November 09 Unemployment Report – My Monthly Perspective

by John Galt

December 6, 2009

The celebrations, fireworks and head fake by the markets on Friday illustrate the celebrations of our usual monthly data dump from the BLS but those numbers, insane as they appear to be from the ground, created the “hope and change” long promised by the current administration when in reality it has nothing to do with government policy but more so the impact of a cyclical recession running out of gas as some businesses attempt to profit during this seasonal peak. You heard the blubbering from the “you better buy stocks now” economists who’s agenda is set not by independent analysis but by the direction their firms demand so they can move the dead fish off their decks and into your accounts. One of my favorite and oft repeated themes was the “increase in temporary hiring the last three months” which was heard over and over and over again but never put into context by these clowns as they only study statistical rather than fundamental reasons for the rebound in this area. There are two considerations when you hear this and number one is obvious: It’s Christmas you idiots, of course temporary help is hired.

Then of course there is the harsh reality some of us witness at ground level the Bubbleconomists deny and do not even attempt to understand what Middle and Lower class Americans are enduring right now. People are desperate. People are freaking out. The moral dilemmas facing the average American oft ignored by these Ivory tower elitists and their huckster friends on the networks are ignored and not considered within the greater scheme of things. There is a harsh reality setting into the mindset of Americans nationwide and that is the fact that things are only getting better for those within 100 miles of D.C. or tied to certain groups now entitled to permanent government benefits and employment preferences.  The other reality with regards to the large “hurrah” about the temp numbers is a failure to understand that many companies, primarily in the small and mid-size business categories (Less than 300 employees; just an estimate on my part) have and are continuing to reduce pay anywhere from 10-30% per week and/or reduce hours which believe it or not is reflected in the average hours statistics but nor discussed as an important issue by the Bubbleconomists.

First, let us look at continuing claims (Not Seasonally Adjusted) and get some idea of the severity of the downturn we are still engaged in.

CCNSAcontclaims

I guess one could call this “good” news as the Bubblevisionistas would call it as we are now back to the 1976 and 1981 recession levels. Of course the fact that our population was considerably smaller at those points in time escape the pumperdumpers so we’ll call this news “better” but in reality the people losing their benefits are in for the seriously hard times that their grandparents who endured the Great Depression of the 1930’s had to deal with except this time the concepts of “forced bankruptcy” and the fact that the “new” bankruptcy laws do happen to favor the very banksters their taxpayer dollars were used to support and ensure that their losses were socialized. Despite the rah-rah of our President and the talking heads on television, there is an underclass of our citizens now entering and becoming the main stream with a very bitter attitude towards the very institutions they once idolized a decade ago.

While that number looks like an improvement, take it in context of the level it is at over the number of years, then look at this chart from CLUSTERSTOCK.com and their Chart-of-the-Day from Friday December 4th:

CLUSTERSTOCKcotd12_4

That’s right boys and girls. As more and more qualified citizens (key word there) drop out of the work force and as more and more citizens (once again, a key word there) who are qualified to work but elect to accept the welfare bonanza or are forced out of their profession due to other circumstances (Translation: Construction, illegals, 1+1, etc…) this number has exploded to a saddening and maddening point of no return since the manufacturing base has been eviscerated.  If you do not believe me, here are some more graphs to reflect the Civilian Participation rate. The first chart is a 20 year figure to demonstrate the dive:

CIVPART20years

That percentage might look horrid but when you see the raw numbers, not seasonally adjusted from the BLS, those percentages start to make sense:

participationNSA11_09

Basically in this “Lost Decade” we have been pretty much flat at the end of the period and no real increase in the number of civilians participating despite normal population growth. To get some idea of just how drastic this change is, you have to refer to a 25 year chart to understand the drop in the percentage of participants:

CIVPART25years

From this graph, without putting my usual assortments of comments and lines, rocket science is not a requirement to deduce that the percentage of participants in the work force has zoomed all the way back up to 1987 levels. How’s that Hopey-Changey thing working out again?

But I digress.

While the Average Hourly earnings are up as inflation when properly interpreted reflects:

AVGHOURLYEARNINGSnsa

the BLS charts also reflect that the Average Hours worked remains mired in a better than decade long low and no massive improvements are in sight once the Christmas retail season ends:

AVGHOURSallpvtNSA

Both of those graphs are not seasonally adjusted so the drops and distortions you see are what is happening in reality, not in the world of statistics. Thus one can conclude that fewer people are working fewer hours but being paid more per hour to do it. Until you start breaking down the industries impacted. Unfortunately when one goes to a long term historical charts, this is not your Mom and Dad’s America any longer:

AWHNONAG_Max_630_378

I guess if we are happy to see a 30% drop in the average hours worked in a 45 year period, we should all be Happy-Happy Joy-Joy and shut our mouths and be glad that with 20-30% less pay than we had before, we get 30% fewer hours than before to go with but we’re still “full time” employees according to the BLS and Political types. Gang, this is the reality and I don’t care how the clowns on CNBC, FBN or Bloomberg spin it, small business in America is dying or being murdered by a bunch of regulatory hyper enforcing bunch of buffoons, just as it was warned to be in the book Atlas Shrugs.

