America's economy a train wreck it's rice and beans from here out
Close to 3 million unemployed Americans will lose their unemployment benefits in April if congress doesn't extend benefits. The unemployment rate in Jan. was 9.7 percent, down.3 percent from Dec. But as of Jan. 6.3 million Americans have been unemployed for six months or longer, up 183,000 from Dec.
About 2.5 million of the unemployed were not counted in the Bureau of Labor Statistics (BLS) monthly unemployment report, because they had not searched for work within the four weeks preceding the monthly BLS unemployment survey. Those workers, for the most part, have simply given up any hope of finding work.
As it now stands according to the most recent BLS unemployment survey, 14.8 million American workers are unemployed. However the actual number is more in the 25 million range.
Since the Great Depression (which no economist to this day has been able to explain the cause of) the last time the U.S. unemployment numbers were this bad was during the Reagan years, in the 1980s. Indeed, the unemployment rate was actually higher under Reagan than it is now and at one point hovered around 10 percent for months.
But the economic picture was a lot different back then: In those days, many of the unemployed still retained equity in their homes, had retirement accounts to fall back on, and credit wasn't sapped as it is now. Today, many of the unemployed have seen their home's value plummet, their retirement portfolios decrease in value as much as 50 percent, have exhausted all their credit, and have seen their health care costs sky rocket. .
January's .3 percent drop in the unemployment rate from Dec. is by no means cause for celebration in view of the fact that in Jan., an additional 183,000 workers have been unemployed for 27 weeks or more.
The drop in January's unemployment rate to 9.7 percent from 10 percent in Dec. can be attributed in part to the addition of 52,000 temporary workers, 33,000 government workers (9,000 of which were hired for the Census), 15,000 health care workers, and 29,000 motor vehicle/parts and plastic and rubber workers. But during that same period, 75,000 construction workers (mainly in commercial construction), and 19,000 transportation and warehousing workers lost their jobs.
What these job numbers tell us in a nut shell is that there is very little demand for durable goods and commercial construction. It also tells us that people can't afford new vehicles and that they're buying parts in order to keep their older vehicles on the road.
Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.
Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.
Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.
Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.