Economy crashes as 4,000 workers leave force
Who could have thought that the unemployment rate is at a steady 4.6% for the last three months – up from three months of 4.5% – and suddenly we find this out when 4,000 workers leave the workforce – and the news organizations panic. Like the Washington Post that bumps news aside to announce 4,000 job losses.
The unemployment rate remained unchanged, at 4.6 percent, as the loss of jobs was offset by people leaving the workforce.
Still, the fact that the economy actually lost employment was surprising news, even though other indicators have pointed to lower U.S. economic growth.
“We did not expect a report as awful as this,” said Ian Shepherdson, chief U.S. economist with the High Frequency Economics consulting firm.
Awful? When job growth has been as good as it’s been the last four years, ya’all hafta figure that the growth HAS to end – and you call yourself an economist?
By the way, when did the economy gain jobs? I don’t remember any Washington Post headlines in the middle of the day announcing that 4,000 jobs had ever been added. The last I heard about the economy was that it was the worst since Hoover.
And I guess losing 4000 jobs in an economy that employs 137.5 million people is a real blow, huh? Let me go sell off all of my stock and live in a shack in Montana until the Depression ends, f’Pete’s sake. Where were all of the show-stopping headlines when the Clinton economy was shedding 4,000 jobs every day?
Alan Greenspan probably explained what’s happening in the economy best, as reported by the Wall Street Journal’s Greg Ip;
Mr. Greenspan, Fed chairman from 1987 to 2005 and now a private consultant, said business expansions are driven by euphoria and contractions by fear. While economists tend to think the same factors drive expansions and contractions, “the expansion phase of the economy is quite different, and fear as a driver, which is going on today, is far more potent than euphoria.”
The euphoria in human nature takes over when the economy is expanding for several years, and leads to bubbles, “and these bubbles cannot be defused until the fever breaks,” he said.
It’s what I’ve been saying here in these pages – if you look around and everyone is investing in the same thing you’re investing in, get out now! Two years ago, everyone was buying houses, everyone was spending their money improving on their own houses. There was one month in 2005, more people applied for real estate licenses than drivers’ licenses in California – that should’ve set off bells. It was only a matter of time that the exhuberance became irrational.
Countrywide has let 13,000 of their people go in the last few weeks – it was only a matter of time before that started having an impact on the economy outside of the housing market.
Just remember that the stock market reacts to things that investors think will impact them in the future, if you make investment decisions based on today’s market, you’re working with the wrong information.
By the way, the economy isn’t crashing – I just said that because the Washington Post and the Associated Press are making such a big deal out of a market burp.
Based on recent legislation in Pennslyvania, those ‘lost’ 4,000 jobs will be picked when as Act 52 becomes enforced in PA. Within the next 5 years, every state will have passed similar legislation.
Anyone interested in Infection Control? NOW is the time to jump into the field.