Help me understand the rise in unemployment.

[Midnight Judges]

Stay away from food service. :2cents:

[Koolblue13]

Stay away from food service. :2cents:

You ain't kidding.

[LoveDaSkins172645]

George Bush and his white terrorists he wants to call the cabinet. The reason for this unemployment? Giving so many tax breaks to all the companies that they turn around and give our jobs away to say Bangalore India, 1 company famous for that is Thomson Financial. Or rather now Thomson Ruerters. They had a profit of over 5 billion and still sent jobs to India, I know because I was with that company for almost 10 years! I get a email basically saying screw you your job is going to India, so from a company POV why pay someone here 60 grand a year when you can pay some indian 15 grand? So that is mostly why the economy is so fricked up. Not to mention the oil, we have more oil in the gulf of mexico and alaska and you all tell me why we have to get so much oil from the rag heads?? Anyway let me stop before I really go off on this goverment and the ass backward policies they enforce!

[MDRedskinsFan]

Lots of people like to put blame on the current Administration, Congress, etc. Fact is, no government official is ever responsible for the economy doing well or bad. Whoever mentioned the business cycle hit the nail on the head. The general, unknowing public, think that the economy is able to be 100% robust and we can avoid all rough spots and be perfect. Hundreds of years ago they came out with the market and trends, and there are cycles of peaks and troughs. Right now we're in a trough. Sad thing, is we made that mistake in the late 1990's, dubbing it "The New Economy" because we went so long without a hitch. That's bad news when that happens, because what goes up, must come down, and it did in late 2000 and early 2001. What's happening, is skilled workers have been knocked out of their jobs and are taking unskilled labor, thus keeping unskilled workers out of the work force. When the economy rebounds, those workers will find skilled work and the unskilled jobs will once again be available. We shouldn't be shooting for perfection, we should just be shooting for steady economic growth. That is why the Federal Reserve is there to monitor the trends, and expand or contract the money supply accordingly through interest rates. Another thing, full employment is considered to be at an unemployment rate of about 3-4%. So FULL employment is technically not possible.

[MDRedskinsFan]

George Bush and his white terrorists he wants to call the cabinet. The reason for this unemployment? Giving so many tax breaks to all the companies that they turn around and give our jobs away to say Bangalore India, 1 company famous for that is Thomson Financial. Or rather now Thomson Ruerters. They had a profit of over 5 billion and still sent jobs to India, I know because I was with that company for almost 10 years! I get a email basically saying screw you your job is going to India, so from a company POV why pay someone here 60 grand a year when you can pay some indian 15 grand? So that is mostly why the economy is so fricked up. Not to mention the oil, we have more oil in the gulf of mexico and alaska and you all tell me why we have to get so much oil from the rag heads?? Anyway let me stop before I really go off on this goverment and the ass backward policies they enforce!

I am sorry to hear about your loss. However, it isn't the government's job to manage the economy, the economy is self-correcting. A government-managed economy is socialism, something our country isn't and heading in that direction would go against the freedoms laid out in the Constitution.

I do support drilling for our own oil, in fact your hated Bush Administration is pushing for that, but the liberal environmentalists don't want to drill. Drilling creates jobs, and is good for the economy. What these Democrats won't tell you is that we won't be able to get the jobs over there back. We need new jobs for our country. As sad as it is, we live in a global economy, and jobs are bound to shift overseas, and just as that happens jobs will shift to the U.S. It's the cycle...

[JMS]

Thanks for the info.

Wow, I didnt know that many workers were layed off in the previous months. Interesting to see that our perception of the future economically, is what really is the root to the rise in umemployment( even though its a fact that the economy is ona down turn).

Thanks once again

Not exactly.. It's more like perception is an early indicator of reality. If 100 people are worried about loosing their jobs, it's likely some will.

Consumer confidence is a leading economic indicator. Meaning if you want to know what's going to happen few months from now, you look at consumer confidence indicators today. One metric for consumer confidence is determined by purchase of durable goods for instance. Refrigerators, washers, dryers and cars; anything that retains value for years after it's purchased. Measuring durable good sales when people are deciding to replace old items which likely are still working, measures their confidence in the economy and is a leading indicator for non durable goods. Basically, if you don't feel confident about your job and making your rent, you aren't likely to go out and buy a new car although you still might be buying other stuff like underware, groceries, etc.... If you ultimately do loose your job, then you won't be purchasing underware a month from now... So durable goods is a leading economic indicator for non durable goods, and both are indicators of consumer confidence.

It's not that consumer confidence dictates unemployment. Rather it's that the economy can be viewed as a group of individuals and their spending paterns. In an economy based mostly on consumer spending, looking at what individual consumers are doing and thinking is an early way to predict what the market will do, and then later what manufacteres will do, because their moves are dictated by the market.

Having said that, If the President or the chairman of the fed comes out tomorrow and says.... "I'm packing it up to iceland, We're all screwed"; that would have a negitive effect on consumer confidence in and of itself and likely cause consumers to rethink purchases; if they believed them.

