Santa Needs Extended Benefits, Tooby Dollars and Sense
The October employment reports were released today, and the unemployment rate zoomed above 10%, to 10.2%, to be exact, earlier than most economists expected. The number of jobs lost in October also surprised on the negative side, at 190,000 (v. the projected 175,000). The unemployment rate is the highest it's been since the dreadful winter of 1982-83, when it hit 10.8% for two months running. The so-called "underemployment rate," which covers part-time workers looking for full-time work and suchlike, rose at an even higher clip, to 17.5% from 17.0%. The average workweek was unchanged at 33.0 hours, which matches readings in August and October for the lowest recording ever. Manufacturing production actually increased its average workweek length, to 40.0 hours (but lost net jobs for the month), but this is a small consolation given the heroic increases in GDP, and especially productivity, that have been reported in the past week. Oh, and lest we forget, the amout of workers unemployed more than 26 weeks rose to a stunning 3.6% of the entire workforce, which is the highest it's been since records began in 1948. All told, some 8.2 million jobs have been destroyed during this downturn--whatever name you want to give it--began some two years ago and change. It'll take 3 1/2 years of continuous, strong job growth to make that up, and that in an atmosphere starved of capital and averse to debt (unless you're the government or a big bank, and neither of them are going to be chalking up stellar jobs growth numbers anytime soon).
Some are arguing that the truly remarkable productivity statistics announced yesterday (an increase of over 9% annualized), most certainly presage an uptick in employment: you simply can't work the plebs much harder than this. But this comes off a series of strong performances for this year after which analysts said essentially the same thing. And there's still room to cut unit labor costs without cutting hours: by cutting or eliminating benefits. And there is anecdotal evidence to the effect that a good number of workers are actually accepting cuts in pay.
But it may not come to this: the vast inventory restocking that took place once the executive committee of the world bourgeoisie made it clear that governmets would guarantee all major financial institutions no matter what, may be overshooting future demand. You may be able to reestablish a global supply network in a relative jiffy, but recreating bloated living and investing standards may be a more arduous, or even impossible task. But stock markets, commodity markets and, strangely, bond markets (well, not so strangely: governments are buying heaps of their own bonds to keep interest rates down) are all way up since the near-death expereince of March. But one other employment indiccator shows how flimsy this tidal wave of risk-taking has been: holiday retail sales for October are languishing at last year's low levels, which were the lowest since, well, 1987: the month of the 1987 stock market crash. Santa's worried, too.
http://www.dollarsandsense.org/blog/2009/1...
