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What Today’s Job Numbers Mean
The economy added only 120,000 jobs in March – down from the rate of more than 200,000 in each of the preceding three months. The rate of unemployment dropped from 8.3 to 8.2 percent mainly because fewer people were searching for jobs – and that rate depends on how many people are actively looking.
It’s way too early to conclude the jobs recovery is stalling, but there’s reason for concern.
Remember: Consumer spending is 70 percent of the economy. Employers won’t hire without enough sales to justify the additional hires. It’s up to consumers to make it worth their while.
But real spending (adjusted to remove price changes) this year hasn’t been going anywhere. It increased just .5 percent in February after an anemic .2 percent increase in January.
The reason consumers aren’t spending more is they don’t have the money. Personal income was up just .2 percent in February – barely enough to keep up with inflation. As a result, personal saving as a percent of disposable income tumbled to 3.7 percent in February from 4.3 percent in January.
Personal saving is now at its lowest level since March 2009.
American consumers, in short, are hitting a wall. They don’t dare save much less because their jobs are still insecure. They can’t borrow much more. Their home values are still dropping, and many are underwater – owing more on their homes than the homes are worth.
The economy has been growing but almost all the gains have gone to the very top. As I’ve noted, this is the most lopsided recovery on record.
You will hear other theories about the hiring slowdown, but they don’t wash.
It’s not due to “uncertainty” about the economy. That’s a tautology – the economy’s future is always uncertain, especially when consumers don’t have the dough to keep it going.
It’s not because of fears about a European recession. Europe has been in the skids for some time now. Besides, the American economy doesn’t really depend on exports to Europe.
And it’s not about gas prices or the rise in healthcare insurance premiums. Both are up, but they’ve been trending up for many months.
It’s because consumers’ pockets are almost empty.
We’ll avoid a double-dip, but the most likely scenario in coming months is a continuation of the same – an anemic jobs recovery.
President Obama will claim the economy is improving – and, technically, it is. Growth this year will most likely average around 2 percent. The problem is, most Americans aren’t feeling it in their paychecks.
Mitt Romney will claim the economy is in terrible shape – and there will be enough evidence to justify his “cup-half-empty” rhetoric.
But when it comes to explaining what’s really wrong with the economy, Romney is the perfect foil for Obama because Romney represents the richest of the rich – a man who raked in more than $20 million last year, and paid a tax rate of just 13.9 percent (lower than much of the middle class).
He made that money by buying up “under-performing” companies – that is, companies that employed more people than they needed to, and carried less debt than was necessary to show big profits (interest on debt is deductible from company income). Romney’s firm, Bain Capital, made him and his colleagues fortunes by firing workers and loading companies up with debt.
And there’s America’s economic problem in a nutshell.
Romney and his ilk are doing wonderfully well, but the rest of the nation is still in deep trouble. Yet the U.S. economy can’t fully recover on the spending of millionaires.
The President has already announced that this election is about America’s surge toward ever-greater inequality. He’s right. And this painful recovery shows it.
It would be sadly ironic if Obama lost the election because the economy responded to widening inequality exactly as expected.
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.
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This is why deficit reduction cannot possibly save the economy.
Yup, nice, simple graphic --- the end result of supply-side looting and trickle-down. We have some distance to fall before we hit Mexico or Honduras, but thanks to the new hope-and-change charlatan, we're on our way to a perfectly rigged banana republic, plantation economy.
I think the shareholderz of each 50,000 head dairy herd are starving out the genetic lines of another 1000 small farmers. Same scenario in the craftsman and merchant lines.
America's economic problem continues because Barack Obama instructed Eric Holder not to prosecute any of the Wall Street Casino Banking criminals who finance his campaign and give him his orders.
Thus the system cannot clear and make way for legitimate business dealings and honest money as the corrupt actors are still clogging up the system (Gresham's dynamic).
Until the lawbreakers are thrown in prison, their assets seized and their victims compensated the economy will continue to shrink and die.
Gatekeepers like Reich who refuse to speak such truths must also be forced to the sidelines as they are helping to prolong the depression by intentionally misdirecting readers into believing partisanship is to blame.
http://flashcandidate.ning.com/
Professor Reich writes, "The President has already announced that this election is about America’s surge toward ever-greater inequality." I would add that President Barry and the rest of the lickspittles, who sold out their constituents to the corporations, are leading that surge.