Nondurable Manufacturing is still at Pre-World War II levels:NDMANEMP_Max_630_378

Construction jobs? Yeah, right, don’t believe the NAR/BLS/Obamabs hype:

USCONS20YR

I had to use a 20 year chart for perspective and as you can see, we are now at levels well beyond the boom years and back towards the numbers from the late 1990’s. Hardly a ringing endorsement that we are going to see this “massive” recovery any time soon. Without construction, especially new home and commercial construction, this economy is not recovering any time soon.

Even the proponents and participants in Bubblevisionland are impacted by this as since the only financing that appears to be happening is that which the U.S. Government buys or guarantees and the Financial Service industry is back to pre-Dot.com crash levels:

USFIRE10yr

For those that long for the “Happy Days” of Fonzi and cool American made cars, well, the “Goods Producing” category tells the tale:

USGOOD50yr“I like Ike” is all that chart screams.

ILIKEike-pin

If you think Ike was popular back in the day, well, Truman was to a point until he started to try to shove more idiocy down the throats of American business. And come to think of the parallels with this administration and the Bushies, this chart should make you reflect as here is a 50 year chart to reflect the level of Durable Goods Manufacturing  employment, something we have not seen since Truman was running the circus in D.C.:

DMANEMP50yearAnd one more time, manufacturing will lead us out of the recession via exports making what again? 49 Chevies?

That’s right, modern technology will lead us out of this recession?

USINFO15yr

Of course  I meant it would lead India out of their slump, not the United States. When you see that chart you realize just how severe this problem is as the areas with increases in employment are sadly the “service” industries, medical/education (mostly Government related), and of course Government at every level:

USGOVT_Max_630_378

While this might give one pause to wonder just how our deficit laden government can hire anyone else, keep in mind that the Census employees will be hired and immediately distort the January through May statistics to reflect a huge spike in employment even though it is temporary. IF anyone with more than one brain cell turns off the Bubbleconomists like Steve LIESman and starts to reflect on the real data, PRIVATE business and corporations are not indicating any massive hiring spree for permanent jobs and the hours are not recovering at a pace consistent with any recovery in the past 30 years. We will see nothing more than the proverbial “jobless” recovery in the next five to six months and that should be alarming to anyone considering our economy recovered, recovering or getting healthier any time soon. The only thing recovering right now are those involved in the upholstery business and that’s about it.

As usual, I have my own monthly charts and since my favorite charts are the reality vs. the perception, let’s start with Table A-12, Section U-6 chart which I like to call the “real” unemployment rate (Although Shadowstasts.com does a better job of incorporating the unemployed contractors trying to find work):

A12U6SAjgflaNOV09

Despite the seasonal adjustments, still an ugly chart. When compared with the Non-Seasonally adjusted chart it is not providing much hope:

A12U6SEASNONjgflaNOV09

Thus my prognostication for the future is to not “get your hopes up” for any sustained recovery for the private sector.

The Birth/Death Harry Potter calculations are also out and what do we see? A normal seasonal minimum but still quite some fiction being estimated in those numbers:

BIRTHDEAHADJjgflaNOV09

The most amazing thing to me in the entire report is that some way, some how, Obama forgot to have his staff add construction jobs!

BDCONSTRUCTIONjgflaNOV09Maybe they just copied last years report to save time. When you see the differential when you subtract the fiction of Birth/Death from the totals, you see we still are losing jobs, we still are not adding jobs and thus validating the Private Sector theory of “we’re too terrified of what is next to hire anyone” theory of of our current economic situation:

BDEXTRACTjgflaNOV09

The revision circus continues building up optimism that all is well and the 10% who are unemployed should quit their bitching. Of course you know I feel otherwise but explaining to a politician that numbers and statistics are often manipulated to make them look and feel good is hard to get through their skulls unless it is attached to a check with six figures on it.

REVTRACKINGjgflaNOV09

Well, there appears to be some consistency that those who don’t count, won’t be counted and the lack of participation doesn’t mean squat to those in charge. Lastly the differential in the revisions continues building up momentum for the big January reset when the BLS does its annual “oops my bad” on their piece of monthly fiction and resets their calculations:

DIFFTRACKjgflaNOV09

Thank goodness the Obama team had training from the Bush and Clinton teams on how to move the numbers. The reality we are witnessing gang is that despite the feel good crappola being spoon fed to the masses to get them shopping, the pain we have felt is not over. Banks are not lending, businesses are still failing, and lastly the housing situation is about to become somewhat more severe along with the commercial real estate situation. Get ready for a wild 2010 gang and perhaps, just perhaps, if we get lucky we will not kill our dollar along the way.

I doubt it though.

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8 Comments

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8 responses to “November 09 Unemployment Report – My Monthly Perspective

  1. Lawrence Roberge

    Hmmm…should we prepare to watch on our favorite bubblevision, the COUP of America?

    Oh wait, this would be “reality TV”…then it would be the RIOTS of American Cities; NOW in full techno-color, Dolbe sound, High def, and living color of bloodshed….

