Okay, we've had a chance to celebrate our nation's independence and a chance to digest the jobs report released last Thursday to a light viewing audience on Wall Street and a small percentage of the general public. Now, we have a chance to delve into the data to find out why we should be relieved, concerned, and scared out of our wits.
The June jobs report had it all and while the media played the usual favorites, there were three serious messages: the good, the bad, and the ugly.
The Good
> 288,000 - Net Jobs
> 262,000 - Private sector
> 200,000+ Five consecutive months
Job creation has traction, and it could begin to feed on itself. Thus far, it has been easy to describe the recovery as "jobless," given the lackluster rebound in employment. Remember, it is all about elasticity driven by pent-up demand. There is a lot of talk about current economic policy working, but the fact of the matter is that this is still a lackluster recovery (underscored) and the first quarter GDP is down 2.9%. As for the future, it is a critical part of the virtuous cycle to get it moving, and there is momentum.
I am not sure if we can get 400,000 or 500,000 numbers like we've seen in the aftermath of past recessions (there were 1,115,000 in a single month under Reagan, and 600,000, were returning strikers; the number was huge: 4,097,000, generated over the next twelve months) because of policies, regulations and taxes.
The Bad
> Average Hourly Wages +$0.06 to $24.45
> Long -Term Unemployed -293,000 to 3,081,000
> Retail Jobs +40,000
> Food Services +33,000
One might wonder why a sharp decline in long-term unemployed is "bad" news. It is the total of 3,000,000 and the relationship with tepid wage growth that is worrisome. Minimum wage up six cents is just not enough to keep up with official inflation readings (government numbers), and it is certainly not enough to match record food and commodity prices. There is evidence that many longer-term unemployed are now willing to accept any job at just about any wage.
This is not about a higher minimum wage; this is about the fact that not enough higher-quality jobs are being created. There were 67,000 professional and business jobs created, but they were offset by giant increases in retail and food service jobs. Moreover, there were only 16,000 manufacturing jobs and only 6,000 construction jobs created.
The Ugly
> Not in Labor Force +111,000 to 92,120,000
> Participation Rate 62.8%
> Part-Time: Economic +275,000 to 7,544,000
> Part-Time: Non-Economic +840,000 to 19,880,000
Not only has the recovery been largely a jobless recovery, but also the exodus of people from the labor force which is something to behold. A record 92,120,000, not in the labor force is not about attrition, but something much deeper.
You have to go back to November 1977 to find the same rate, but even this figure is misleading. The percentage of the civilian population not in the labor force was the highest rate since the BLS began recording data in 1948. By the same token, part-time work for economic reasons is climbing this year, while part- time for non-economic reasons is soaring. It is not about women who work part- time; it is about policies that somehow lure people into not working or those who just work in a part-time capacity.
My biggest concern is young men who work just enough to stay in their parent's basement, but have cash for things like cigarettes or to hang out. In Japan, they are called "parasite singles," and while such a term is too politically incorrect to work in America, there are signs that the same trends are occurring here. There is a serious cultural issue going on with the number of people sitting out the so-called recovery or choosing to work part-time.
In the end, someone has to be paying the bills of those 92,120,000, not working and supplementing those who decide it's easier to put in a few hours rather than have a better quality of life.
Summation
The energy miracle is the unsung hero in the jobs recovery picture, coupled with resilient entrepreneurs and the American public. Interestingly, the uneven growth in jobs is also accompanied with a variety of unique facets.
States and Districts with the Highest Growth and Main Drivers
Feb 2010 - May 2014:
> North Dakota +31.5% Drill, baby, drill
> Texas +15.2 % Education, business and energy
> Washington, DC +12.1% Big government and higher American taxes
Washington, DC has not only benefited significantly from higher taxes, revenues from regulations and new laws, but it is one of the few places in the nation where incomes climbed on an inflation-adjusted basis and yet, DC does not even manufacture anything.
The jobs report is a start in the right direction. It is long overdue and unlikely to gain much more steam. This makes for a great backdrop for the stock market rally, but it is a pity since it has been proven over and over that the nation can do much better.
"The greatest deception men suffer is from their own opinions."
Leonardo da Vinci
In what may be the golden age of political hypocrisy, Tom Steyer has galloped to the head of the pack with his pledge of $100 million to attack republican candidates unwilling to drink from the goblet of the man-made global warming and the need for Americans to suffer huge economic consequences.
In a free country, people can do with their money as they please, but in this case, it's somewhat puzzling that using money to punish non-believers of the damages of fossil fuels comes from using fossil fuels. Not only has Tom Steyer made billions over the last couple of decades through coal investments around the world, but still has an economic interest in a new coal venture in Australia.
The Maules Creek Mine will begin churning out coal next year through 2045, each year it will see 30 million tons of carbon dioxide released into the atmosphere. It would seem to me that Mr. Steyer would, at the very least blush, at his double standard, and if he needs to assuage his soul, give money to poor people in places like Indonesia and India who were displaced by his previous coal mines.
Instead, the idea is to punish Americans with higher energy prices, crushing household budgets and making the nation less competitive. Or he could have taken a page from Exxon Mobile which released its CEO letter today.
Notable Achievements:
- Lowering pollution from operations
- 39% of management and professional hires in 2013 were women
- $1.0 billion spent through minority and women's business in us last year
- 2000 - 2013 13 million bed nets and 2 million antimalarial drug doses donated
Let's not forget that last year, Exxon Mobile added $209 billion to global economy and paid $91 billion in taxes and fees. Tom Steyer's attempt to buy influence is the kind of deception that makes everyone suffer.
Join the conversation as a VIP Member