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All Da King's Men

Jobs Report - Heading In The Right Direction ?

By Da King Published: July 4, 2010

The official Bureau Of Labor Statistics (BLS) job numbers for June are in. The U.S. lost 125,000 jobs for the month. President Obama said this showed the "economy is heading in the right direction."

Losing jobs is the right direction ? Then what would be the wrong direction ? Me so confused.

In spite of the job losses, the unemployment rate actually fell to 9.5%. How did that happen ? I'll let the Associated Press (AP) tell you:

The jobless rate did come down in June from 9.7 percent the month before. But that was mainly because 652,000 people abandoned their job searches. People who are no longer looking for work aren’t counted as unemployed.

Which means the real unemployment rate is much higher than 9.5%. And many of those who are working are working part-time. Here's the AP again:

All told, 14.6 million people were unemployed in June. An additional 11.2 million have given up their job searches or are working part-time but would prefer full-time work. That adds up to nearly 26 million Americans, and an "underemployment" rate of 16.5 percent.

There is a glimmer of a bright spot in the midst of these numbers. The job losses were mainly due to 225,000 temporary census workers being let go. The private sector actually created 83,000 jobs (I'm going to call these summer jobs for teenagers). However, even an 83,000 increase in private sector jobs means we're falling further behind. Here's the AP a third time:

The 83,000 jobs added by the private sector was a better performance than in May, when private job creation nearly stalled. But it fell far short of what the economy needs — at least 200,000 jobs a month — to bring down the unemployment rate.

It takes around 100,000 jobs created per month just to meet the demand of the new workers entering the workforce.

The AP also pointed out that the effects of the stimulus package will begin wearing off in the second half of the year, meaning whatever artificial bump the stimulus provided to the economy will be gone. We'll find out what shape our economy is really in following that.

Unless Obama decides to borrow even more money we don't have for more artificial stimulus to cover up the problem a bit longer. He's signaling that he wants to do just that. Here's AP one last time:

The fate of the economy will hinge on whether it can stand on its own. President Barack Obama acknowledged the slow pace of the recovery and used the new jobs figures to argue for more stimulus spending and extended unemployment benefits.

"We're not headed there fast enough for a lot of Americans," the president said. "We're not headed there fast enough for me, either."

Yikes. How did that old country song by Tennessee Ernie Ford go ?

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

These days, the company store is Uncle Sam. We owe him a bundle, and it just keeps on comin'.

Good thing we're heading in the right direction.



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