    Sounds like 2010 will start off and venture forward with a BANG, Boom, and perhaps a serious body count.

    LOTS of pissed off unemployed out there!

    If ANY “Community Organizers” use them and direct them, we could have a variety of protests, riots, and even occupation of banker’s and politician’s mansions.

    BOY, would THAT be great “reality TV”!

    Worth TIVOing it!

    Happy Days!

    L roberge

  2. Jim ODonnell

    Thanks John for the detailed analysis on unemployment.

    From your charts and stuff, these are the most important items in brief: Long term unemployment going up while short term unemployment going down [this is the government lie], the civilian employment participation rate is at a GENERATIONAL low and falling.

    There is only one thing that the government does with excellence: LIE, and all the economic numbers are collected and distributed by the government.

    Remember the planets three greatest lies: (1) the check is in the mail, (2) I will not c_m in your mouth, (3) I’m from the government and I’m here to help you.

  3. John S

    Great analysis. Please keep doing this as it helps confirm what we see on a day to day basis. I am a small business owner in the retail business. The customer has no confidence and is spending only what they absolutly have to. The most interesting number out this week was that Department store sales were down 4.5% in November vs. last November. LAST NOVEMBER SUCKED! Being down 4.5% against those numbers is a disaster.

    I’m tired of hearing that things are getting better. They just aren’t and you show it very well. Thank You.

  4. Rock2fox

    God I love this blog. Thank you.

  5. Lawrence Roberge

    http://www.worldtribune.com/worldtribune/WTARC/2009/me_jordan0940_12_04.asp

    Saudis ‘in a panic mode’ as Shi’ite rebels move North from Yemen

    THIS WILL AFFECT OIL PRICES WITHIN DAYS OR WEEKS!

    There are several things to think abut based on this news story.

    First, this could be Iran opening up its third (or fourth) front. Front one, Israel versus Iran over the atomic bomb.

    Second front, Iran based Hezbollah and Syria facing down Israel in Lebanon and the Golan Heights area (with chemical weapons and ballistic missiles as well as an “attempt” at covert nuclear weapons development in Syria).

    Third front, Iranian ships delivering supplies to Shi’ ite rebels in Yemen and the Yemeni’s incapable of stopping the revolt and the rebels now making progress northward into the Saudi nation.

    The possible Fourth front is the Iranians facing down the Western nations over the nuclear bomb issue-BUT, with ships in the Persian Gulf-possibly blocking the Gulf of Hormuz to block oil shipments.

    Ok, think about it.

    IF the rebels backed by Iran make progress in Saudi Arabia, this achieves several Iranian agendas.

    First, Iran could have control of the SOUTHERN coastline of the Gulf via control of Saudi shoreline.

    Iran could blunt any attempt by Israel to fly over the Saudi territory during a bombing raid on Iranian nuclear targets.

    Finally, Iran could still block up oil shipments by using the Saudi coastline to further its agenda against the West. Furthermore, with their mini-subs, swarming high speed attack boats, and high speed torpedoes and Sunburn missiles from Karge Island, the Iranians could control the oil shipments and block US and other Western naval fleets from access to the Gulf.

    We could be over a “barrel” VERY SOON.

    I am certain Western Intelligence agencies are reviewing events very closely at this point.

    Worth food for thought and prepping with urgency.

    Best wishes.

    Lawrence

  6. koios

    JG-

    My father was the Chief Administrator & Director of Budget for the Railroad Retirement Board from 1954-1963 when he retired. Today, those two positions are separate and pay well in excess of $100K/year. In 63 my father made $14K. Even with inflation math, well…we can do the math. Fed employees have their cake AND can eat it too. I have canned all but two essential employees out of 7 in the past year. My biggest sectors are the following:

    1. Section 8 Housing repairs.
    2. Chase Manhattan bank owned housing repairs.

    I use 4-5 temps every week and have no need for permanant employees. Bob from Accountemps shows up every Monday at $15.15/hr to do all but invoices. Last year, I paid $30K to an office manager.

    Things will never be the same again. I can make just about as I did and will not be a duma** again without employees. Plus get to be in Blowing Rock 5 days a week. Beats Charlotte to hell.

  7. Jas. K.

    I continue to be amazed that people do not consider that “new unemployment claims” dropping might — just might — somehow reflect that there are less jobs left in the private sector to lose!

    This is like the person who discovers that lying flat on the ground means one is less likely to fall, and therefore could be said to be “living a balanced life.”

    We have been “living on Grace” for the past 6+ years, thank God, and I find being “an unpaid minister in the marketplace” to also be better for my mental health. I guess the government would consider me as “having a job” because of this … even though I don’t have a paycheck.

  8. nate

    Hey everyone…it like this… you cant piss down my back and tell me it is raining. The gov, the media, the libs are all trying to masquarade like they know what they are doing. They (the gov.) finally have succombed to making tax breaks for businesses. This was a few weeks ago. Instead of spending on “moose crossings” signs over here in idaho, they should have been helping businesses make the bottom line so they can start feeling like hiring again.