More for the greedy-rich and less for everyone else.
"Romney and his ilk are doing wonderfully well".....................
And how about you Mr. Reich, how are you doing spewing the company line?
Never before in human history have so few taken so much from so many.
You should investigate the social structure of the Russian Empire before they freed the serfs in 1861-and there are other fine examples which are worse. But we're getting there.
If your cohorts would pay fair wages and benefits like they did before Regan, Clinton, Bushes, NAFTA & the WTO and the other union busters, we wouldn't be having this conversation. The political corporotocracy is depleting the middle class who spends the money. The wealthy sure as hell don't drive this economy. They will be the victims. Enjoy!
Obama, whose assets total only 10 million, is a humble man of the people doing his best to help us, eh, Dr Reich?
Economic issues are moot, the campaign will be about social problems, women's rights etc., not that women's issues aren't important, but the Dems can take strong positions on these issues without offending anyone but the fringe, the nut case right.
Robert Reich is, as usual, spot on! He does the inspire the hopeless CD Obama Bashers that haunt these threads.
No one needs to bash Obama, they can just discuss what he's done while in office. His history is a bash in itself.
The liberals are declaring all out war on the far left these days, aren't they? I think CD is posting a new Robert Reich or Robert Scheer article every 12 hours. Well, here we are, again, coming at you from the far left to put the big Roberts back in their place. We don't even have to read their articles. We know they are chock full of accurate information. But it is obsolete information, irrelevant. Because their philosophy has for a long time disproved itself. Everybody knows Clintok has entered the looney bin with his successor in the whitey house. Clintok still smiles and waves about his skulduggery, as if. It's so funny. Reich still thinks he can hammer his irrelevant garbage into our brains to displace the relevant truth. But the big news that Reich persistently avoids is that the people have found the better way, the far superior way, the ONLY way.
That is the PEOPLE's way.
The people ignore liberal elites and instead look within. And there they find the real treasure. Within, the people find the real truth. Because the people's hearts and souls DO NOT LIE to them. So simple! Reich can't handle it. He's running away from it. Reich is trying to shriek above the voice of our own hearts and souls. But all that comes out of his mouth are raspy little squeaks. The people's inner voice firmly announces that we will not be giving one iota of our time or energy up to the elite parasites. We can have it all, and we're keeping it all. We'll have PLENTY extra time/energy for stewarding the society, and managing the economy, without elite interference.
In fact we relish the opportunity to sculpt the people's policy further. There is no role for elites.
We're sculpting the people's policy and building the people's economy at the local level. The local economy, the face-to-face exchange, where trust lives. Even the liberals are climbing down from their urban klass tiers to join the human race, again. It has been very difficult for the urban liberals to give up the legacies of their parents, and rejoin humanity. But they are doing it, because they are listening to their own hearts and souls, rejecting their parents' demands. And Robert Reich's demands, and Clintok's demands, and all the rest. The people are going to achieve universal enlightenment, solidarity, equity and justice and there's nothing the elites can do. Reich's "jobz numbers" don't mean squat, and everybody knows it.
This is election year. Why or how could anyone other than those who like to use magical numbers believe these job numbers have any substance to them. Seems to me the race is more about keeping a republican out of office so the dims might just get lucky and can appoint another 'liberal' to the court to break up the decades old hold of the neoconservative hold on the scotus. Seems hard to think the republicans will not be voted out in near en mass numbers but hey, just keep thinking 2000 and 2004 and you will see the magic in those numbers and as for 2000, that should have put at that time those 5 neoconservative members in jail for their participation in election fraud. But you get no magic beans with a dysfunctional justice system and congress, just magic from the air that is even emptier than the air. Which also explains the 'why' in the M$M that we are told that the economy is coming back, on its magic carpet.
No real solutions to our societal ills will come from the spectrum of "acceptable" MSM economists such as Robert Reich, who survives by squirming at the edge of a failed Liberalism. He was Labor Secretary under Clinton, a post of little importance, when Robert Rubin et al were calling the shots (and probably still are).
I read Reich's columns whenever they appear on CD, and I have yet to see how he provides any real solutions to what ails. His only value to me is as a statistical aggregator who because he is an academic may be considered of some referential value, however flawed.
