Economics On The Grounds Hasn’t Changed Much Since ’08. In Some Respects, Like In Unemployment, It’s Gotten Worse. Real Unemployment Is Over 20%, A Crazy Figure. The Real Economy Is Basically In A Depression.
Why are all these stores closing nation wide, if the stock market is up and things are peachy?
The stock market was up, and things were peachy and every one was loving higher taxes, obamacare, a collapsing dollar, and millions leaving the work force?
By: Douglas A. McIntyre, Samuel Weigley, Alexander E.M. Hess and Michael B. Sauter | 24/7 Wall St – Fri, Feb 1, 2013 12:50 PM EST
> Forecast store closings: 200 to 250
> Number of U.S. stores:1,056
> One-year stock performance: -36.8%
Sears Holding Corp.
> Forecast store closings: Kmart 175 to 225, Sears 100 to 125
> Number of U.S. stores: 2,118
> One-year stock performance: 8.8%
> Forecast store closings: 300 to 350
> Number of U.S. stores: 1,100
> One-year stock performance: -53.6%
> Forecast store closings: 125 to 150
> Number of U.S. stores: 1,114
> One-year stock performance: 50.7%
Barnes & Noble
> Forecast store closings: 190 to 240, per company comments
> Number of U.S. stores: 689
> One-year stock performance: 8.95%
> Forecast store closings: 500 to 600
> Number of U.S. stores: 4,471
> One-year stock performance: -2.2%
> Forecast store closings: 150 to 175
> Number of U.S. stores: 872
> One-year stock performance: 80.8%
> Forecast store closings: 450 to 550
> Number of U.S. stores: 4,412
> One-year stock performance: -68.1%
Here’s some stats from the Bureau of Labor Statistics to put the current situation into perspective:
US population: 302 million
Civilian noninstitutional population: 233 million
(This is the number of Americans older than 16, who aren’t in prison or the Armed Forces)
Labor force: 153 million
Employed: 146 million
Unemployed: 7.6 million
Not in labor force: 79 million
US population: 313 million
Civilian noninstitutional population: 244 million
Labor force: 155 million
Employed: 143 million
Unemployed: 12.3 million
Not in labor force: 89 million
So let me summarize that:
– Since Dec 2007, work-age population has risen by 11 million, mirroring the 11 million rise in population. Yet the number of employed has fallen by 3 million, which means 14 million that need jobs don’t have them, just from population increase.
– But note that the ‘labor force’ only rose by 2 million: that means that (a) lots of Americans have retired and left the work force, and (b) there are people reaching work age who aren’t being counted as in the work force.
– Official unemployment is up by 5 million, and those not in the labor force is up to 89 million. Unemployment was 4.9% in 2007, 7.9 now (officially).
– Lets compare as percentage of population:
Labor force: (2007) 50%, (2013) 49% – labor force is shrinking as percentage of population
Unemployed/not in work: (2007) 26%, (2013) 28% – less people are working relative to overall population
– And work force to not in work: (2007) 51%, (2013) 57% – this is a key number, because the number of people not in work relative to those capable of work has risen sharply.
– And workers relative to those not in work: (2007) 54%, (2013) 62% – which means that the number of those not in work is rising rapidly to approach the number in work.
– These numbers are actually worse, because it doesn’t count children and military personnel, who are also dependent on workers. So, basically, for every worker there is more than one person dependent on him (313 pop, 143 workers).
Here’s a report that those not in the labor force are growing twice as fast as population: http://dailycaller.com/2012/10/10/americans-outside-labor-force-growing-twice-as-fast-as-population/
Now some of those not in the work force are so by choice, for example housewives. That’s fine. But not all. As you say, most of the jobs created while Obama has been president are low paying and/or part time, so in fact of those 143 million workers, millions are living on low paying work. This shows the loss of mid-wage jobs and the gain of low wage: http://money.cnn.com/2012/08/31/news/economy/low-wage-jobs/index.html
And here’s the current percentage that have low paying jobs: 28% http://thinkprogress.org/economy/2012/08/02/627021/workers-low-wage-jobs/?mobile=nc)
So of the 143 million workers, 40 million are earning less than $23,000. This is up from 25%, about 35 million, in 2006 http://inclusionist.org/files/lowwagework.pdf
The stock market doesn’t reflect economic fundamentals. The ‘stock market’ that we watch is the DOW and the NASDAQ, which are both owned almost exclusively by the super rich. Its ‘value’ isn’t responsive to the economic situation on the ground, but instead to the irrational whims of stock brokers, and to the dictates of government.
If they know government will assure financial backup, which they do, stock will go up. The big problem in ’08 was the financial corporations lost faith that the government would back them, especially in the housing market. Fannie and Freddie were bankrupt, and the banks with mortgage holdings lost faith in the dollar so to speak. So the stock fell in price. This is why, after letting Bear Sterns fail as a warning to non-cooperative bankers, the government made sure to let everyone know that no one else would fail.
Economics on the grounds hasn’t changed much since ’08. In some respects, like in unemployment, it’s gotten worse. Real unemployment is over 20%, a crazy figure. The real economy is basically in a depression.
