Thursday, July 12th, 2012
For many months, if not years, we have been beating the drum on what we believe is the most hushed, but significant story in the metamorphosis of the US labor pool under the New Normal, one which has nothing to with quantity considerations, which can easily be fudged using seasonal and birth death adjustments, and other statistical “smoothing” but with quality of jobs: namely America’s transformation to a part-time worker society. Today, one of the very few economists we respect, David Rosenberg, pick up on this theme when he says in his daily letter that “the use of temps is outpacing outright new hirings by a 10-to-1 ratio.” And unlike in the old normal, or even as recently as 2011, temp hires are no longer a full-time gateway position: “Moreover, according to a Manpower survey, 30% of temporary staffing this year has led to permanent jobs, down from 45% in 2011…. In today’s world, the reliance on temp agencies is akin to “just in time” employment strategies.” Everyone’s skillset is now a la carte in the form of self-employed mini S-Corps, for reason that Charles Hugh Smith explained perfectly well in “Dear Person Seeking a Job: Why I Can’t Hire You.” Sadly, that statistic summarizes about everything there is to know about the three years of “recovery” since the recession “ended” some time in 2009.
From Gluskin Sheff
More on that Payroll Report
The more we sift through it, the more we didn’t like it. Even with the bump in June hours worked and average weekly earnings, the reality is that the Q2 results for both slowed markedly. The economy has hit stall speed yet again — the third time in the past three years.
On top of that, some other details in the data were disturbing. The ranks of the unemployed rose 29k on top of a 220k surge in May. Those who were unemployed and just completed temporary work soared 218k after a 137k increase in May to stand at the highest level since November 2010 (right when QE2 began!). The total pool of available labour jumped 258k to 19.3 million which means that there is now but one job opening for every six people out there who are either actively or passively looking for work. No wonder wage pressures are fading fast.
There are some pundits who believe that the +25k pickup in temp agency employment is a good sign since in the past this sector acted as a leading indicator for job creation… if only we can bring back those old days. In today’s world, the reliance on temp agencies is akin to “just in time” employment strategies — the use of temps is outpacing outright new hirings by a 10-to-1 ratio. The reality is that few businesses want to commit and this shows through in the Household Survey as well with part-time employment in an uptrend and full-time in a downtrend. Moreover, according to a Manpower survey, 30% of temporary staffing this year has led to permanent jobs, down from 45% in 2011.
As this all relates to the upcoming U.S. election, there are some more interesting tidbits to chew on. Looking at the social groupings in the data, we see that since President °barna moved into the White House in January 2009, the unemployment rate for African Americans has climbed to 14.4% from 12.7%, the unemployment rate for Hispanics has risen to 11% from 10%, the unemployment rate for women has risen to 8% from 7%, and the unemployment rate for youth (20 to 24 years old) has jumped from 12.4% to 13.7%. By and large, these were the segments of the popu}ation that helped President Obama win in that historic election in November 2008. The Reaganesque’ question that must be posed is: Are these folks better off than they were four years ago?
Tags: Average Weekly Earnings, Birth Death, David Rosenberg, Employment Strategies, Hugh Smith, Labor Pool, Manpower Survey, Metamorphosis, Payroll Report, Q2 Results, Seeking A Job, Sheff, Skillset, Stall Speed, Temp Agencies, Temporary Staffing, Temporary Work, Time Employment, Time Gateway, Time Worker
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Wednesday, December 14th, 2011
As we await the first Fed meeting in a while that no major policy easing or language change should occur, we bring one of FMMF’s favorite grumpy eccentric uncles – Howard Davidowitz. At this point, some of what he is saying is purely for entertainment purposes although there is some underlying reality in much of it. For those who don’t know, Davidowitz plys his trade as a retail analyst so maybe you will take more from the first video than the second, although both provide ear candy. ;) Warning – he is a tad partisan. :)
Howard Davidowitz: Consumers In TERRIBLE Shape and “It’s Going to Get Worse”
6 minute video – email readers will need to come to site to view
Weak data on November retail sales and an earnings miss from Best Buy on Tuesday poured ice-cold water on the whole “strong holiday shopping season” meme.All the upbeat commentary about Black Friday, Cyber Monday and the like was always specious, according to Howard Davidowitz, CEO of Davidowitz and Associates. Like Barry Ritholtz, Davidowitz says Black Friday data, particularly, can’t be trusted and is annually hyped by the retail industry to encourage consumers to get out and spend. In his own inimitable style, Davidowitz explains why the consumer is in “terrible shape” and why “it’s going to get worse,” citing the following:
- Crushing Debt Load: Consumer debt is 117% of disposable income.
