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BLS Releases July Unemployment: 6.2% Up from 6.1% in June

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The U.S. Bureau of Labor Statistics (BLS) released the July Unemployment figures on August 1st. The Seasonally Adjusted Unemployment Rate was 6.2% up from 6.1% in June. The Unadjusted Unemployment rate was also up from 6.3% in June to 6.5% July. Of course the spin-doctors at the BLS said it was “virtually unchanged”.

BLS vs Gallup Unemployment NumbersIn a surprising turn of events, the unadjusted BLS numbers actually agree with the Gallup numbers with the rare occurrence that the BLS numbers are actually higher than the Gallup numbers for the first time in 17 months.

Of course, we shouldn’t get too excited because the “adjusted numbers” are still a bit on the low side and the smoke and mirrors coming out of the BLS have simply shifted to the Employment numbers.

Employment Numbers

According to the commissioner of the Bureau of Labor Statistics monthly report, “Total non-farm payroll employment increased by 209,000 in July, the same as its average monthly gain over the prior 12 months. In July, employment grew in professional and business services, manufacturing, retail trade, and construction.”

So we might begin to wonder if Employment went up, how did unemployment also go up? Of course, the [Read more…] about BLS Releases July Unemployment: 6.2% Up from 6.1% in June

Government Shutdown Delays Unemployment Data

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Due to the government shutdown the Bureau of Labor Statistics is not publishing the regular Unemployment statistics.

The Federal Reserve Bank of Atlanta President, Dennis Lockhart, says that it is fortunate that the FED chose not to begin “tapering” the money stimulus under the circumstances.  “We avoided a potentially very awkward situation of reducing stimulus just on  the eve of what now has developed” he said.

UnemploymentWhether the Quantitative Easing is actually having much of an effect on unemployment or not is a discussion for another day. But as we said in a recent article entitled: What’s So Bad about Shutting the Government Down? since we don’t have BLS numbers we will turn to the free market and get our numbers elsewhere. Besides, free market numbers are probably more accurate anyway.

Speaking of accuracy, according to [Read more…] about Government Shutdown Delays Unemployment Data

New Unemployment Law and Lawsuits in New York

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New York City has enacted legislation that would bar employers from discriminating against unemployed job applicants effective June 11, 2013. This legislation has been met with dismay since many believe that it will lead to disruption in the hiring process.

Furthermore, a large number of lawsuits can also be expected under this new law. While the New York City Council which formed the legislation tried to protect the interests of employees, like most legislation it just ends up making the process more complex.

Effects of the New Law

LawsuitThe new law that is in place is definitely going to make hiring a mess. The reason is that unemployed people who get rejected can target the business in expensive lawsuits. No business owner likes being vulnerable to lawsuits especially in the case of employment scenarios.

The main target of the legislation is to prevent and ban employers from discriminating in the case there are unemployed job applicants. The New York City Council had brought forth the law based on [Read more…] about New Unemployment Law and Lawsuits in New York

Minimum Wages vs Unemployment

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Do you honestly think the government can legislate wealth? Can they somehow, with the stoke of a pen, make everyone rich? When you say it that way it seems ludicrous but the President seems to believe it. He doesn’t seem to understand the relationship between unemployment and minimum wages.

I just came across a perfect real life example that illustrates what happens when the government tries to legislate wealth. My friend Jeff just posted this on Facebook. “My job was cut from 40 to 25 hours a week so that my employer will not have to pay health insurance due to the (UN) Affordable Health Care act. My insurance went up $100 so that the IRS can enforce the (UN) Affordable Health Care Act. Thank you Mr. President.” So this is how the government “helps” the poor through legislation… cut their hours and raise their taxes.

In today’s article Jeffrey Tucker gives another example from his experience.

The Basement Beneath the Wage Floor

There are certain sounds that tend to make people crazy. Think of nails on a chalkboard. An infant screaming nonstop on a long flight. A piercing whistle that won’t go away.

Now we need to add another: a U.S. president who thinks he can legislate high wages into law. For anyone who knows the basics of economics — not distorted by a bogus central-planning mentality — hearing this is like torture. It’s painful. It makes you crazier and crazier until you finally want to yell, “Make it stop!”

This is how I felt when President Obama said the following:

Minimum Wage “Let’s declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families.”

Why stop there? Let’s also declare that everyone should make $9,000 or $9 million per hour. If all that stands between us and total riches is the word of a president and an action by Congress, let’s get on with it!

