More Bad News in June Jobs Report

In recent months, analysts have been pointing to a supposedly improved job situation for workers. Voluntary minimum wage increases at companies like Walmart allegedly pointed to an upward movement in wages due to increased competition. Workers purportedly were feeling more secure in their jobs and more willing to explore new possibilities. Despite a first quarter slide in economic growth, the economy was apparently poised to bounce back. The proverbial ‘rosy scenario’ was finally appearing on the horizon.

Much of this optimism, however, was surprising news to the middle class, and today’s jobs report showed why. The headline — 220,000 new jobs and the unemployment rate dropping to 5.3 percent — appeared to confirm the ‘rosy scenario.’ Yet the underlying data present a very different story. These numbers point to an enduring fact of this so-called ‘recovery’ — the middle class has been left behind.

For example, the 220,000 new jobs in June sound like a step towards real improvement. However, when combined with the downward revision of 60,000 over the previous two months, the net creation is only about 160,000. In fact, the average monthly job growth so far this year (208,000) is far below the average in 2014 (260,000). That is hardly anything to write home about and certainly doesn’t deserve glowing media headlines.

Unemployment appears to have fallen, but mostly for the wrong reasons. The underlying numbers reveal a large drop off in people employed or looking for work—more than 400,000 —accounting for much of the decline in the unemployment rate. Continue Reading

There Is Less to the Employment Numbers Than Meets the Eye

Photo credit: Ken Teegardin via Flickr, CC BY-SA 2.0

Today’s headlines trumpet the gain of 280,000 jobs in May and the additional 32,000 jobs in the previous two months.  This good news, however, masks the disappointing numbers that come hand in hand. Even with today’s increases, the average monthly job creation in 2015 is only 217,000, which is far lower than the nearly 260,000 last year. That said, job creation remains sluggish at best.

Additionally, the labor force participation rate of 62.9 percent remains at the average it was last year. In fact, it is still over 3 percent lower than it was at the beginning of the financial crisis, and roughly where it was at the height of the Great Inflation of the late 1970s. Also, the unemployment rate rose to 5.5 percent. This increase was caused by May’s labor force rising by 85,000 more people than the combined May job increase plus March and April’s revision. That fact further illustrates that job creation is not even keeping up with the growth in the labor force. That said, despite the apparent jump in jobs, more people were unemployed. The average workweek remains stuck at 34.5 hours, as it has been for the past four years.

When all of these numbers are taken into account, it paints a much fuller picture of the serious crisis in the job market.  Despite pumping more than $3.5 trillion into the economy and keeping interest rates at historic lows, the Federal Reserve’s policy appears to have failed. Continue Reading

Another Jobs Report, Another Disappointment

Unemployed workers line up at a state office in California (public domain photo via FEMA)

The headlines today don’t tell the whole story. While 223,000 new jobs in April sound like a positive development for our economy, the cold, harsh reality is that millions of Americans are still struggling to find work—and those who are lucky enough to be working are facing stagnant wages amidst rising prices.

It is disingenuous to say that the unemployment rate is truly 5.4 percent. That number fails to account for those who have given up looking for work—a cohort that is now higher than it has ever been before. When you add those people to the equation, the unemployment number is much closer to 11 percent.

The workforce participation rate, just 62.8 percent, is hovering near its lowest level since the late 1970s. Even among the prime 25-54 age group, the number remains unfathomably low. That means that millions of Americans have simply given up trying to find a job—no wonder the unemployment rate has fallen.

Where’s the recovery for these unemployed workers?  Once again, the current discretionary monetary policy of the Federal Reserve System has failed to provide a sustained boost to our economy, creating only uncertainty. The Fed obviously doesn’t know what to do from here. The market is unsure what to expect.

There has to be a better way to conduct monetary policy. Congress must introduce and pass the Monetary Commission bill. Americans deserve equitable prosperity, not growing economic disparity. Let’s fix the dollar. Continue Reading

Steve Wynn: “Real inflation is much higher than they say it is”

The front page of the Drudge Report today links to an article reporting on an interview businessman Steve Wynn, founder and CEO of Wynn Resorts, gave to a local PBS station in Nevada.  In it, Wynn offers a more cogent and coherent analysis of the miserable state of the economy and its impact on working families than we have heard from any of the Republican presidential candidates to date.

Here’s an excerpt:

Well, the idea that America is in the midst of a great recovery is pure fiction. It’s a lie. It’s a jobless recovery,” Wynn said. “Because recoveries are marked by the level of real employment. And if you count the people who have left the work force, real unemployment is 15 to 20 percent.”

Not only is unemployment much higher than the “official” rate of 5.5 percent, but Wynn said the Consumer Price Index, used to measure inflation, is also rigged in such a way that it doesn’t accurately reflect what real Americans experience on a daily basis. According to the U.S. Bureau of Labor Statistics, the U.S. had -0.1 percent inflation for the 12 months ended in March 2015. Inflation doesn’t exist.

Wynn says that’s a sham.

“If you take real inflation, and you’ve got to count energy and food and all that stuff, real inflation is much higher than they say it is,” Wynn said. “My employees’ take home pay, in spite of the increases we give them, their paychecks are 90-cent paychecks, 90 cents on the dollar.

Continue Reading