- Help Not Wanted: Even November’s “strong” report included more people dropping out of the labor pool (315,000) vs. those who found work (278,000), according to the Labor Department’s household survey.
- Reverse Wealth Effect: Household net worth fell 4% in the third quarter, a drop of $2.4 trillion, according to the Fed. That’s the biggest drop since 2008 and would be hard to overcome even if wages were rising sharply, which they’re most certainly not.
- Housing Bust Rolls On: Residential housing remains depressed, which is putting tremendous pressure on Americans’ net worth and sense of financial confidence. Davidowitz, among others, sees more downside for housing prices and another increase in foreclosures in 2012.
Longtime viewers will note “it’s going to get worse” is a familiar refrain for Davidowitz, going back to at least 2009.
In the accompanying video, I asked what it would take for him to feel like things are getting better. As he’s wont to do with most subjects, Davidowitz answered that question with a stinging critique of President Obama. Barring a Supreme Court ruling that Obamacare is unconstitutional and/or victory in November by any “sensible” Republican — Davidowitz thinks both Mitt Romney and Newt Gingrich qualify – there isn’t much about 2012 he’s looking forward to, as you’ll see in the accompanying video.
Ok this one below might have some more of the ‘hyperbole’ angle to it ;)
HOWARD DAVIDOWITZ: Ben Bernanke Will Go Down In History As The Fed Chairman Who Destroyed The Country
4 minute video – email readers will need to come to site to view
Ben Bernanke, says Davidowitz, will forever be known as the Fed Chairman who destroyed the dollar, bailed out the banks, and perpetuated a monetary Ponzi scheme that will ultimately end in collapse.But wait. Didn’t Ben Bernanke save the country from a second Great Depression?
Absolutely not, says Davidowitz.Far from saving the country, Bernanke and his fellow White House confederates President Obama and Treasury Secretary Tim Geithner did everything they could to avoid fixing the problem. They bailed out the banks, and as a result, the banks have not been fixed. They pumped money into the economy and postponed the inevitable day of reckoning. They heaped additional regulation atop an already crushing regulatory burden. And in so doing, they helped ruin the country.THAT will be Bernanke’s legacy, insists Davidowitz. Not his creative use of a multiplicity of techniques to avoid bank failures and keep liquidity flowing through the American and European economies.
Bernanke’s mission in life, says Davidowitz, is to destroy the dollar. Eventually he will be successful. And this contribution to American history will never be forgotten.
Tags: Barry Ritholtz, Best Buy, Black Friday, Consumer Debt, Debt Load, Disposable Income, Ear Candy, Fed Meeting, First Fed, Holiday Shopping, Household Survey, Howard Davidowitz, Inimitable Style, Labor Department, Labor Pool, Language Change, Retail Analyst, Terrible Shape, Video Email, Wealth Effect
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Friday, March 5th, 2010
Mike Shedlock, of http://globaleconomicanalysis.blogspot.com, says The title of the article on Yahoo Finance: More Than Seven-in-Ten Workers Age 60+ Are Putting Off Retirement Due to Financial Restraints, According to a New CareerBuilder Survey is misleading.
The correct take-away is “Of those putting off retirement, 7.2 out of 10 do so for financial reasons”. Another key number is how many are putting off retirement. That the article does not say, but unprecedented debt levels are no doubt a big problem, with serious implications.
What Are The Implications?
This is proof of a statement I made years ago that boomers would be competing against their kids and grandkids for jobs at Walmart.
Other boomers in good paying jobs are reluctant to give them up.
- The labor pool participation rate will stay elevated instead of contracting as much as one might have thought. In turn …
- The unemployment rate will stay elevated longer than economists think.
- Kids out of college will have a harder time finding jobs.
- Kids out of college will be forced to move back in with their parents.
- Kids out of college will have no way of paying back college loans.
- Parents who co-signed for their kids education will come to regret it.
- The above factors will pressure discretionary spending of both boomers and those just out of college.
- Those out of college will postpone family building.
- Postponement of family building will further pressure housing prices.
- Bankruptcies, foreclosures, credit card defaults, and walk-aways will continue longer than economists think.
The deflationary pressures of the cycle described above are immense.
Mike “Mish” Shedlock
Tags: Boomers, Careerbuilder, College Loans, Credit Card Defaults, Debt Levels, Deflationary Pressures, Discretionary Spending, Financial Restraints, Finding Jobs, Good Paying Jobs, Grandkids, Harder Time, Key Number, Kids Education, Labor Pool, Mish Shedlock, Participation Rate, Postponement, Unemployment Rate, Walmart
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