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By MORTIMER ZUCKERMAN

The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.
The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.
Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:
David Klein


- June's total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.
- More companies are asking employees to take unpaid leave. These people don't count on the unemployment roll.
- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.
- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.
- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That's 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).
- The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.
- The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.
- The goods producing sector is losing the most jobs -- 223,000 in the last report alone.
- The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.
Job losses may last well into 2010 to hit an unemployment peak close to 11%. That unemployment rate may be sustained for an extended period.
Can we find comfort in the fact that employment has long been considered a lagging indicator? It is conventionally seen as having limited predictive power since employment reflects decisions taken earlier in the business cycle. But today is different. Unemployment has doubled to 9.5% from 4.8% in only 16 months, a rate so fast it may influence future economic behavior and outlook.
How could this happen when Washington has thrown trillions of dollars into the pot, including the famous $787 billion in stimulus spending that was supposed to yield $1.50 in growth for every dollar spent? For a start, too much of the money went to transfer payments such as Medicaid, jobless benefits and the like that do nothing for jobs and growth. The spending that creates new jobs is new spending, particularly on infrastructure. It amounts to less than 10% of the stimulus package today.
About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won't lead the economy out of the doldrums quickly enough.
It may have made him unpopular in parts of the Obama administration, but Vice President Joe Biden was right when he said a week ago that the administration misread how bad the economy was and how effective the stimulus would be. It was supposed to be about jobs but it wasn't. The Recovery Act was a single piece of legislation but it included thousands of funding schemes for tens of thousands of projects, and those programs are stuck in the bureaucracy as the government releases the funds with typical inefficiency.
Another $150 billion, which was allocated to state coffers to continue programs like Medicaid, did not add new jobs; hundreds of billions were set aside for tax cuts and for new benefits for the poor and the unemployed, and they did not add new jobs. Now state budgets are drowning in red ink as jobless claims and Medicaid bills climb.
Next year state budgets will have depleted their initial rescue dollars. Absent another rescue plan, they will have no choice but to slash spending, raise taxes, or both. State and local governments, representing about 15% of the economy, are beginning the worst contraction in postwar history amid a deficit of $166 billion for fiscal 2010, according to the Center on Budget and Policy Priorities, and a gap of $350 billion in fiscal 2011.
Households overburdened with historic levels of debt will also be saving more. The savings rate has already jumped to almost 7% of after-tax income from 0% in 2007, and it is still going up. Every dollar of saving comes out of consumption. Since consumer spending is the economy's main driver, we are going to have a weak consumer sector and many businesses simply won't have the means or the need to hire employees. After the 1990-91 recessions, consumers went out and bought houses, cars and other expensive goods. This time, the combination of a weak job picture and a severe credit crunch means that people won't be able to get the financing for big expenditures, and those who can borrow will be reluctant to do so. The paycheck has returned as the primary source of spending.
This process is nowhere near complete and, until it is, the economy will barely grow if it does at all, and it may well oscillate between sluggish growth and modest decline for the next several years until the rebalancing of excessive debt has been completed. Until then, the economy will be deprived of adequate profits and cash flow, and businesses will not start to hire nor race to make capital expenditures when they have vast idle capacity.
No wonder poll after poll shows a steady erosion of confidence in the stimulus. So what kind of second-act stimulus should we look for? Something that might have a real multiplier effect, not a congressional wish list of pet programs. It is critical that the Obama administration not play politics with the issue. The time to get ready for a serious infrastructure program is now. It's a shame Washington didn't get it right the first time.
Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report.
 

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It is my understanding that only 15%-20% of the "stimulus" has been spent...the majority is targeted for Q3...
Thanks Shueman. I was wondering why I hadn't received my free shit yet. :))THumbsUp
 

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I'm still waiting for the check he promised everyone during his campaign. I need 1/2 a tank of boat gas.
 

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So that means we will be getting worse? It seems the more they spend the worse things get. I think this is because they spend it on the wrong things.
Spending money you don't have is like... well spending money you don't have. :D
 

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Consumer confidence is at an all-time low. Chances of this economy turning around this year are as good as expecting the Kenyan to admit spending is the wrong course of action and that he was wrong to attempt to stimulate the economy by doing it rather than stimulating business with tax cuts.

We're screwed but our children and grandchildren are slaughtered!
 

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Red Blooded American
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How can I be out of money when I still have checks????

:D
Checks? This clown just prints more money like he's playing monopoly with our children's future. Wait, that's exactly what's already happened. Even my grandkids know they can't buy an ice cream if they don't have the money. I wish he had even as much of a clue as they do!
 

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The sad part is doc they probably don't even print it. It's all EFT (electronic Fund transfer) cause Obama and Congress said it was ok.

I've said it before and I hate being a pessimist as it is not my nature. But I see zero encouraging signs of economic improvement. There are many unsettling similarities to the depression of the 1930's here. Skyrocketing unemployment, low consumer spending, and economic dive followed by the present little bounce. Possibly preceding the next phase. Keep in mind the great depression took a number of years to reach bottom interspersed with slight false recovery bounces. I hope we are not heading in this direction but I see nothing positive to indicate any short to medium economic improvement. This coupled with a government that wants to be all things to all people and get their hands in everyones business in a socialistic way. A lot of "economic experts" are preaching recovery is around the corner, blah blah blah... I say show me the money, show me any real change and not just media interview hype. Many of the same experts that predicted the situation we are presently in could and would never occur. Experts that said housing demand would never slow down and prices would never fall. I could go on and on but it just increases my blood pressure.

