The news was good for unemployment this morning with the rate at 8.8% and 216,000 jobs added in March, according to the Associated Press. Gallup says their data shows 10% for jobless and underemployment 19.3. Whichever is accurate, the trend still seems to be turning positive.
Nonetheless, I think there's much more to this than simply one or two statistics when it comes to whether or not the economy's actually improving that much. Because a major factor in the lower unemployment rate is all those who've stopped looking for work during the downturn. They're not counted as unemployed now, but will if they start looking for work again. Thus, the unemployment rate could go up even if the economy is adding jobs.
Then there are the local governments with budget shortfalls. They cut 15,000 workers last month and are expected to shed more. Beyond that, home prices are falling, sales are weak and foreclosures are reaching a record. Consequently, construction spending dropped to a 12-year low in February. Food and gas prices are higher which leaves consumers less disposable income to spend on other things.
Additionally, workers paychecks were flat in March, hourly earnings holding steady at $22.87, unchanged from February. And over the past 12 months, wages have lagged behind inflation because workers have little bargaining power in demanding big pay raises because the job market is still healing slowly.
So, when you add it all up, the government's going to promote the good news, avoid the hard questions and will likely go on doing business as usual frittering tax dollars away because pressure might be lessening somewhat. And when speaking to the public, they'll move the mirrors into different corners, dim the lights and tell their spokesman to "turn on the blue light, Cecil. The man wants a blue suit."
That's it for today folks.
Adios
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