Unemployment Down to 10%-Should we pop the Champagne Now?

SIC SEMPER TYRANNIS

December 5,2009

Mark Matheny

The Obama administration seems to be excited about a .2% decrease in unemployment compared to last month's announcement of an unemployment rate at 10.2%, but should Americans be popping the champagne? We must remember that the Obama administration stated that unemployment would not go over 8% if congress would approve a $787 billion stimulus, and that we would soon see "recovery" on the horizon.

The Bureau of Labor statistics shows that the jobs that have come about are temporary jobs in help services and healthcare, while employment fell in construction, manufacturing, and information. The report also shows that among those umnemployed, the number of job losers and persons who completed temporary jobs fell by 463,000 in November. The number of those who have been unemployed for 27 weeks or more rose by 293,000 (to 5.9million.), therefore showing a 2.7 percentage point increase currently to 38.3%

The report further states that construction employment declined by 27,000 over the month, and manufacturing jobs fell by 41,000 as well and employment fell by 17,000 in the information industry. The excitement of the Obama administration was in the fact that there were jobs created, so they are ready to exploit this in the name of "recovery", however, according to the Bureau of Labor statistics, this was do to 'temporary' job creation in the help, healthcare and in retail trade,( department stores added 8,000 jobs over the month.)

I first want to say to all those who recieved jobs last month, "congratulations"!!- But is it really a sign of recovery when overall the job market is still in a downward trend? Think about it, this is right before Christmas and it would be natural to see a temporary increase in jobs- would it not?

As for retail, most of the news I've seen  show dissapointment in the expectations most retailers anticipated, or were hoping for since sales have not been that good this year. ( I am in management in a retail Super store, and sales have been suffering, which has caused labor to be cut drastically). And although employment rose by 86,000 in professional and business services, Temporary help services accounted for the majority of the increase.

While it is great that there is some temporary work in the market to give people jobs, that still leaves the fact that job recovery will be slow as many private sector businesses are "trimming the fat" where they can by laying off workers, or simply not hiring those who quit or are fired. Conserving spending is also a way that these companies are attempting to survive during the downturn in the economy.

We still have to anticipate possible increases in family expenditures should the Obama Healthcare bill and Cap & trade bills pass in the near future. We may yet see several retail businesses fold after the first of the year due to the fact that consumers are also conserving cash, and cutting back on luxury items and other expenditures. I believe that we should also remember the $21trillion already 'spent ' over the next decade by this administration as well as our shrinking GDP, and fiat monetary system that is in a virtual freefall, and not be so ready to pop the champagne-yet.

Mark Matheny