With the second half U.S. economy results already expected to drop below the annualized projected 2.5% first half, unemployment for full-time workers is slated to increase no matter how cleverly the government spinmeisters try to twist ongoing statistics.
With news of job competition reaching post-recession lows (3.05 openings per job application) in March, as compared to double that when the recession was in full blast at the end of 2009,) some media optimists believe that the solution to the ongoing unemployment virus may be at hand. The numbers game played by self-styled employment analysts is beginning to look increasingly like sleight of hand. In the good old days of the last century, even professional investment analysts were satisfied as to what came out of the Department of Labor, which now seems to ignore that an increasing number of workers are opting out of the jobs market in ever increasing numbers.
With 10,000 personnel reaching the traditional retirement age of 65 every day, honored by most union contracts and Social Security, this has made it convenient for government statisticians to lower the denominator of their equation. With such amenities as indefinite unemployment compensation, Social Security medical disability supplements, food stamps and debit cards, additional deserters of the labor market are finding U.S. government emoluments more beneficial than the low-paying jobs available. When confronting the growth of structural unemployment, the replacement of people with technology on both the shop floor and the back office, it becomes readily apparent that job opportunities will be harder to come by as the year wears on.
The generally free ride that the first half economy is benefitting by the continuing resolution entered into by the President and Congress, ignores the ever-darkening clouds of fiscal irresponsibility. Although it has ostensibly deferred the showdown with the mounting debt and runaway deficits, most independent businesses have used this calm period to solidify their status within their operational sectors. They are also indulging in maintenance and repair, using their accumulated liquidity for that purpose.
The White House/Congressional sequestration, as disjointed as it may be, has resulted in selected cutbacks in private, as well as government jobs. These will carry over to the second half, further reducing employment opportunities. The debt/deficit confrontation, coming at the end of the third quarter, is expected to instigate further employment reductions. Although the exact amount cannot be predetermined, it’s only the numbers, not the fact of its happening that is yet to be learned.
There is nothing on the employment horizon, emanating from such sectors as manufacturing, construction, exporting or consumerism that would indicate an employment bounce-back, unless the environment-sensitive, but energy-potential production states of California, New York and Illinois open up their vast coal, oil and natural gas reserves.
Unless the EPA loosens its grip, the second half 2013 may be lucky to maintain the traditional unemployment rate at 7.5%. This will also translate into a record low labor force participation rate, bumping along at the low 60% level. Be that as it may, continuing unemployment will haunt the economy until overall business-friendly policies and resultant consumer demand reappear in the nation’s leadership management.
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