The headline job numbers showed what some are touting as proof the economy is on the path to recovery. The problem is the number was not nearly enough to lower the U-3 unemployment rate and the U-6 un/underemployment and discouraged workers ticked down from 17.1% to 17%. While this number is positive, the more you dig, the less optimistic one can be.
Unfortunately, America is predominately a consumer. The majority of our GDP is made up of consuming whereas China is building a producing nation. Obviously, producers need consumers to continue to sell to but, America is losing its producing jobs and we are simply not innovating enough either. Producing and innovation is what we need to focus on to truly strengthen our economy, in my opinion, not focusing on being a consumer. How much can we consume before we don’t have the wealth to continue to do so?
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The number of the long-term unemployed (which means 27 weeks or more) increased by 83,000 or 41.8% of the jobless. Those working part-time for economic reasons, (typically underemployed), decreased by 501,000 but, this followed two large increases in the previous months.
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There were total increases of 151,000 jobs, including 159,000 in the private sector. Overall, 874,000 jobs have been added since December 2009. Jobs created in October were seen in temporary help (34,900), health care (34,000), food service (24,000) and retail (27,900). Government lost 8,000 jobs. Mining added 8,000 jobs. Manufacturing was flat.
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The key here is manufacturing continues to be flat while service jobs increased for the holiday season. One must anticipate this will also be lost after the season. If we don’t ramp up manufacturing, we are simply just a consumer nation that, in my opinion, is unlikely to ever have a truly strong economy again. We must find ways to add manufacturing jobs and export these products to reduce our trade deficit, increase our GDP therefore strengthening our economy in the short and long-term.
As always, do your own homework to see if you agree. Have a good night and I’ll see you in the morning. Good luck out there.
Mike
No positions mentioned
Random News: Be prepared for some type of pullback into the November 11th G20 Summit on concerns of a currency war and disapproval of QE2.
