Today the latest figures of unemployment were released, and folks things are continuing to not look good.
Payrolls across the economy has dropped this month...again! Officially, the unemployment rate now stands at 6.1%. Consensus was the rate would be within 5.6-5.8%, north of the previous month's 5.5%. What we got was far above that.
The nitty gritty part is that we lost another 84,000 jobs for August. I say another, because the previous month the US economy jettisoned 51,000 jobs in July and 100,000 jobs in June. From manufacturing to the services sector, saw major losses. I don't have the exact figure before my, but CNN is right now saying that for the year we have lost 600,000 jobs! That, my friend is the Bush-McCain/Palin economy for you!
Looking at the chart above, one can see that we reached a "bottom" in unemployment last September. But, progressing month after month, we've been seeing gains of about 5-10%. At the rate this is going, one could expect Unemployment to be at around 7-8% by this time next year. Pretty scary, but as you can see at the chart below we've been in this area before.
( Data courtesy of Economy.com's Free Lunch site)
President Bill Clinton inherited the first Bush presidency's high unemployment. In 1992, the then-official unemployment rate was at almost 8%! But, as you can see, the nature of unemployment between the Clinton 90s and Bush Jr.'s time are almost mirror images. Under Clinton, that 8% figure was the the peak of unemployment. For the rest of the decade, unemployment looked like a very steep ski slope. Yet, under 'W', we got an upwardly trending roller-coaster looking chart!
Amazingly enough, we've been at this number under Bush's first illegally-gotten term. Things were looking good, but the growth in the economy was also corresponding to the last phase of the housing boom. The rest, my friends is history. Conservatives are claiming that the current rate ain't that bad, that we had this before. Not that bad, eh?
The last chart is from one of my favorite sites, Shadow Government Statistics. Here you see three graphs, the blue one is the unemployment rate as was originally configured. The gray is the rate reconfigured by the Clinton Administration. The last is the official one. One would think that the new configurations would reflect some structural change in the economy, but instead, by their own admission, the motives were simply political. The government has always tried to make these numbers looks good, and we as citizens lose out. We have a right to know what the hell is really going on in the economy. You politicians may want to make things look good, but you can't hide reality to the average person!
If we look at Shadow Stat's charts, we could see the same trends we saw in the other multi-year chart. The 1990s saw drops in unemployment, while this decade say an upward trend. The government shows unemployment at above 6%, yet looking at the Clinton-era formula, unemployment would have shown unemployment north of 10%. And under the older version, we would be showing a figure close to 15%!
The US economy, despite what the "Kudlowites" will tell you, our economy isn't a supply-side one but demand-driven. As workers see more and more folks losing their jobs, they begin to hold back first on things they really don't need, then cutbacks on stuff they do. You'll say to yourself "I don't really need that DVD," then as things get worse you may say "well, instead of getting milk and eggs and bread today, I'll just get eggs and milk, then next time bread." Well ok, maybe not like that, but I think you get the idea. Now the folks who sell you those goods will be affected by the decrease in sales and thus the cycle continues.
Folks are losing benefits left and right, and costs of living are increasing. Oh sure, the price at the pump may have dropped, but food is still high. Plus the cost of rent and insurance premiums are reaching beyond people's ability to pay.
So sure, while you hear Sarah Palin or John McCain remind you that she was ran a town smaller than most universities and that he was a prisoner of war. But we need to remind them that it's our experiences with our pocket book that we care about now.