Generally I'm with rtdrury and samosamo. The Magic Carpet Ride is OVER and OUT. All Ponzi schemes are ultimately doomed when they run out of suckers, as they must. The illusion of Growth and Progress was possible only so long as the externalities of environmental and social destruction and decimation were made invisible, which is no longer possible. Rachel Carson was a far more prescient "economist." We have literally poisoned the well. The Old Order is rapidly changing. Economic Growth is now seen as intrinsically insane. We will soon be cannibalizing our landfills while we are already bulldozing Detroit's vacant housing. We must redefine the word "job." We must redefine "work." We must learn to recognize intrinsic value, and reject the confabulations of self-serving academic bullshit artists who would better serve humanity by picking tomatoes (at squat wages, sans "benefits").
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I appreciate professor Richards Wolfs ideas of economic solution and change far better that Mr. Reich...
Ownership of enterprise by the workers and Democracy in the work place is the answer here. Capitalism as we know it-Out the door!!!
Wall Street is the real problem. Scoundrels that handle money and produce nothing make up nearly 1/3 of our work force payout. What A sham, A bunch of non productive overpaid bean counters at best. There is no reason what so ever that A banker or stock market analyst should make more than an engineer, technician, Nurse, Doctor etc. They produce NOTHING!!! All they really do is shuffle money about and speculate, like some big never ending monopoly game that the rest of us can't participate in.
This country needs infrastructure replacement/repair, new green energy jobs and more doctors and nurses for the free health care that every human being deserves...No more subsidizing big oil and big Ag. Put the American farmer back to work and use the subsidies for our schools and teachers...Break up these big banks, before they screw us again-WE DONT NEED THEM!!! And lets start taxing the rich, like right now, why should they not pay their fair share??? (Many of them want to be taxed more anyhow}
Robert Reich is from an administration that brought us NAFTA and ended Glass/Steagall..What more needs to be said about this guy who is so obviously part of the problem and not the solution..I wish CD would drop him off some where else to plug for Obama...
I fail to see the usefulness of this article. Could someone please tell me what they learned, or what insight or inspiration they gained from this piece? I'm making a serious query. Please ..... anybody, take a stab at it.
The usefulness of CD posting the article, and others like it, is that in at least one forum, people are able to critique Reich's propanganda and share that dialogue with others so the Reichs of the world do not go unchallenged. In addition, reading other blogger comments and writing our own sharpens our own knowledge of subjects as we learn from others and are often required to defend our own positions.
Well, thanks for the effort. I don't think Reich said anything worthwhile in this article to give the time of day to. Nothing he said was "really" bad or controversial, and he does not carry a ton of influence anyway. Anything worth critiquing of his on this forum has been done a thousand times. IMO, CD should be much more circumspect in what they post of Reich at this point. Most of the readers and posters on here are repeat readers, and have been there and done that. New readers won't be missing out on much if Reich gets posted much less often.
Former Labor Secretary Robert Reich should know better than to quote these bogus government-reported "unemployment rates", which are far below the actual numbers. See Shadow Government Statistics for much more realistic numbers.
Besides, even using the real unemployment rate is much less relevant than the statistics on percentage of population employed and median earnings. Both of these latter numbers continue to decline at alarming rates, showing that we are headed for a "Greater Depression", perhaps the greatest of all.
"fewer people were searching for jobs "
how do they determine how many unemployed have stopped searching for jobs
A monthly survey by the BLS called the "Current Population Survey." They survey ~60,000 households each month; about 10 times the sample rate of the average political opinion poll. They ask direct questions, like:
Are you employed?
If not... Are you looking for a job?
This is how they determine how many unemployed have stopped looking for jobs.
http://www.bls.gov/cps/cps_htgm.htm
They had a 50 year plan, the 50 years is up! And I don't thing they had a follow up plan? Doesn't look good!
They way it looks to me, they are just stitching it together as they go. That never fares well.
Sometimes I wonder, if they realized sometime ago that it was not sustainable and would eventually collapse.. That the bail out situation was a way to transfer huge amounts of wealth to the top, so that they could weather the storm without it affecting them.. Leaving the rest of us, without a lifesaver.
It was a hell of party while it lasted, but we have to go now. Oh, and we took the rest of the snacks too.
Oh, and also, I would rather see less of Reich and more of Professor Michael Hudson
here on CD.
I think what Hudson has to say would go alot further in explaining to people exactly what as gone on and is going on.
CD
It's the lesser of two evils meme.