CNN reports that on Jobs: Worse than you think
NEW YORK (CNNMoney) — The U.S. labor force is shrinking, as more Americans are giving up hope.
Last month, only 58.1% of Americans age 16 and over were employed, a significant drop from before the recession and the lowest since 1983.
That’s especially worrisome to economists, who say a steady increase in those dropping out of the work force and not being counted in the unemployment rate is disguising just how bad the labor market really is.
“People are dropping out of labor force for all types of reasons,” said Robert Brusca of FAO Economics. “And it’s not a good trend. A good part of the wealth of a nation has to do with the proportion of population that works.”
The unemployment rate drop isn’t real, it reflects only those ‘actively seeking employment’, and not those who have just given up. It also doesn’t include the self-employed who have run out of work.
Austerity is not going to put people back to work, but no one in Washington understands that reality.
August 8, 2011 14 Comments
Israel finally joined the rest of the nations with a border on the Mediterranean in massive demonstrations. In addition to the common problem of high unemployment among young people, middle class people in Israel are finding it increasingly difficult to cover their monthly expenses with their current salaries.
The riots in and around London have spread to other cities, finally causing the mayor of London and the Prime Minister to end their vacations and return to deal with the situation. While the initial riot in Tottenham was tied to a police shooting of a local man, it has triggered the release of the pent up frustration of unemployed young people in cities all over. They have skipped the mass demonstrations and gone directly to the riot stage.
No doubt the government will appoint a commission to study the problem, while the communities continue to boil with frustration, and without hope of anything better.
There are a lot of American cities about one incident away from riots.
August 8, 2011 Comments Off on The Summer Of Our Discontent
[Updated for the market close]
Showing why they are ‘Masters of the Universe’, investors have reacted to the S&P downgrade last Friday by selling stocks and buying US Treasury bonds. As a result of S&P’s analysis of the US credit-worthiness, investors have decided to ‘punish’ the US by forcing the Treasury to pay lower interest rates on its bonds.
This isn’t from The Onion. The US cost of borrowing has gone down since the S&P downgrade.
NEW YORK (CNNMoney) — U.S. stocks plunged deep into the red on Monday as fearful investors faced the news that the United States had lost its coveted “AAA” credit rating.
All three major U.S. stock indexes were down between 4% and 5%, pushing the Dow below 11,000 for the first time since November.
The stock market has now lost 14% during the past two weeks.
The VIX (VIX) — Wall Street’s so-called “fear’ index — jumped 39% to 44.38, the highest level in more than a year.
With so much uncertainty, investors were leaving little to chance. Despite the downgrade of U.S. debt, Treasury prices rose, pushing yields lower, as investors fled into the relative safety of government-backed debt.
The yield on the benchmark 10-year U.S. Treasury fell to 2.44% from 2.56% late Friday.
“The Treasury market seems to be oblivious to the fact the U.S.’ credit rating was downgraded,” said Quincy Krosby, market strategist with Prudential Financial.
August 8, 2011 6 Comments