In short, we’re in a depression. And the stock market numbers are covering it up, because the stock market is now decoupled from fundamentals, and responsive to insider trading on wall street and government action (e.g. the Fed’s setting of interest rates).
Furchtgott-Roth to Moneynews: Economy Might Shrink Again in First Quarter
The January job numbers reported Friday are weak, and gross domestic product (GDP) growth stands a good chance of remaining negative in the first quarter, says Manhattan Institute Senior Fellow Diana Furchtgott-Roth.
Non-farm payrolls gained 157,000 last month, a bit lower than expectations, and the unemployment rate rose to 7.9 percent from 7.8 percent in December.
Meanwhile, the economy contracted 0.1 percent in the fourth quarter.
Economy Lost 2.84 Million Jobs in Jan., Yet Press Pretends Seasonally Adjusted 157K Jobs Added Represents What Actually Happened
Following the governmemt’s Employment Situation Summary yesterday, two words were noticeably absent at the Associated Press (here, here, and here), Bloomberg, Reuters, CNBC, and the New York Times: “seasonally adjusted.”
While they told their readers of the number of jobs supposedly added in total (157,000) and in other sectors, the fact remains that in the real world, before seasonal adjustment, the government told us, as is the case every January, that employment declined steeply. In January 2013, the government estimates that 2.84 million jobs were lost.
This failure to refer to seasonal adjustments is odd, because while these same outlets typically use these two words when describing the weekly unemployment claims results released each Thursday and several other government reports which appear throughout the month, they typically fail to do so in describing the monthly number of jobs added or lost — and for that matter, the unemployment rate, which was really 8.5 percent in January, only 0.3 points below where is was in January 2012 (December’s, November’s, and October’s differentials were 0.7, 0.8 and 1.0 points, respectively).
Read more: http://newsbusters.org/blogs/tom-blumer/2013/02/02/economy-lost-284-million-jobs-jan-yet-press-pretends-seasonally-adjusted#ixzz2Jqe231oO
The Economy Is Entering A ‘Virtuous Circle’?
As for the economy, he sees the likely emergence of a “virtuous circle” forming, with more homes being built (because we’re “underhoused”), home prices rising, people spending more, etc.
Kyle Bass Tells ‘Nominal’ Stock Market Cheerleaders: Remember Zimbabwe
#1 The mainstream media was absolutely shocked when it was announced that U.S. GDP actually contracted at an annual rate of 0.1 percent during the fourth quarter of 2012. This was the first contraction that the official numbers have shown in more than three years. But of course the truth is that the official numbers always make things appear better than they really are. According to John Williams of shadowstats.com, U.S. GDP growth has actually been continuously negative all the way back to 2005 once you account “for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting.”
#2 For the entire year of 2012, official U.S. GDP growth was only about 1.5%. According to Art Cashin, every time economic growth has fallen that low (below 2 percent annually) the U.S. economy has alwaysended up going into a recession.
#3 According to the Conference Board, consumer confidence in the United States has hit its lowest level in more than a year.
#4 For the week ending January 26th, initial claims for unemployment rose to 368,000. In future weeks, watch to see if it goes above 400,000. If we hit that level, that will be a sign of real trouble for the economy.
#5 During the first full week of January, an astounding $114 billion was pulled out of U.S. banks. That is the largest amount that we have seen moved out of U.S. banks in one week since 2001.
#6 The U.S. Mint was on pace to sell more silver eagles during the first month of 2013 than it did during the entire year of 2007. Why is so much silver being sold all of a sudden?
#7 The payroll tax hike that went into effect in January has reduced the paychecks of average American workers by about $100 a month.
#8 Several important measures of manufacturing activity along the east coast missed expectations by a huge margin in January. The following summary is from a recent Zero Hedge article…
So much for the latest “recovery.” While everyone continued to forget that in the New Normal marketsdo not reflect the underlying economy in the least, and that the all time highs in the Russell 2000 shouldindicate that the US economy has never been better, things in reality took a deep dive for the worse, at least according to the Empire State Fed, the Philly Fed, and now the Richmond Fed, all of which missed expectations by a huge margin, and are now deep in contraction territory. Moments ago, the Richmond Fed reported that the Manufacturing Index imploded from a 9 in November, 5 in December and missed expectations of a 5 print at -12: this was the biggest miss to expectations since September 2009.
#9 An astounding 33 percent of all “subprime student loans” are at least 90 days past due. Back in 2007, that number was only at 24 percent. Could this be evidence that the student loan debt bubble is beginning to burst?
#10 Time Inc. has just announced that it will be eliminating hundreds of jobs.
#11 Blockbuster recently announced that they are closing hundreds of stores and eliminating about 3,000 jobs.
#12 Toy maker Hasbro has announced that the size of their workforce will be reduced by about 10 percent.
#13 According to a new Pew Research study that was just released,one out of every seven adults in the United States is financially supporting their kids and their parents at the same time. Pew Research is calling it “the Sandwich Generation”.
#14 According to one recent Gallup poll, 65 percent of all Americans believe that 2013 will be a year of “economic difficulty“, and 50 percent of all Americans believe that the “best days” of America are now behind us.
#15 According to a different Gallup poll, Americans are now more pessimistic about where the U.S. economy will be five years from now than Gallup has ever recorded before.