Folks feel good about the economy and everybody buys new cars tomorrow, car manufactures willl add workers, production shifts, and increase output so they have enough weeks or months after that. If folks don't feel good about the economy and aren't buying new cars today, production will be cut down the road, leading to job losses; which can be predicted by peaks and valleys in consumer confidence today. Not that it's an exact science. It's not.

Anyway, Production is cut when demand is low because excess inventory is a bad thing. Inventory takes money to make, it looses value over time, and it costs money to store. To much excess inventory is also what creates and lengthens recessions. When widgets start selling again, the economic benifits lag as excess inventory is burned off. Why add workers when you have 100,000 widgets collecting dust on the back lot.

[ross3909]

Lots of people like to put blame on the current Administration, Congress, etc. Fact is, no government official is ever responsible for the economy doing well or bad. Whoever mentioned the business cycle hit the nail on the head. The general, unknowing public, think that the economy is able to be 100% robust and we can avoid all rough spots and be perfect. Hundreds of years ago they came out with the market and trends, and there are cycles of peaks and troughs. Right now we're in a trough. Sad thing, is we made that mistake in the late 1990's, dubbing it "The New Economy" because we went so long without a hitch. That's bad news when that happens, because what goes up, must come down, and it did in late 2000 and early 2001. What's happening, is skilled workers have been knocked out of their jobs and are taking unskilled labor, thus keeping unskilled workers out of the work force. When the economy rebounds, those workers will find skilled work and the unskilled jobs will once again be available. We shouldn't be shooting for perfection, we should just be shooting for steady economic growth. That is why the Federal Reserve is there to monitor the trends, and expand or contract the money supply accordingly through interest rates. Another thing, full employment is considered to be at an unemployment rate of about 3-4%. So FULL employment is technically not possible.

Global economy, we would be worse without it. Think of all the foreign plants in the US (BMW, Toyota, Honda, Nissan, to mention a few) that would close up and go away if we were not part of it. It stinks what happened to you, but maybe get some technical training and make yourself more irreplaceable. Bush and conservatives support drilling, Dems dont.

[JMS]

Global economy, we would be worse without it. Think of all the foreign plants in the US (BMW, Toyota, Honda, Nissan, to mention a few) that would close up and go away if we were not part of it. It stinks what happened to you, but maybe get some technical training and make yourself more irreplaceable. Bush and conservatives support drilling, Dems dont.

The foreign plants building automobiles in the United States build them for United States consumption. They are here because of protectionist trade treaties the United States resorted to in the mid 1990's after decades of unsucessful attempts to get Japan, Germany, and Korea.. ( especially Japan) to end the barriers to trade which they errected around their domestic markets. Therefore if we ejected foreigh automobile makers who assemble cars largely made from foreign parts tomorrow, we would have a net positive job effect on our marketplace.

The primary benifit of open one sided trade is consumer price point. It is not jobs.

No country on earth except the United States subscribes to one sided open trade (free trade). None allow massive trade deficites as we do. All of our trading partners pursue balanced trade policies as is demonstrated by their import track records..

[ClemsSC7Skinfan]

Government welfare is part to blame. We hired a guy from the unemployment office this past week, he was suppose to start on Thursday. However, he never showed and never has shown, or called in. So, anyhow we were told he had 1 kid, and a wife with twins on the way...neeeded to work. We tell him to come over and fill out the application, bam he comes and we hire him on the spot because we need workers. He is shocked somewhat but fills out all of his paperwork to start the next day (Thursday) and never shows. Blame welfare and the people's state of mind now a days for not wanting to work and take the easy way out. People need to stop blaming the government for their problems and get off their asses and do something about it.

[PresidentClinton07]

Thanks for the replies. Just got back from school so I couldnt post earlier. Very informative, keep it coming. With all the problems mentioned, what can be done to solve the issues?

Well what are you looking for? Just a part-time summer job? Have you finished HS yet?

Im in college, working on about 30 credits as we speak. I was just looking for a part time job, and after having some trouble, I started to wonder about the rise in unemployment.

I now work as a work study student on campus.

[Thiebear]

There are a TON of jobs in the DC area... government jobs galore..

monster.com etc...

[PresidentClinton07]

I keep seeing the term frictional unemployment come up. Are we going through frictonal or cyclical? Cyclical right?

[Sticksboi05]

Lots of people like to put blame on the current Administration, Congress, etc. Fact is, no government official is ever responsible for the economy doing well or bad. Whoever mentioned the business cycle hit the nail on the head. The general, unknowing public, think that the economy is able to be 100% robust and we can avoid all rough spots and be perfect. Hundreds of years ago they came out with the market and trends, and there are cycles of peaks and troughs. Right now we're in a trough. Sad thing, is we made that mistake in the late 1990's, dubbing it "The New Economy" because we went so long without a hitch. That's bad news when that happens, because what goes up, must come down, and it did in late 2000 and early 2001. What's happening, is skilled workers have been knocked out of their jobs and are taking unskilled labor, thus keeping unskilled workers out of the work force. When the economy rebounds, those workers will find skilled work and the unskilled jobs will once again be available. We shouldn't be shooting for perfection, we should just be shooting for steady economic growth. That is why the Federal Reserve is there to monitor the trends, and expand or contract the money supply accordingly through interest rates. Another thing, full employment is considered to be at an unemployment rate of about 3-4%. So FULL employment is technically not possible.

