off the land as best we can.

Hey Medley, welcome! good insights...especially about humans and change and fear...and lack of reality...so how do you think, or do you think we should, change this mindset?

1980 was a break point, the election of raygun being the prime marker. The thing I noticed most at the time was that hitchhiking became progressively more difficult. I never drove and got everywhere by foot, thumb or bus. Hitching was never a problem, you could always figure on getting where you were going in about twice the time it would take you to drive directly. People would even pick up 2-3 guys at a time. After '80 it dropped off precipitously , to the point were I had to give up hitching in situations where I had to be on time, then gave it up entirely. Chicken or egg, I dunno, people were becoming meaner, more suspicious.

Misty, you're lucky to have that land. With all the farming in my family you'd think we'd have some left, but all of it has been sold by the boomers (my parents and their siblings). My husband and I are just putting away what we can in a local credit union. I know there is money in Florida too but I don't look at that stuff because it hurts my head (it's in trusts and stuff). My inlaws hate me though (wonder why!) so I'm sure it is all in place to skip right over to my kids - which is fine. I know how to grow a garden so I'll survive :)

I'm really glad to see you here, and Kid will be back so you'll have someone more your age too. It is very valuable to have the reflections of those born after 1980 - between all of us we've got to span at least 3-4 generations here.

timely enough msm oped considering this discussion:


February 28, 2009
Op-Ed Columnist
Even Worse for Young Workers
By BOB HERBERT

The employment situation in the U.S. is, if anything, worse than most people realize. And huge numbers of young people, ages 16 to 30, are being beaten down in ways that could leave scars for a lifetime.

Much of the attention in this economic downturn has focused on the growing legions of men and women who are officially counted as unemployed. There are now more than 11 million of them.

But a better picture of the economic distress related to employment emerges when the number of jobless Americans is combined with two other categories of workers: the underemployed (those who are working part time, for example, because they can’t find full-time work) and the so-called labor force reserve, workers who have abandoned their job searches but who would work if employment became available.

This total pool of underutilized labor has now risen above 24 million, according to researchers at the Center for Labor Market Studies at Northeastern University in Boston. That total will only grow in the coming months.

The Obama administration has more than enough on its plate at the moment, but before long it will likely have to consider a range of additional strategies, beyond the recently passed stimulus package, for putting jobless Americans to work.

A comparison of the number of people being thrown out of work in this recession with that of the severe recession of 1981-82 will indicate why. The peak unemployment rate was higher in that earlier recession than today’s 7.6 percent, largely because the last big wave of the baby-boom generation was entering the job market in the early ’80s. Those boomers who couldn’t find work were officially counted as unemployed.

What is different and more frightening about the current downturn is the number of people actually losing their jobs — being laid off or fired. That number is dramatically, dangerously higher.

The government uses two different surveys to gauge employment data. The household survey, based on telephone interviews, showed that job losses in the 13 months that followed the beginning of the 1981-82 recession reached 1.53 million. In the first 13 months of this recession, the number of jobs lost, according to the household survey, has been a staggering 4 million.

The payroll survey, which is based on employment records, showed job losses of 1.7 million in the first 13 months of the earlier downturn compared with 3.5 million in the current recession.

Pick your poison. This is not the kind of downturn Americans are used to.

The ones who are being hit the hardest and will have the most difficult time recovering are America’s young workers. Nearly 2.2 million young people, ages 16 through 29, have already lost their jobs in this recession. This follows an already steep decline in employment opportunities for young workers over the past several years.

Good jobs were hard to find for most categories of workers during that period. One of the results has been that older men and women have been taking and holding onto jobs that in prior eras would have gone to young people.

“What we’ve seen over the past eight years, for young people under 30, is the largest age reversal with regard to jobs that we’ve ever had in our history,” said Andrew Sum, the director of the Center for Labor Market Studies. “The younger you are, the more you got pushed out of this labor market.”

There were not enough jobs to go around before the recession took hold. So the young, the poor and the poorly educated were already suffering. Now that pool of suffering is rapidly expanding.

This has ominous long-term implications for the country. The economy cannot perform well with such a large cohort of young people condemned to marginal economic status.

Young men and women who remain unemployed for substantial periods of time find it very difficult to make up that ground. They lose the experience and training they would have gained by working. Even if they eventually find employment, they tend to lag behind their peers when it comes to wages, promotions and job security.

Moreover, as the economy worsens, even the college educated are feeling the crunch.

According to a report by researchers working with Mr. Sum: “While young college graduates have fared the best in maintaining some type of employment, a growing fraction of them are becoming mal-employed, holding jobs in occupations that do not require much schooling beyond high school, often displacing their less-educated peers.”

Employment problems have festered in the United States for decades. The economy will never be brought to a state of health until those problems are more thoughtfully and more directly engaged. This will become more and more clear with each passing month of this hideous recession.


http://www.nytimes.com/2009/02/28/opinion/28herbert.html?partner=rss&emc=rss

Timely article, Mary, and it makes perfect sense given that the last hired are the first fired (although you also have the companies that will hire the young workers only to push out the more experienced workers who have higher salaries). Any way you slice it, though, it's not looking good.

Hey there MedleyMisty. Good to see you. Good post. Hope you chime in more.