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Bush Economy Sheds 51K More Jobs; Unemployment Highest in Four Years

Posted by Joshua Holland, AlterNet at 3:01 PM on August 1, 2008.


Where's the bottom? Nobody knows.
unemploymentabstract
unemplyment

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And all the bad boys are standing in the shadows
All the good girls are home with broken hearts

And I'm free ... free fallin'
Yeah I'm free... free fallin'

-Tom Petty

The U.S. economy has lost jobs for the seventh consecutive month, but I don't want to hear any whining, OK?

Dean Baker:

The unemployment rate rose 0.2 percentage points to 5.7 percent in July, its highest level since March of 2004. The establishment survey showed a loss of 51,000 jobs overall, with the private sector shedding 76,000 jobs. The private sector has now lost 665,000 jobs since it began shedding jobs last December. The economy as a whole has lost 463,000 jobs since December.

Other measures of labor market health also indicate weakness. The number of workers working part-time involuntarily jumped by 291,000. This number is now 1,741,000 above the low for the cycle in April of 2006. Partly as a result of the large rise in the number of involuntary part-time workers, the Bureau of Labor Statistics U-6 measure of labor underutilization, which includes discouraged workers and involuntary part-time workers in addition to those counted as unemployed, rose to 10.3 percent in July. This is only slightly below the 10.4 percent peak in the last downturn, which was reached in September of 2003.

Other measures in the household survey also indicated a further weakening of the labor market. The percentage of unemployment due to workers quitting their job dropped from 9.8 to 9.7 percent, the share of the long-term unemployed jumped from 18.4 percent to 19.1 percent (although this is partly due to the extension of benefits), and the number of discouraged workers rose sharply.

On the establishment side, the bulk of the job loss continues to be in construction and manufacturing, but most sectors are reporting job losses.

Yesterday, I wrote about some of the methodological issues behind the most commonly-cited government statistics on inflation.

Similar controversies swirl around the unemployment rate, of course.

The Bureau of Labor Statistics puts out a bunch of unemployment indices. The "official" unemployment rate (U-3) excludes marginally employed workers, those who have given up the job hunt, etc. Note that Baker, unlike most economic reporters, mentions the U-6 series, which includes discouraged workers and involuntary part-timers.

The latter, more inclusive measure averaged just under 7 percent in Clinton's final year in office, was at 7.4 percent when Bush was inaugurated, rose to 8.1 percent the month before the 9/11 attacks and has been over 8 percent for all but one of the 83 months since. It's now in double digits -- at 10.3 percent -- the first time we've seen that since March of 2004.

Here's a comparison of the two series, both seasonally-adjusted:

Click for larger version
(click for larger version)

Click for larger version
(click for larger version)

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Tagged as: economy, unemployment

Joshua Holland is an editor and senior writer at AlterNet.


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why we are not going to be saved by Obama
Posted by: Ydotheyhateus on Aug 1, 2008 12:47 PM   
Current rating: 3    [1 = poor; 5 = excellent]
I have a BS and MS in Electrical Engineering and have worked in the telecom sector for about 8 yrs.

During a debate between a Kerry supporter (Robert Reich) and a Bush supporter, on NPR during the '04 election, a question was asked on the impact of globalization on job loss.

Both Reich and Bush supporter were in agreement that globalization is good for the American worker.
They both insisted that only low-level jobs would be outsourced in the high-tech sector, and that US would continue to retain highly skilled R&D positions.

I shook my head as I turned off the radio.

These idiots have no idea how R&D is done. It takes years to develop a engineer to get to a point where he/she can perform real R&D work.

The basic training for any engineer starts with doing simple assigned tasks. Such training can last 2-3 yrs. Then major pieces of development work is assigned for another 3-5 yrs.

In general, it takes any where from 4-8 yrs before an engineer can be responsible enough to do real R&D work i.e. coming up with ideas for new product and be able to come up design and implementation specification.

I could not believe the complete ignorance on the part of Reich and the other idiot to claim that US would still retain high-tech R&D work while outsourcing basic development work.

Obama is surrounded by free-market fundamentalists just as McPain.

I don't expect any change as far as economic policy is concerned with an Obama administration.

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The Birth/Death Model
Posted by: FoonTheElder on Aug 2, 2008 12:04 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
The biggest crock in the employment statistics is the contrived numbers added to employment by the birth/death model.

The birth/death model is the net new employment due to new businesses over those lost in businesses that ceased to exist.

According the government statistics, since February there is almost a net of 1 million more jobs due to the gain in brand new businesses over those who are no longer in business. Pretty hard to believe in this economy.

The biggest whoppers are in Construction and Leisure & Hospitality. According to the BLR, there are 154,000 new jobs (net of losses) in new Construction businesses and 369,000 new jobs (net of losses) in new Leisure & Hospitality businesses. In reality there must be a huge negaitve in Construction, where businesses have been closing every week.

So when you see the stats showing a job loss, on average you can probably subtract another 100,000 jobs each month due to crooked statistics.

http://globaleconomicanalysis.blogspot.com/
2008/08/jobs-decline-7th-consecutive-month.html

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Have we become so leftist here on AlterNet...
Posted by: Quannah on Aug 3, 2008 3:48 PM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
that they are "centering" all the posts here?

;-)

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1929
Posted by: modeler on Aug 4, 2008 11:08 AM   
Current rating: Not yet rated    [1 = poor; 5 = excellent]
History repeats itself. Paper money backed by overspending and foreign bondholders isn't even worth the stuff it is printed on. The occurence of the crash is only a question of time. Thank you George and your Dick for changing from a budget surplus to the worst deficit yet.

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