All Articles Tagged "us economy"
The US added 162,000 jobs during the month of July, mostly in retail, food services, financial activities, and wholesale trade, the Bureau of Labor Statistics reported today. The number of unemployed Americans dropped to 11.5 million and the unemployment rate fell to 7.4 percent. The unemployment rate for African Americans also fell to 12.6 percent. However, rates for other groups such as Hispanics (9.4 percent) and teenagers (23.7 percent) haven’t changed. Long-term unemployed Americans — those out of work for 27 weeks or more — make up 37 percent of the unemployed, totaling 4.2 million. That’s 921,000 fewer than last year. And 37,000 dropped out of the workforce all together last month.
Retail added the most jobs — 47,000 — in the last month. Food service and restaurants added 38,000. These are typically low-paying jobs, so there are questions about how much benefit this is for workers and the country as a whole as high rates of poverty and subsistence-level living continue. Food service workers in particular protested this week to raise the pay on these jobs to $15 per hour, what they consider a living wage. Some protesters want restaurants like McDonald’s to raise pay. Some want to unionize. And still others want to press government on the city and/or federal level to raise the minimum wage.
The New York Times reports on the response from the food industry:
Restaurant industry officials say the strikers’ demand for $15 an hour is ludicrous because it amounts to more than twice the federal minimum wage. (The median pay for fast-food workers nationwide is $9.05 an hour.) Industry officials say a $15 wage might drive many restaurants out of business and cause restaurant owners to hire fewer workers and replace some with automation — perhaps by using more computerized gadgets where customers punch in the orders themselves.
Protesters interviewed in that same story talk about being on food stamps and reducing poverty levels through their efforts.
The average hourly wage for workers (excluding private nonfarm workers) was down two cents to $23.98 per hour. Year-over-year, that’s up 44 cents. The number of job gains for May and June were also revised downward.
“We’re continuing to see moderate but unspectacular job growth in the U.S. and that’s consistent with an economy that’s growing at a modest rate,” Sal Guatieri, senior economist at BMO Capital Markets told Forbes.
“I don’t think it’s time to press the panic button,” he added. “”We still think the economy will pick up in the second half of the year as some of the fiscal headwinds abate.”
With a report that experts call “decent…, but not in any way robust,” the Labor Department revealed May unemployment numbers this morning — 175,000 jobs added, the same as last year, but a small increase in the unemployment rate from 7.5 percent to 7.6 percent. The New York Times says it would take five years for the country to get back to full unemployment at this rate.
Other economic factors — the impact of the sequester and the erosion of the “social safety net,” layoffs in the government, and stagnant average hourly earnings — had led to much worse predictions for this report. And the increase in the unemployment rate, the Times says, is likely caused by more people joining in the search for a job. Optimism about the economy has increased and it’s possible that many are seeing some light at the end of the unemployment tunnel.
Still, a former deputy assistant labor secretary, Patrick O’Keefe tells USA Today, that employers aren’t ready to go on a hiring spree. “They’re hiring when they have orders and business sufficient to justify it,” he said. The article notes that the underemployment rate has gone to 13.8 percent from 13.9 percent.
African Americans, who have already been coping with an unemployment rate that’s higher than the general population, also saw an increase in the unemployment rate, from 13.2 percent to 13.5 percent. The same economic and job market forces are taking a toll on black Americans. Also, as we’ve stressed on this site a number of times, the impact of having a weak network is also a factor. Research from Rutgers Business School professor Nancy DiTomaso, reported on NPR, find that 70 percent of the jobs held by the hundreds of white Americans surveyed were due to a tip off from a friend.
“DiTomaso says that one of the consequences of people finding a job this way is that they do not think of themselves as participating or contributing to the reproduction of racial inequality. Many of those whom she interviewed, despite receiving significant help in their careers, felt they’d gotten where they were from hard work alone,” the article continues.
The unemployment rate for Americans between the ages of 18 and 29 is at 16.1 percent, according to Generation Opportunity. For African Americans in that age group, the figure is a shocking 21 percent, higher than Hispanics in this age group (11.7 percent) and women (10.6 percent).
April jobs numbers beat forecasters estimates by a bit, with the Department of Labor announcing that 165,000 jobs were added for the month, pushing the unemployment rate for the country down to 7.5 percent. Experts had predicted that 140,000 jobs would be added, which is the good news. The bad news, according to The New York Times, is the figures for the month are lower than the number of jobs created during the previous months of 2013 and the final quarter of 2012.
