HIRING IS UP - BUT ONLY TEMPORARILY
June 8, 2010
Need a job? Well, so do 14 and-a-half million other people who are still looking for one that will keep a roof over their heads and put food in their stomachs.
The Bureau of Labor Statistics released its monthly jobs report on June 4, showing what the liberal media was only happy to pass on. "There are jobs out there." They pointed that out that the private sector ONLY hired 41,000 new employees during the previous week. But here is what you didn't hear. Those jobs were overshadowed by the enormous number of temporary census jobs in the May data.
According to the report from the BLS, “employment grew by 431,000 in May, reflecting the hiring of 411,000 temporary employees to work on Census 2010.” Those Census jobs made up 95 percent of the total payroll employment growth.
Even then, the hiring fell short of expectations. Associated Press said that economists forecasted 513,000 jobs for the month and called it a “disappointing” report. The Associated Press noted that hiring by private employers was particularly weak, which is raising concerns that the economy recovery remains slow."
Other news outlets hyped the report including CNN. On its website, CNN emphasized that the “flood of temporary Census workers in May led to the biggest jump in jobs in ten years.” A similar headline appeared on the crawler at the bottom of CNN the morning the jobs report was released.
New York Daily News, ABC News.com and others also emphasized the “fastest pace” of job creation in 10 years in their reports. Well, duh! That same thing happened ten years ago when the unemployment rate was only 4.1 percent and it will happen again in 2020 no matter where the rate stands.
On June 3, investing website Motley Fool advised people to ignore the jobs report that was supposed to show the largest jump in more than 10 years. "Ignore it. The overwhelming majority of these job gains are temporary hires from the Census Bureau’s decennial census report and almost all of them will reverse within the next three months." Motley Fool explained that the numbers would not be normalized and therefore irrelevant when judging where the economy is truly heading.
On June 2, President Obama claimed the U.S. economy was “moving in the right direction,” and that “we expect to see strong job growth in Friday’s report.” Vice President Biden predicted 100,000 to 200,000 jobs per month through 2010, during an interview with Charlie Rose June 2. Even if that happens, the president would fall 5.2 million short of fulfilling his jobs pledge about economic stimulus.
Stock market futures dropped in response to the jobs report.
Peter Cardillo, chief market economist at Avalon Partners, told the Wall Street Journal that given these disappointing numbers, it does look like we're headed for a re-test of the lows from last week when the Dow posted its first close below 10,000 since February. Cardillo said "the trend in private-sector jobs is still moving in the right direction here, but the pace is really anemic. Of course, that means people have to take another look at their profit forecasts and everything else.'
By adding just 20,000 total permanent jobs, the economy actually lost ground since most economists say it takes at least 100,000 jobs each month to keep up with population growth.
If my math is correct, by removing the temp jobs created by the census that would bring our unemployment rate back over double digits. Did our President say that by the beginning of the summer of 2010, unemployment would not be more than 7.5 percent? Oh how soon we forget - thanks to the media.
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