The June jobs report is out and the official unemployment rate is down. The official unemployment rate (which doesn’t take into account those unemployed long-term or the under-employed) declined to 6.1%. The US government reports that we gained some 288,000 jobs in June.
It will be revised downward in a week or so, while no-one is watching. The actual number, as I do the adding and subtracting, is roughly 276,ooo jobs added in June and that is before the revisions come out.
The U6 [that’s the rate for the unemployed, the underemployed and the discouraged], stands at 12.1%, as opposed to the optimistic “official” unemployment rate.
The Labor Force Participation Rate (LFPR) remains stuck for the third straight month in a row at 62.8. This is the lowest participation rate in 35 years – and we are stuck there. I have explained the LFPR before:
[…] [T]his number basically tells us how many people, out of the number of people eligible to work, who are actually employed. The labor force number has suddenly dropped again, from the previous 63.2% to 62.8%, the lowest since 1978. 800,000 people dropped out of the labor force in March. These are people who have simply abandoned the search for nonexistent jobs. That is simply a staggering number.
This means that, despite the bogus, heavily massaged, and virtually meaningless number given to us as the “unemployment rate”, the population of job-eligible people who are working is declining rapidly. […]
I have looked at the number of jobs added in June and hazard a guess that the first revision to come will be a drop from the reported “288,000 jobs added” to 276,000 jobs added based on the following numbers. In June, we added 799,000 part-time jobs, but lost 523,000 full-time jobs, leaving a net gain of 276,000 jobs. There will be, naturally, more revisions coming, but these are the numbers we have to work with for today.
One interesting nugget in the June jobs report was the rise in the number of people who worked part-time.
it’s a number that flops around from month to month — the standard deviation is 287,000 — it jumped by 799,000, which was the largest one-month gain since January 1994. At the same time, there was a 523,000-person drop in full-time workers, the first decline since October.
“It is unusual,” said Stuart Hoffman, chief economist at PNC Financial Services Group. But he said it could be noise. And he notes that most of the part-time rise in June was not in those who want to find full-time work but couldn’t, and instead in those who voluntarily opted to do so. […]
Yeah, you chief
stooge grifter talking head economist for PNC Bank, tell us how the fact that we just traded more than half a million full-time jobs for 3/4 of a million part-time jobs is just noise. Those of us on the ground and in the trenches have noticed that this is a marked trend which has been in place for years now. It isn’t noise, it’s a business plan. But go ahead, please enlighten us about these fucking part-time McJobs and assure us that people who work at these crappy jobs with no benefits are taking them voluntarily. Here’s some noise back at you: most of the jobs available continue to be in the part-time and temporary jobs’ markets. They pay jack-shit, offer no benefits, and are largely in the service industries; fast food, drinking places, and retail sales. But, yeah, we will take them “voluntarily” because there isn’t anything else out there and we want to work. Fuckwit.
Wages are completely stagnant, as they have been for decades, and inflation is increasing. This leads the Fed cartel to talk about raising interest rates, which through some mumbo-jumbo incantations to the great god of money Moloch, will lead to the Fed’s “targeted inflation number” or some such shit. Although how they figure what the target is, considering that inflation is no longer measured by looking at the costs of anything real people have to pay for, is simply another noisy wonderment. The Fed could never have lowered interest rates so much in the first place if we hadn’t had such remarkable wage deflation going on for decades. It’s true that the current zero per cent interest rate has encouraged rampant financial speculation and debt accumulation, but that is only part of the picture. The Fed used the already existent, persistent wage deflation to the advantage of its member banks because they will use whatever tools exist for that purpose. That is their entire purpose actually, and the idea that they might serve the public wad is laughable on its face. We have deflation of wages, but inflation of living expenses. We will see how well these low-paying, part-time jobs hold up as we face the potential of higher interest rates. Don’t forget that while higher interest rates will mean (perhaps) a marginal increase in interest earned on savings, it also means higher interest rates on mortgages, loans and credit cards. It is anticipated by the market fairies that more Americans will suddenly start buying houses now if the Fed threatens to raise interest rates, and that we will therefore see a nice increase in home purchases this summer or fall. Barring “bad weather”, of course. All we have to do is ignore the absolutely flat-lined amount of construction spending, the still high, and growing again, number of foreclosures, and pretend that the houses being bought are not being purchased at pennies on the dollar by rental agencies posing as actual human beings who intend to live in those homes. The whole Fed interest rate manipulation/inflation target/unemployment target is just so much hokum and flimflammery that serves only a relatively few individuals and does nothing productive for the US economy, or the global economy, for that matter.
Corporate profits reach “historic highs” every year. This is mostly because the largest corporations have been laying people off and offering less pay and fewer hours to the workers who remain. Despite the lowering of corporate expenses through the reductions in workforce and the use of automated systems, the cost of goods continues to rise rapidly (I’ll say again; we may disregard the bullshit official “inflation rate” offered by the banks and by government spokesmen; we know how much more we are paying for groceries, rent, heating and gas). We seem to have traded jobs for a soaring DOW, but I’ll remind you that the DOW is not the economy. The real economy was shipped overseas years ago.
Here are some references regarding the jobs market and employment numbers that you might want to read:
“One interesting nugget in the June jobs report was the rise in the number of people who worked part-time.”
“[…] In fact, a disproportionate number of jobs created during the economic “recovery” pay less than $13 per hour, according to a report issued earlier this year by the National Employment Law Project. While US businesses have on the whole added 1.85 million low-wage jobs over the past six years, they have eliminated 1.83 million medium-wage (paying between $13 and $20 per hour) and high-wage (between $20 and $32) jobs, according to the report. […]”
“U.S. Unemployment: Retirees Are Not The Labor Exodus Problem”
by Robert Romano
“[…] Workforce participation, however, is at a 36-year low – comparable to the years of the Carter malaise – while the number of involuntary part-time workers rose by 275,000.[…]”. This article also mentions the Fed, Fannie Mae, and housing construction.
On student loan interest rates:
“Federal student loan interest rates increase by nearly 1 percent this month”