Consumer Spending Rises
I see where consumer spending rose more than forecasted last month. Apparently those who still have jobs, or income, believe the recession is over and it’s time to spend again. It is likely that much of this enthusiasm is based on the results of the stock market—which shows a near total recovery.
The stock market certainly could have been a good indicator 50 years ago—when 95% of public stock was owned by individual stockholders. Sadly, today about 75% of the stock in public companies is held by large institutional investors. These are the people who play the stock market like “high-rollers” play in Vegas…they don’t invest according to what is; they invest according to what they “feel” might happen.
On the other hand, maybe they know something we lay people don’t…but I doubt that is of much comfort to the 30 million unemployed and underemployed in the U.S.
Maybe I’ll believe the recession is over when they start putting the bulk of the unemployed back to work—at jobs other than flipping burgers or taking the Census.
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Lies, Damned lies, and Statistics–Update!
Good news! Since I wrote about this subject last week, the November numbers have been released by the government, and they indicate we only lost 11,000 jobs in November, while the unemployment rate dropped from 10.2% to 10.0%. I also read that the folks in Congress and the Administration loudly cheered the good news all around.
WAIT JUST A MINUTE—if we increased the number of unemployed by 11,000, how could the unemployment rate go DOWN?
Very simple—statistical manipulation. The unemployment rate fell because of the way the government conducts surveys of households to determine who was looking for work during the 4 weeks prior to the survey. From their surveys, it was determined that the “labor force” fell by 100,000 jobs for the third straight month, and the “participation rate” (the portion of the population that is employed, or looking for work) fell to the lowest level since the recession began.
Consequently, we did not bring the unemployment rate down by having fewer people unemployed…we did it by having fewer people looking for work during the survey’s prior 4-week period. In other words, When fewer people look for work, that is fewer people counted as unemployed…so naturally the unemployment rate would drop.
This is one of the problems with using statistics instead of real numbers to present absolute conclusions. Statisticians try to make us think whatever they want us to think—it’s called: “Spin.” You get the picture.
All things considered, I will stand by the numbers I presented in my last post, and say that I believe the real rate of unemployment is very close to 30% when including the “involuntary part-time” unemployed.
Yup—lies, damned lies, and statistics.
Lies, Damned Lies, and Statistics
Mark Twain popularized the old saying “There are three kinds of lies: lies, damned lies, and statistics.” When Twain wrote these words in his autobiographical book, he must have had the government in mind, because the government is, by far, the master of statistical manipulation.
Everyone knows that the “official” unemployment rate is now at 10.2% of the work force, or about 15.7 million workers. But, what we are not being told is how many people are actually unemployed but not being counted as unemployed because of some strange government arbitrary reason. Let’s look at the government’s own survey numbers:
- Government reported unemployed persons—15.7 Million.
- Persons marginally attached to the labor force and who wanted to work, were available to work, and had looked for work during the prior 12 months—but had not looked for work in the 4 weeks preceding the government survey, and therefore not counted—2.4 Million.
- Persons marginally attached to the labor force, but had not looked for work during the 4 weeks preceding the government survey for personal reasons (family responsibilities, school, etc.) and therefore not counted—1.6 Million.
- Discouraged workers who are no longer looking for work, and therefore not counted, because they believe there are no jobs available for them—808,000.
- In addition, there are those termed “involuntary part-time workers,” which means that these people have been laid off and are unemployed, but take a menial temporary part-time job just to feed their families, and therefore are not counted—9.3 Million.
Since these are government numbers, they are suspect, but they are all we have, so let’s look at some totals. If we only add up all the unemployed numbers above, we find 20.5 Million people unemployed—not 15.7 Million. Then when we add in the “involuntary part timers,” we get 29.8 Million people basically “unemployed.” This is nearly double the “official” number published by the government. There are likely many more that have dropped so far below the government’s radar they no longer get surveyed.
Government press releases and media pundits tell us the recession is over and recovery is in progress—so, where are the jobs? Small business has always pulled our fat out of the fire in past recessions, but they cannot do it this time, because of restrictive lending practices by banks, repressive government regulations, and the threat of government imposed higher operating costs, e.g., healthcare and higher taxes.
If you’re a small-business owner, you just might want to jot a note to your Congressional delegation and tell them that.
Yup—lies, damned lies, and statistics!
Small Change for Small Business
What is in the Stimulus Package for small business?
“There’s very little, if any, money in the stimulus package for small business, and what is there is really sort of a trickle-down from the benefits that go to consumers…and it’s a slow trickle, perhaps one you won’t see until sometime in 2010, and small businesses need help now. Less than 1 percent of every stimulus dollar will go to small business, despite that operations with fewer than 100 workers created 94 percent of all net job growth in America over the last 20 years.”
–Michael Alter, President of SurePayroll
SurePayroll surveyed more than 200 small-business owners nationwide to find out how the government could help them the most. 44 percent said they need immediate access to capital more than anything else. 29 percent said money invested in innovation and product development would really boost small business.
There seems to be very little disagreement by anyone that small business will be in the lead of our economic recovery–by putting people back to work first. That is why it is incomprehensible that Congress provided such a little bit of stimulus to small business–especially when the feds are also forcing banks to withhold loans.
Giving tax breaks and small checks to unemployed people, or people who are afraid they may become unemployed, might be a welcome gesture, but I believe people want jobs and job assurance, more than they want tax cuts.
I have some choice words for Congress, but I had better not print them here!
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