Does Obama really not get what’s wrong with this approach? I’ve long disagreed with him, but I’ve never really thought he was ignorant. But even from the earliest interviews I’ve read, he does seem to have a tin ear on economic topics. He doesn’t seem to get where wealth comes from. He doesn’t seem to understand how prices work. And now we can be certain that if he understands how wages work, he isn’t willing to let on. [Read more…] about Minimum Wages vs Unemployment

Health Insurance Options for Unemployed Workers

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Health Insurance Options-

Health Insurance Options

Finding yourself without a job is stressful. There are many decisions to make when you are unexpectedly laid off, and the worries are overwhelming. Healthcare – or lack thereof – often tops the list of concerns for the newly unemployed.

Although many people automatically opt for COBRA coverage after learning that their position has been eliminated, it’s important to know that there are other options available. A little homework could deliver significant savings and provide peace of mind in knowing that your family has healthcare coverage while you look for another job.

An independent healthcare plan might be your best option, particularly if you and your family are in good health. The higher the deductible you choose and the higher the of out-of-pocket costs you’re willing to incur, the  lower your monthly premium will be. Accidents can happen at any time, but if you feel you’re close to landing a new job and you want to minimize your monthly costs, you may want to choose a high-deductible policy and consider it catastrophic-only coverage. Keep in mind that all insurance policies now cover annual exams, such as well woman visits and pediatric check ups.

People with pre-existing conditions are sometimes skeptical about choosing an independent healthcare plan. While it’s true that much of the Affordable Care Act, which stipulates that no one can be denied health coverage regardless of health status, are not yet all in place, there are provisions that protect children. If one of your minor dependents has a chronic illness and has been denied healthcare coverage in the past, he or she can now be covered. It’s true, though, that [Read more…] about Health Insurance Options for Unemployed Workers

How Redundancy Insurance Can Help You Cope With the Risk of Unemployment

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Editor’s Note:

In the U.K. unemployment insurance is called redundancy insurance and it is available from private insurers. In the U.S. although there is State Unemployment Insurance it is difficult if not impossible to find supplemental (private) unemployment insurance although John Hartline, an insurance industry veteran, tried to get insurance companies to provide it, as reported in this article from the N.Y. Times. ~Tim McMahon, editor

 

Redundancy Insurance :

As the news tells us on an almost daily basis, the employment market is more fragile now than it has been for a long time. The current economic crisis sees no signs of abating and more companies are going into administration than we have ever known before which has resulted in over 2.51 million currently being unemployed in the UK (source:office for national statistics).

During such troubled times, one of the primary concerns that all of us have is how we would support ourselves and our dependents should the next company in crisis be ours.

This risk applies to small businesses and large corporations alike and the fear of loosing financial security for ourselves and our families is going nowhere.

The Introduction of Redundancy Insurance

Redundancy InsuranceThankfully, there is a solution to this worry that ensures you can meet your bills and maintain your current standard of living should you be made unemployed through no fault of your own.

Redundancy cover has been created in direct response to the uncertainty in the employment market specifically to protect the income levels of individuals who are [Read more…] about How Redundancy Insurance Can Help You Cope With the Risk of Unemployment

The Impact of Unemployment on Housing

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Whether you believe the accuracy of the 7.8% unemployment rate announced by the Bureau of Labor Statistics this fall or that the government is manipulating the unemployment numbers to affect the presidential election, one thing is certain: the government isn’t funding potential home buyers’ lack of ambition when it comes to a milestone investment such as financing a home. Unemployment rates are only a piece of the puzzle when it comes to understanding why some U.S. families may be redistributing funds they had previously set aside for a home sweet home. The bigger picture suggests that a reduced sense of urgency, types of employment, and the unique circumstances of the “baby boom” generation will also keep the real estate market stagnant at least into the next few years.

Unemployment Impacts Housing

Unemployment impacts housingPurchasing a home has long been a big financial undertaking. For many, the thought of a looming home loan becoming more and more swollen with interest over the next 20-30 years isn’t exactly the most alluring aspect of having your own hearth to decorate each holiday. In short, it’s a decision you can drag your feet to make; combine that with the fact that the market is currently tipped in favor of buyers who have more time and reduced pressure to find a quality, affordable home without fear of their options disappearing. In this buyer’s market, families looking for a new home know they have the luxury of more and better options when it comes to financing and overall home prices and they’re taking their time. According to CNN Money, home prices are down on a national average of 34% (although home prices have increased five months in a row as of October 2012) although they’re predicted to increase in the coming years, the increase won’t be substantial enough to spur would-be homeowners into a buying frenzy. [Read more…] about The Impact of Unemployment on Housing

Unemployment, Part-time Workers and Obamacare

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When the most recent unemployment data was released just a couple of days after the second Presidential debate, there was some speculation that the numbers were “rigged” or “fudged”. We’ve been saying for a long time that even though they should be two sides of the same coin, the “Employment” numbers don’t track with the “Unemployment” numbers.

