The Fed Is Boxed In
By Jack Lavery Nov 10, 2009 9:25 am
And the box gets smaller as more data is released.
The Bureau of Labor Statistics (BLS) released the October employment situation on Friday. Consternation at the market opening to the jump in the unemployment rate from 9.8% in September to 10.2% in October gave way quickly to a more balanced reaction as nonfarm payrolls continued to drop, but again at a slower pace.
Payrolls fell 190,000 in October, exactly the number we had forecast in our research piece a week ago. The 190,000 payroll employment decline was moderately worse than market consensus expectations, which envisioned a fall of 175,000. Manufacturing and construction led the October jobs drop.
It was encouraging that the August employment decline, previously reported at 201,000, was revised to less of a drop, 154,000, and September’s employment fall, initially estimated by the BLS at 263,000, was pared to a 219,000 drop. That’s 91,000 jobs in net positive revisions. Also encouraging was a 34,000 worker rise in the temporary help area.
The pace of employment declines has been slowing for roundly a year. Based on current BLS data, nonfarm payrolls dropped an average of 645,000 per month from November 2008 through April 2009. In the May through July 2009 period, payroll declines averaged 357,000, while in the last three months of data, August through October, the average monthly decline in payrolls slowed to 188,000.
Per BLS, in October, average hourly earnings for “production and nonsupervisory workers on private sector nonfarm payrolls” rose 0.3%. In the last three months, average hourly earnings have advanced at a 2.8% annualized pace. In the last 12 months, average hourly earnings have advanced 2.4%, while average weekly earnings have only increased 0.9% due to declines in the average workweek. In October, the average workweek stood firm at 33 hours. In manufacturing, the workweek rose by 0.1 hour to 40, and factory overtime increased 0.2 hours in October. The unemployment rate is a lagging indicator, and will likely move irregularly higher prior to peaking around 11% in mid-2010. At 10.2%, the current unemployment rate is the highest since 1983, but still below the early 1980s peak of 10.8%.
The severity of the unemployment rate is, however, grossly understated by the headline measure of 10.2%, or 15.7 million people unemployed. It excludes the 9.3 million people working part-time, because their hours have been cut, or they're unable to find a full-time job. Another 2.4 million people aren't counted in the 10.2% headline, including people who have looked for a job within the preceding 12 months, but not in the four weeks before the latest monthly survey week. The 2.4 million figure above includes 808,000 discouraged workers who have given up trying to find a job because they believe there isn’t one available for them. A more broadly defined measure of unemployment and underemployment measures 17.5%, higher than the 17.1% previous high in December 1982 for the comparable metric.
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2009-11-10 09:43:02
$450 million could solve the problem....
What if Thomas D. Schauf wus right in what he wrote back in 1992....
"The U.S. Government can buy back the FED at any time for $450 million (per Congressional record). The U.S. Treasury could then collect all the profit on our money instead of the 300 original shareholders of the FED. The $4 trillion of U.S. debt could be exchanged dollar for dollar with U.S. non- interest bearing currency when the debt becomes due. There would be no inflation because there would be no additional currency in circulation. Personal income tax could be cut if we bought back the FED and therefore, the economy would expand. According to the Constitution, Congress is to control the creation of money, keeping the amount of inflation or deflation in check. If Congress isn't doing their job, they should be voted out of office. Unfortunately, voters can't vote the FED or its Chairman out of office."
oh well, maybe the turnips in Congress are having to hard of time with those California Banders.
"The U.S. Government can buy back the FED at any time for $450 million (per Congressional record). The U.S. Treasury could then collect all the profit on our money instead of the 300 original shareholders of the FED. The $4 trillion of U.S. debt could be exchanged dollar for dollar with U.S. non- interest bearing currency when the debt becomes due. There would be no inflation because there would be no additional currency in circulation. Personal income tax could be cut if we bought back the FED and therefore, the economy would expand. According to the Constitution, Congress is to control the creation of money, keeping the amount of inflation or deflation in check. If Congress isn't doing their job, they should be voted out of office. Unfortunately, voters can't vote the FED or its Chairman out of office."
oh well, maybe the turnips in Congress are having to hard of time with those California Banders.
2009-11-10 11:03:16
Real unemployment rate is 22.1%
http://www.nypost.com/p/news/business
/doctor_note_required_to_re
ad_this_xUd1QgPrRNwN7MXlX9BkKP
http://www.nypost.com/p/news/business
/doctor_note_required_to_re
ad_this_xUd1QgPrRNwN7MXlX9BkKP
2009-11-11 18:20:09
This assumes you should believe the government
which you should not.
There are "lies, da_ned lies, and statistics."
The productivity numbers are a da_n lie: http://tinyurl.com/yh3ywdh
As GP posted above, the unemployment number is a statistic.
And as of yesterday, the Fed itself admitted the recovery is complete BS.
The ONLY reason the markets are going up, as you so correctly point out is that the Fed, Congress, and banks that bought Congress are punishing the savers and real producers in the economy by destroying their hard earned dollars. But as long as the manipulated, Monopoly stock markets go up, it's all rah, rah. This is just sick!!
There are "lies, da_ned lies, and statistics."
The productivity numbers are a da_n lie: http://tinyurl.com/yh3ywdh
As GP posted above, the unemployment number is a statistic.
And as of yesterday, the Fed itself admitted the recovery is complete BS.
The ONLY reason the markets are going up, as you so correctly point out is that the Fed, Congress, and banks that bought Congress are punishing the savers and real producers in the economy by destroying their hard earned dollars. But as long as the manipulated, Monopoly stock markets go up, it's all rah, rah. This is just sick!!
2009-11-12 07:27:04
Bernanke learned wrong lesson
Bernanke, one of the the "Failed Men" not yet exiled into lucrative speaking engagements along with Taxcheatgeithner, Summers, and Rubin, might be a "learned student of the Great Depression", but he learned the wrong lessons.
Having failed to see the problem, having denied the problem, having mis-diagnosed the cause of the problem, one wonders why anyone listens to a word he says.
And a simple look at short rates shows that the FED FOLLOWS the MARKET on short rates- it does not really control much of anything but the Zerox machine.
Part of the lesson of the Crash to come will be the Publics' realization that the FED is Helpless to prevent a meltdown. Bernanke will be more scorned than ex-"worldsaver" Greenspan. But he will always find well paying consulting gigs, no matter how dis-credited he becomes. Discredited indeed.
Having failed to see the problem, having denied the problem, having mis-diagnosed the cause of the problem, one wonders why anyone listens to a word he says.
And a simple look at short rates shows that the FED FOLLOWS the MARKET on short rates- it does not really control much of anything but the Zerox machine.
Part of the lesson of the Crash to come will be the Publics' realization that the FED is Helpless to prevent a meltdown. Bernanke will be more scorned than ex-"worldsaver" Greenspan. But he will always find well paying consulting gigs, no matter how dis-credited he becomes. Discredited indeed.
2009-11-12 13:51:39
The pace of employment declines has been slowing for roundly a year.
What happens when things stop getting worse 'more slowly' and start getting worse more rapidly?
Government spending and hope are the only things standing between this fraudulent recovery and massive foreclosures, bankruptcies and layoffs. Which is going to die first, government spending or hope?
We are approaching the tipping point faster than we think.
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