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Friday, October 02, 2009

Unemployment Continues To Rise - 9.8 Percent Now

The NYT reports:

The American economy lost 263,000 jobs in September — far more than expected — and the unemployment rate rose to 9.8 percent, the government reported on Friday, dimming prospects of any meaningful job growth by the end of the year.

Remember when we were told the $787 billion stimulus bill would "create jobs", as one of the reasons it just had to pass?

In two new documents -- Employment Numbers by State and Employment Numbers by Congressional District, -- the White House has attempted to predict exactly where the 3.5 million new jobs to be saved or created by the 2009 economic stimulus package will be located.

Critics knew better and warned the American public, but Obama and the Democratically controlled Senate and House, insisted on spending $787 billion, peppered with tons of earmarks and pork, of course, but where are the jobs that were promised?

The Heritage Foundation explains how the stimulus package is actually destroying, not creating jobs:

The Obama administration claimed that the government spending in the nearly $800 billion stimulus bill would “create or save” millions of jobs. And in one limited sense it will. The enormous increases in government spending will directly employ many workers. But that does not mean the stimulus will increase overall employment in the economy. Just the opposite in fact.

Academic research shows that increased government spending and government jobs crowd-out private sector employment. The government does not create wealth, it only moves resources around in the economy. Even now, with the economy in a recession, the money spent on government jobs is money that cannot be used by business to expand their own operations. Businesses are still investing, but at a lower rate than the recession began. The money the government spends on “stimulus projects” cannot be used by these same businesses to expand. So while government employment grows – private sector jobs shrink. Overall the jobs created by government spending are offset by losses in the private sector – and then some. One study of the Swedish economy found that for each government job created 1.15 private sector workers lost theirs. Government spending does not “create or save” jobs.

Worse, higher government spending discourages private sector investment. A larger and more expansive government – and the taxes needed to fund it – reduce profitable business opportunities and deter investors from putting their money to work in the economy.

Unemployment has primarily risen because of the reduced private sector investment and job creation since the recession started. The stimulus bill – and the taxes that will eventually need to be raised to pay for it –discourage investment and entrepreneurial job creation. No wonder that research shows that reducing government spending helps the economy while raising taxes harms it. Unemployment will probably remain unacceptably high for years to come – in part because of the misnamed stimulus bill.

From the United States Department of Labor News Release we see where the most jobs were lost:

The largest job losses were in construction, manufacturing, retail trade, and government.

More by the numbers from that same government release:

Unemployment rates for the major worker groups--adult men (10.3 percent), adult women (7.8 percent), teenagers (25.9 percent), whites (9.0 percent), blacks (15.4 percent), and Hispanics (12.7 percent)--showed little change in September. The unemployment rate for Asians was 7.4 percent, not seasonally adjusted. The rates for all major worker groups are much higher than at the start of the recession. (See tables A-1, A-2, and A-3.)

Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 603,000 to 10.4 million in September. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 450,000 to 5.4 million. In September, 35.6 percent of unemployed persons were job- less for 27 weeks or more. (See tables A-8 and A-9.)

The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007. (See table A-1.)

In September, the number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 9.2 million. The number of such workers rose sharply throughout most of the fall and winter but has been little changed since March. (See table A-5.)

About 2.2 million persons were marginally attached to the labor force in September, an increase of 615,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-13.)

Among the marginally attached, there were 706,000 discouraged workers in September, up by 239,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.5 million persons marginally attached to the labor force in September had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

The 9.8 is the national average, but some individual states are above that, those numbers cal also be found at the United States Department of Labor, here, right side of the page.

Those areas are listed below:

Alabama at 10.4 percent
California at 12.2 percent
D.C. at 11.1 percent
Florida at 10.7 percent
Georgia at 10.2 percent
Illinois at 10 percent
Indiana at 9.9 percent
Kentucky at 11.1 percent
Michigan at 15.2 percent
Nevada at 13.2 percent
North Carolina at 10.8 percent
Ohio at 10.8 percent
Oregon at 12.2 percent
Puerto Rico at 15.1 percent
Rhode Island at 12.8 percent
South Carolina at 11.5 percent
Tennessee at 10.8 percent

[Update] NewsBusters catches something in this report about the healthcare industry, one of the few industries, as is, that has added jobs.

Employment in health care continued to increase in September (19,000), with the largest gain occurring in ambulatory health care services (15,000). Health care has added 559,000 jobs since the beginning of the recession, although the average monthly job gain thus far in 2009 (22,000) is down from the average monthly gain during 2008 (30,000).

They end by asking one simple question:

How will the Obama-loving, healthcare reform pushing news media report this in the coming days as they continue to tell the country the stimulus is working AND one of the strongest industries in the country desperately needs fixing?

Good question and I wonder when the spin will start on how the continued rise, despite the $787 billion stimulus plan and the promises that went with it, is somehow "signs of change" for the better.