See: Employment vs. UnEmployment.

Basically, what the comparison chart shows is that unemployment is falling faster than employment is rising. Historically, in a recovery employment rises faster than unemployment falls.

But this time somehow “magically” unemployment is falling faster than employment is rising. How can that be?

Discouraged Workers are not the Answer

Unemployment- Part-time workerSome possible explanations up until this point were that people had given up looking for work (became “discouraged workers”) and so they were no longer counted as unemployed under the standard U-3 definition. This would of course make the U-3 number look better but wouldn’t indicate an improving economy. However logical this possibility sounds, the data does not hold up.   If we look at the Bureau of Labor Statistics numbers for Unemployed persons by duration of unemployment we can see that the number of people unemployed for more than 27 weeks in September 2011 was 6,217,000 but in September 2012 that number had fallen to 4,835,000 so the long term unemployed had fallen considerably.

In the table below we see the number of “discouraged workers”  in thousands according to the Bureau of Labor Statistics. Once again we see [Read more…] about Unemployment, Part-time Workers and Obamacare

Was Jack Welch Right on Twitter? Are Unemployment Numbers “Unbelievable”?

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Jack Welch on Twitter: Unbelievable Jobs Numbers

Unemployment Numbers “Surprisingly Good”-

On Friday, October 5th, just two days after the first Presidential debate the Bureau of Labor Statistics released the unemployment data for September, which were “surprisingly good”. The experts were not expecting such a large drop. The Seasonally adjusted unemployment rate was 8.3% in July and had fallen to 8.1% in August and then the unemployment numbers for September came in at a shocking 7.8%.

Upon hearing these numbers, Jack Welch sent a Tweet from his Twitter account that has enraged Democrats. He said,

Jack Welch

  • @jack_welch
    Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.

Jack Welch has an amazing resume,  the former CEO of General Electric, a best-selling author, a lecturer at the MIT Sloan School of Management and the founder of the Jack Welch Management Institute, etc.

Media Pounces on Jack Welch for Twitter Comments

But of course, that didn’t stop the Media from pouncing all over him. Huffington Post called his Tweet “Demented” and of course, the White House dismissed him as “ludicrous”.

“That’s a ludicrous comment. No serious person believes that the Bureau of Labor Statistics manipulates its statistics,” said Alan Krueger, chairman of the White House Council of Economic Advisers.

I don’t know where Mr. Krueger has been over the last 20 years, but John Williams of Shadowstats.com has made quite a name for himself disbelieving BLS numbers for some time now. And we have published several articles about how the Unemployment numbers don’t match up with the Employment numbers. See: Employment vs. Unemployment and Is the Government Fudging Unemployment Numbers?  We published both of these articles long before the Presidential debate and Jack Welch’s Tweet.

As a matter of fact, James Dale Davidson founder of the National Taxpayers Union and author of Blood in the Streets, The Sovereign Individual, and most recently Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World wrote many years ago that he believed that Bill Clinton was fudging BLS numbers. So accusations of BLS fudging are nothing new.

As a matter of fact, it might be [Read more…] about Was Jack Welch Right on Twitter? Are Unemployment Numbers “Unbelievable”?

What is Full Employment?

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In the world of employment data, unemployment statistics get a lot of attention. They have a huge impact on the economy as a whole and they also affect several other areas. Although a certain percentage of unemployment is the norm in every economy in the world, economic theory has a concept known as full employment. What exactly is full employment and why is it significant to economists?

Full Employment= Job Eutopia

Full employment is a theoretical scenario that occurs when the entire labor force is being used in the most efficient way possible. All of the skilled labor has a job in the field that they want to be in and all of the unskilled labor has a satisfactory job as well. It is possible for an economy to have full employment, although it’s not very easy to pull off.

See Labor Immobility and the Labor Participation Rate for some limiting factors in the pursuit of full employment.

Frictional Unemployment

Although the term “full employment” sounds like everyone is working, that isn’t necessarily the case. Even during times of full employment, there are still some workers who are not working. Most of these people are considered to be in frictional unemployment. What exactly is frictional unemployment? Frictional unemployment is a term that is used to describe those who are in between jobs, but are still in the workplace. For example, if you are working in a job, and you determine that you don’t like your employer, you might decide to quit and look for a new job. During the time period where you are looking for new employment, you are considered to be in [Read more…] about What is Full Employment?