July 2011 Employment Disappoints But Stops Chicken Little in His Tracks

The July unemployment report is yet another disappointment, with not enough jobs to keep up with population growth. The jobs situation has been dismal for 43 months or over three and a half years. Yet those thinking Economic Armageddon Redux was suddenly upon us, literally crashing the BLS server to get the news, were sorely mistaken.

Earlier we reviewed the July 2011 BLS employment ratios. While not the Armageddon Wall Street was expecting, it's clear the job crisis has not dissipated. Both June and May new jobs numbers were revised upward, but not enough.

The change in total nonfarm payroll employment for May was revised from +25,000 to +53,000, and the change for June was revised from +18,000 to +46,000.

Let's drill down deeper into the numbers to show just how badly America needs good jobs.

There are 13,931,000 people officially unemployed, and if one takes the alternative measure of unemployment, it's 24.7 million.

ADP Employment Report 114,000 Private Sector Jobs for July 2011

ADP, a private organization, released their private payrolls jobs report. This month ADP is reporting a gain of 114,000 private sector jobs in July 2011. June was revised down to 145,000, in stark contrast to the BLS reported 57,000 private sector jobs. Below are the reported private sector jobs from ADP.

Congratulations Boeing, Now Hire U.S. Workers

Boeing just won a hard fought $35 billion dollar Department of Defense contract.

In a surprise twist in a long-running saga, the Air Force on Thursday awarded a $35 billion contract for aerial fueling tankers to Boeing rather than to a European company that builds Airbus planes.

This was a huge deal in 2008, when the Pentagon choose EADS, for Airbus is not an American company, and most of the work, and thus jobs would be offshore. That's your taxpayer dollars going offshore, not hiring American workers, not circulating back through the U.S. economy.

Pentagon officials said decision was based solely on price. Boeing’s bid was more than 1 percent below that of its rival, the European Aeronautic Defense and Space Company, the officials said. If the bids had been within one percent, the Air Force would have weighed 92 additional requirements for the plane as a tiebreaker, and some of those were widely thought to favor the larger EADS plane.

This contract eventually will be worth $100 billion dollars and a huge number of good paying jobs, 50,000 directly and over 100,000, eventually, will be in the state of Washington.

ADP Employment Report for December 2010 - 297,000 private sector jobs gained

The ADP report for December 2010 it out and ADP is reporting a gain of 297,000 private sector jobs. This is the biggest service sector job gain, 270,000, in the history of the ADP report. The United States needs a good 175,000 jobs per month just to keep up with population growth and this is the first time we've seen any job growth like this for over 4 years, as reported by ADP.


A Decade of High Unemployment

If this isn't a definition of a Depression, I just don't know what is. Carmen Reinhart, University of Maryland Economist, is projecting a decade of high unemployment:

Ms. Reinhart’s paper drew upon research she conducted with the Harvard economist Kenneth S. Rogoff for their book “This Time Is Different: Eight Centuries of Financial Folly,” published last year by Princeton University Press. Her husband, Vincent R. Reinhart, a former director of monetary affairs at the Fed, was the co-author of the paper.

The Reinharts examined 15 severe financial crises since World War II as well as the worldwide economic contractions that followed the 1929 stock market crash, the 1973 oil shock and the 2007 implosion of the subprime mortgage market.

In the decade following the crises, growth rates were significantly lower and unemployment rates were significantly higher. Housing prices took years to recover, and it took about seven years on average for households and companies to reduce their debts and restore their balance sheets. In general, the crises were preceded by decade-long expansions of credit and borrowing, and were followed by lengthy periods of retrenchment that lasted nearly as long.

“Large destabilizing events, such as those analyzed here, evidently produce changes in the performance of key macroeconomic indicators over the longer term, well after the upheaval of the crisis is over,” Ms. Reinhart wrote.