Business in my industry is as slow as I have ever seen it (actually slower). Most people I talk to in all industries are just happy with survival at the moment. Major and small businesses alike are failing daily in my industry and others. We can't get product in many cases because suppliers are not inventorying anything and factories are intermittently closing (working part time to survive). And these are large suppliers and factories (for our industry). Boat builders that used to build boats in the hundreds per year are not building boats number you can count on your fingers. Or less. Just some of many examples. I spoke with a gentleman recently in an unrelated industry that told me his business is 90% off.

Another round of foreclosures is on the short term horizon as more loans reset and unemployment continues to rise. Commercial vacancy is inching its way higher in LA County for the first time in a long time. A family across the street from me that just bought at the wrong time got evicted July 1. The house is empty with a notice posted on the door. A guy and wife and 4 daughters and a little dog. Their American dream, shattered. I did not know till I saw the house vacant. I think they moved out when I was in Burley Idaho. I'm sure he was too embarrassed to mention it to me. He was not able to find enough work to keep it all together. The city fined him $1800 for not having his front yard landscaped in a prescribed amount of time from his move-in just as icing on the cake. Give me a fockin break. It's a scenario being played out tens of thousands of times. These people I'm certain are not feeling the relief of the economic stimulus package just as I am not.

Where is your support for small business Mr. Federal Government of hope and change? The only change I see is the exasperation of a poor economic situation into one of catastrophic failure. Small business is the backbone of this country and it is being allowed to fail while the crooks and fat cat companies that got the government cheese carry on business as usual with the exception of not loaning the money out to those who need it.

As far as I'm concerned and I don't think I'm in the minority, the TARP and stimulus money was a waste and went to and is going to entirely the wrong areas and companies. Not only as waste but money the government didn't have to spend. And any government jobs created are temporary. How about doing something to bring a manufacturing base back to the US (like tax incentives and less regulation and red tape rather than creating more reasons for companies to go elsewhere).

How irresponsible can you get, being the supposed leader and example setter of the largest and arguably most powerful nation on earth and spending hundreds of billions of dollars you don't have. Just what does that say to our youth that in a few years will run things?

fock now I am all wound up again. :((((((
 

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Congratulations MTV crowd! You people put Obama in office. He's young, he's cool, he plays basketball, he's half black. He's more like you than that old guy (the war hero from a war that Obama voters have never heard of). Enjoy the next 3 1/2 years.
Hipsters-remember Jimmy Carter? Of course you don't. Too busy listening to MJ.

Palin/Prejean 2012
 

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Palin/Prejean 2012


hil:)hil:)hil:)hil:)hil:)

We certainly hope so. :D
 

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I hate to say it, but Hillary is smarter than this!!! I never thought I would see the day I wished she were in office. :mad:
BW I'm completely with you on this. She has more cajones than the chimp ever thought about.

She would at least put her foot down when it comes to foreign policy and show some nads instead of bowing down and licking the king's left hand.

Ken
 

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"On the road again..."
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HusseinO doesn't really care if the economy picks up or not. His concerns are to get his health care plan in place and to get Cap and Trade passed. These 2 pieces of bad legislation will allow his government to have almost complete control of business which is his intended goal. He has the banks and 40% of the auto industry in his backpocket through his rushed stimulous and bailout debacles and the 2 big programs will allow him to failrly well controll the energy sectors and small business.

Any other view of this man is just wishful thinking. He and his backers have a plan to turn us to Socialism and it is taking place before our very eyes.

He told us during the campaign that coal fire PP's were going to be obsoleted by him and C&P is taking care of that. He said he was not going to allow the economy to continue with high and low points and he's effectively doing that as we will see jobs and business building only government approved products and we'd best be happy with what we get, at what price the government manipulates, and we best be happy to have a job which will be payscale regulated by the government. The stock market will become just a flat line. Speculation is being killed and enterprenuerial efforts are going to be futile attempts to keep heads above water.

He will find ways to manipulate our pensions and retirement accounts to "equalize" everyone and we better be happy with it.

The country will contine to become more divided and an underground cash society will emerge causing a push towards an outright revoultion if this whole mess isn't stopped within 10-15 years. The Chairman's plans are to create govenment jobs and that means bureaucrats who like "hall moniter" will be watching any off therecoird dealings and turning in their own neighbors for bonus and rewards at work.

Anyone that doesn't see or belive this apparently missed the history of the USSR. It was quite evident why the average Russian citizen wasn't creaming in their jeans when O passed through last week, they already lived through the "hope and change" this frickin' idiot is trying to create.....Wake up America, 2010 is the beginning to pull us out of this freedom destroying fire.
 

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It is my understanding that only 15%-20% of the "stimulus" has been spent...the majority is targeted for Q3...
It more like 10% that has been spent.
They seem to be waiting until their campaigns start up so that they can say "see what I did". Meanwhile Millions of Americans suffer for their political benefit. All these politician (Dems & Repubs alike) are out for their own best interest not ours. The ends justifies the means. Unfortunately all of us get caught up in right vs. left instead of whose plan is better. While we're fighting among ourselves, they can take care of their buddies. I've heard so much about Cheney taking care of Haliburton and didn't like it one bit. I'm not a Cheney hater, just don't like misappropriation of funds. This latest group really concerns me. GE will be the biggest corporation once this congress gets through. They are involve in every one of the administrations checklists.

Fairness Doctrine - owners of MSNBC & NBC
Windpower - Largest American producer of wind turbines
Green Vehicles - Largest producer of the electric motors for hibrids
Electronic medical Record - Developer of Software and imaging
Finance - Receiver of TARP and a large financial company although not reported about

Oh one other thing - Jeff Imelt CEO of GE - one of Obama's biggest contributors and supporters.

All of these politicians are crooks. Rahm Emanual makes Karl Rove look like an amateur.
 
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