The reason for the slowdown is the sequester that went into effect in March mixed with the increased payroll taxes that went into effect at the beginning of the year. Retail sales and manufacturing numbers had indicated that there would be an economic slowdown. Construction actually cut 6,000 jobs and the government, 11,000.
Still, the unemployment rate is the lowest since 2008. “The unemployment rate fell even though the size of the labor force increased, which is a good sign. People enter the labor force when they think there’s a better chance of finding work,” writes Marketwatch. Average hourly wages went up four cents to $23.87 and the average workweek fell just a bit to 34.4 hours. On the flip side, “professional and business services, which includes high-paying fields such as accounting, engineering and architecture, added 73,000 jobs. Retailers added 29,000 and health care 19,000,” reports The Washington Post.
According to the Bureau of Labor Statistics, the black unemployment rate fell one-tenth of a percent to 13.2 percent, still well above the national average. The participation rate actually went up to 61.5 percent, up three-tenths of a percent.
The unemployment rate for adults between the ages of 18 and 29 is 11.1 percent. For African Americans in that age range, the figure is a staggering 20.4 percent, according to figures quoted by Generation Opportunity, a youth advocacy group.
US Added Just 88K Jobs In March, But Unemployment Rate Among African Americans Drops To 13.3 Percent
The latest monthly employment numbers are out, and though the country did add jobs, the number of them — 88,000 — is not enough to make an impact on the widespread joblessness that still plagues the U.S. Still, the unemployment rate dropped by a tenth of a percent to 7.6 percent.
Even better, the unemployment rate dropped .5 percent for African Americans in the past month, going from 13.8 percent to 13.3 percent (seasonally adjusted). It had been as high as 14 percent in December 2012.
The New York Times points out that the economy has been adding jobs for the past 30 months. However, compared to the 268,000 added in February, 88K is pretty paltry. There are 11.7 million people out of work.
“The slight decrease in the unemployment rate occurred not because more unemployed people got jobs, but because the number of people active in the labor force — i.e., working or looking for work — fell,” the paper reports. Since the black unemployment rate fell as much as it did, it looks like this could be having an impact on that figure. The Bureau of Labor Statistics reports that, among African Americans, the employment participation rate also went down from 61.7 percent in February to 61.2 percent in March. “The labor force participation rate has not been this low since 1979, when it was also 63.3 percent, at a time when women were less likely to be working.”
The government continues to shed jobs while areas like professional services, business services, and healthcare continue to add staff. Unfortunately, jobs paying low wages, like restaurant work, have added the most staffers. Temp work is also relatively robust, but those jobs aren’t leading to full-time work, as they usually do. Manufacturing and retail have cut jobs, 3,000 and 24,000 respectively.
“This is an extremely troubling labor-market report, given how strongly stocks have rallied and how much expectations have been lifted with optimism around the consumer and housing,” Bank of the West economist Scott Anderson tells The Wall Street Journal. He adds that higher taxes and the sequester are already having an impact.
The Journal says that average wages went up by a penny to $23.82 and the average workweek went up .1 hour to 34.6.
Warren Buffet is making headlines yet again for proclaiming that the richest Americans should pay more taxes. While not at all a new statement from him, his message is perking up ears anew due to the compromise struck by President Obama in order to get the debt ceiling raised. While the deal contains $3 trillion in spending cuts affecting middle-income and poor Americans, it contains no new taxes on the rich. The superwealthy Buffet is upset at the tax protection Congress routinely doles out to him and his ilk — and he thinks that now is the time to stop this “coddling” (as he calls it). And Warren is not alone. At the same time, some megarich citizens understandably disagree. Here is what other paid in the shade Americans think about higher taxes, and what the wealthy can do to help our nation grow.
Warren Buffett: The Rich Should Pay More Taxes
Buffet recently told The New York Times that Congress should stop sparing the super-rich from paying their fare share as the rest of America copes with cuts in salaries and social programs. In his op-ed, the billionaire investor outlined that: “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as ‘carried interest,’ thereby getting a bargain 15 percent tax rate.” By comparison, most Americans face a 25% tax rate on wages.
Let’s first understand that a downgrade on ourselves is not atypical. Someone asked me the other day, “Why would we downgrade ourselves?” I explained, “S&P not only trade for domestic investors but it also trades funds used by foreign investors.” It’s no different than you being honest on your resume. You don’t want to lie and come across less credible if the truth is found out. S&P does this to protect its index and image. Now, I am not saying the S&P is accurate or inaccurate. What I am saying is it is not out of the ordinary. My main concern about their move is, why now?!?!
