We have seen it in the news, the unemployment rate went up to 9.9% from 9.7, ain’t this recovery grand? The pretzel like mental hoops the elite media has been going through for a year telling us how great the recovery is has most people just laughing at them. In story after story month after month the word “unexpected” placed is placed in front of month after month of bad economic news, followed by the assurance that the recovery is in full swing and the numbers are about to take a drastic turn around. Every month for a year that has been the story.
Check this out form the AP:
Burst of hiring aids recovery, but long slog ahead
The economy got what it needed in April: A burst of hiring that added a net 290,000 jobs, the biggest monthly total in four years. It showed employers are gaining confidence as the recovery takes deeper root.
But people who had given up on finding jobs are gaining confidence, too, and are now looking for work. That’s why the unemployment rate rose from 9.7 percent to 9.9 percent and will likely go higher.
Especially encouraging was that the job gains came largely from private employers, the backbone of the economy. They boosted payrolls by a surprisingly strong 231,000, the most since March 2006.
The new jobs, generated by sectors across the economy, are the first sign that the recovery is adding significant numbers of new jobs — even if not enough to absorb the influx of jobseekers.
“Companies feel more comfortable that growth in the economy and in their own sales is here to stay and that they can start preparing for the future and add to their payrolls,” said Joel Naroff, president of Naroff Economic Advisors.
As a recession hits bottom retailers and wholesalers will let their warehoused inventories fall to a point where they cant do business so they start buying to refill inventories. Those inventories are usually packed at that time because of inflation fears (look at how fast the Euro and Dollar have dropped). Consumers react much the same way as they will decrease spending as much as they can but eventually they need new things and have to restock their pantries with the savings they have built up from their decreased spending. The media did get this right about the inventory replenishing (LINK) and the result is an uptick in employment. This uptick usually doesn’t last long as inventories and consumer pantries are restocked. Remember that if .2% are looking for full time work again, it doesn’t mean they got hired.
The administration said that it is good economic news that the unemployment rate went up by .2% because it means that people who had lost hope and stopped looking for work are looking for work again and thus are “counted”. Oh really?
Than why did the “real” unemployment rate go up by .2% as well? What is the “real” unemployment rate?
The standard unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks.
The “real” unemployment rate, also called the U6 rate, shows those who are available for work and want a full time job, but also have given up. That rate went UP by .2%.
The U.S. jobless rate rose to 9.9% in April, the first increase in three months, but the government’s broader measure of unemployment ticked up for the third month in a row, rising 0.2 percentage point to 17.1%.
The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs. Though the rate is still 0.3 percentage point below its high of 17.4% in October, its continuing divergence from the official number (the “U-3″ unemployment measure) indicates the job market has a long way to go before growth in the economy translates into relief for workers.
So how can people who weren’t looking for work restart looking for work by .2% and at the same time those who have given up looking for work go up by .2%? It’s fishy. The number of people who are out of work for six months or more also went up. Let us not forget that the Federal Government is on a hiring spree of IRS Agents and census workers.
UPDATE - NEW ECONOMIC NUMBERS SHOW IUSB VISION ANALYSIS CORRECT
I have been behind on blogging and even though I got this article on paper a week after it was in my head even I did not expect to have nombers proving my analysis correct so soon. And as always there is that word “unexpected” when this was of course obviously and totally predictable.
AP: Jobless claims rise by largest amount in 3 months
The number of people filing new claims for unemployment benefits unexpectedly rose last week by the largest amount in three months. The surge is evidence of how volatile the job market remains, even as the economy grows.
Applications for unemployment benefits rose to 471,000 last week, up by 25,000 from the previous week, the Labor Department said Thursday. It was the first increase in five weeks and the biggest jump since a gain of 40,000 in February.
The total was the highest since new claims reached 480,000 on April 10. It also pushed the average for the last four weeks to 453,500.
“Although no one expects this volatile series to go in one direction every single week, this is clearly a disappointment,” said Jennifer Lee, senior economist at BMO Capital Markets.
Stocks slid as investors’ already bleak view of the world economy worsened with another drop in the euro and the disappointing U.S. employment news. The Dow Jones industrial average fell more than 250 points in early afternoon trading.
In a separate report, a private research group said its index of leading economic indicators dipped slightly in April. It was the first decline in more than a year. Six of the 10 components on the Conference Board’s index deteriorated. Among them: U.S. residents filed fewer applications to build homes; vendors were slower in delivering supplies to companies; the unemployed filed more claims for jobless aid; and consumers’ confidence dropped.
Speaking of investor and consumer confidence we wrote about that HERE, HERE, HERE, HERE, , HERE, etc. This is happening exactly as we said, there was a bump in hiring due to inventory and pantry restocking but after the immediate bump high job loss would still continue.
More from Yahoo/AP News. Most of the top ten economic indicators down:
NEW YORK – A private research group’s gauge of future U.S. economic activity unexpectedly slipped in April, the first decline in more than a year and a sign that growth could slow this summer, weighing on hiring.
The Conference Board said Thursday its index of leading economic indicators edged down 0.1 percent last month, the first drop since March 2009. Economists polled by Thomson Reuters had expected a gain of 0.2 percent.
The index is designed to forecast economic activity in the next three to six months.
“Slower growth is likely in store for the second half of the year as the boost from inventories fades away,” said Tim Quinlan, economist at Wells Fargo Securities, in a research note.
Goldman Sachs economists expect growth to slow to an annualized rate of 1.5 percent in the second half of the year from more than 3 percent in the first six months of 2010.
Factories have ramped up production in the past 12 months as customers restock shelves. Many companies cut their orders for goods during the recession and instead used up their existing stockpiles. Once inventories are restored to normal historical levels, growth in the manufacturing sector will depend on increases in consumer demand.
The recovery has spread more broadly through the U.S. economy this spring, with retailers and other consumer-dependent industries posting stronger first-quarter profits.
But a drop-off in the construction sector following the end of a government tax credit for homebuyers and a debt crisis in Europe may weigh on growth, discouraging employers from hiring.
“Unemployment claims remain too high to be supportive of lasting job growth,” Quinlan said.