What I had to look at is, is there a comparable case that yielded a different result; you know, like in law. Attorneys often look at the outcome of similar previous cases to use as a defense in court. This is what we should do. Now, understand that the debt ceiling is simply raising the amount of debt we are legally able to take on. There are limits placed on how much debt can be held by foreign investors and foreign nations, and there is a limit of how much debt the nation can carry overall. It doesn’t measure our resilience, innovation, gross domestic product output or our potential. Remember, as cocky and confident as he may be, even Donald Trump had credit problems in his career, leading to him filing bankruptcy twice!
So why would the country take on debt? As the government grew to a size beyond the true percentage of the private sectors’ output that it taxes it, it must stimulate spending in the economy until those deficits recover. They do this so they aren’t always laying off government workers or consolidating facilities every time there are deficits or recessions. This happens when the government overforecasts the revenues it expects to collect. The government takes risks by spending to help stimulate the economy so it can retrieve those tax revenues. So, it sometimes creates an intentional self-inflicted deficit, hoping to recoup the monies spent in taxes during economic growth. This is called an economic injection.
Now that we know why the government borrows in the first place, let’s look at what this means. We all have our opinions of President Obama. Quite frankly, we seem to have stronger opinions on this presidency (whether good or bad) than we have had on any other. We can call it desperate times, racism, increased poverty levels, or whatever. Our opinions have been strongly against or in support of the president. This heightened intensity has caused much scrutiny and criticism. However, let’s simply look at our past to get a better idea of this so-called downgrade.
According to the Congressional Research Service, since 1962 alone, the debt ceiling has been raised 74 times; 10 times alone in 2001 under President Bush’s watch. This shows that the debt ceiling was raised under 8 previous presidents! Is our recent downgrade targeted at the president or because of the bickering within our political system? The fact is, our country was in economic constraints before Obama took office and can very likely persist past his presidency. What we are seeing is economic residue from President Bush’s presidency. Now, I would be totally dogmatic if I were to say that Bush deliberately ran our country into financial trouble. In fact, his desperation to return us to Clinton Administration surplus was part of his motivation for such knee jerk reactions, i.e. The War on Iraq.
Historically, wars have strengthened the U.S. economy, but he failed to realize that we now operate as a service economy. We are not a country that manufactures as much as we did during previous wars, where we were the ones providing the widgets and gadgets to the military and to the nations we blew up. In essence, Bush attempted to inject into the economy but those funds leaked out of our economy into foreign (manufacturing) nations, simply because we were no longer in position to capitalize on infrastructural needs of the destroyed nations and our military. So my question remains, why now? Why with the debt ceiling constantly being raised historically, numerous recessions over the past 30 years, assassination of Kennedy, scandal from Nixon, and deepening debt brought by the 2nd Bush, why downgrade now? We’ve heard the stories of banks charging higher interest rates on loans and denying them altogether for Blacks. I wonder, why now?
Now, our new AA+ rating is actually a great rating but it simply shows that America is no longer at its credit- worthy best. China’s AA- credit rating is two steps beneath America’s, however there remains strong praise for China’s progress. High standards are set for us. Countries like Canada have grown and thrived despite having a mediocre credit rating, so is this a political attack or the true economic outlook of the country?
The credit position of the nation is important, but living on credit isn’t always the best option. Businesses can be started, vehicles can be purchased and education can be attained without loans. Though the government may be seen as less credit worthy, it has no bearing overall if “we the people” are worthy or not.
Devin Robinson is a business and economics professor and author of “Rebuilding in the Black Infrastructure: Making America a Colorless Nation” and “Blacks: From the Plantation to the Prison.” Contact him at email@example.com.
(CNBC.com) — U.S. Federal Reserve officials said on Tuesday the economy is operating well below full capacity and full recovery is a way off, in comments suggesting no urgency to begin tightening financial conditions.
“The pain is still with many of us to be sure, and we are a long way from a full recovery,” Richmond Federal Reserve Bank Jeffrey Lacker told a regional Fed forum.
Lacker, known to be one of the more aggressive anti-inflation hawks among policy-makers, said there were signs of stabilization in housing markets, but overbuilding means that sector won’t help lift the recovery.