Well obviously full unemployment is impossible and is very bad. Full employment isn't 3-4% it's whenever everybody looking for a job has one so you'd never know even if you were at full employment. 3-5% is just where we aim for unemployment to be but I guess technically that could be full unemployment.

[wyominghansen]

I am sorry to hear about your loss. However, it isn't the government's job to manage the economy, the economy is self-correcting. A government-managed economy is socialism, something our country isn't and heading in that direction would go against the freedoms laid out in the Constitution.

I do support drilling for our own oil, in fact your hated Bush Administration is pushing for that, but the liberal environmentalists don't want to drill. Drilling creates jobs, and is good for the economy. What these Democrats won't tell you is that we won't be able to get the jobs over there back. We need new jobs for our country. As sad as it is, we live in a global economy, and jobs are bound to shift overseas, and just as that happens jobs will shift to the U.S. It's the cycle...

Thank you for beating me to the punch on this one, and I want to add our reluctance to build refineries. And didn't Bush want to drill in Alaska when he first took office? Lets hope that the Dems don't block drilling in N. Dakota (new found oil).

George Bush and his white terrorists he wants to call the cabinet. The reason for this unemployment? Giving so many tax breaks to all the companies that they turn around and give our jobs away to say Bangalore India, 1 company famous for that is Thomson Financial. Or rather now Thomson Ruerters. They had a profit of over 5 billion and still sent jobs to India, I know because I was with that company for almost 10 years! I get a email basically saying screw you your job is going to India, so from a company POV why pay someone here 60 grand a year when you can pay some indian 15 grand? So that is mostly why the economy is so fricked up. Not to mention the oil, we have more oil in the gulf of mexico and alaska and you all tell me why we have to get so much oil from the rag heads?? Anyway let me stop before I really go off on this goverment and the ass backward policies they enforce!

I might be wrong but was your job covered by a union? Because unions are the reason we are giving outrageous salaries to people and they keep wanting more.

Government welfare is part to blame. We hired a guy from the unemployment office this past week, he was suppose to start on Thursday. However, he never showed and never has shown, or called in. So, anyhow we were told he had 1 kid, and a wife with twins on the way...neeeded to work. We tell him to come over and fill out the application, bam he comes and we hire him on the spot because we need workers. He is shocked somewhat but fills out all of his paperwork to start the next day (Thursday) and never shows. Blame welfare and the people's state of mind now a days for not wanting to work and take the easy way out. People need to stop blaming the government for their problems and get off their asses and do something about it.

I agree and the poor work ethic is spreading. I think it also has to deal with the poor education of our children. I always liked the statement of teachers that "if we got paid more, we would teach better". What the hell does that mean, that they are puposely not teaching well because of their income?

[Koolblue13]

Thank you for beating me to the punch on this one, and I want to add our reluctance to build refineries. And didn't Bush want to drill in Alaska when he first took office? Lets hope that the Dems don't block drilling in N. Dakota (new found oil).

It's not the drilling, it's the refineries we need to build.

I might be wrong but was your job covered by a union? Because unions are the reason we are giving outrageous salaries to people and they keep wanting more.

Health care is a major reason unions suck so much money. The salaries are fairly competitive.

I agree and the poor work ethic is spreading. I think it also has to deal with the poor education of our children. I always liked the statement of teachers that "if we got paid more, we would teach better". What the hell does that mean, that they are puposely not teaching well because of their income?

Teachers should be paid better. The more competitive it is, the better teachers it will draw. They still have a sweet deal though.

[Koolblue13]

Also, anybody who says the government has no impact on our economy is kidding themselves. It has everything to do with it.

[MDRedskinsFan]

Global economy, we would be worse without it. Think of all the foreign plants in the US (BMW, Toyota, Honda, Nissan, to mention a few) that would close up and go away if we were not part of it. It stinks what happened to you, but maybe get some technical training and make yourself more irreplaceable. Bush and conservatives support drilling, Dems dont.

EDIT: Looks like you were just echoing my sentiments, my apologies!

[JohnLockesGhost]

Basically when people percieve an economic down turn and job insecurity, they stop spending as much. Consumer spending drives our economy. When it decreases, companies lay off workers ( 200,000 ) last month and 63,000 fewer jobs the month before that in feb. We need to add 100,000 jobs to the economy just to break even with new workers entering the job market.

Anyway why do people percieve an economic slowdown.

• Inflation ( high oil prices ).
  
• Credit crunch ( home loan crisis)
  
• massive record deficites.
  
• massive iraq war spending
  
• shakey dow jones.
  
• historically weak dollar.
  

It's annoyingly common to hear that consumption drives our economy. Consumption is the caboose of the economy not the engine. What moves the economy is deferred consumption, or savings. Savings leads to investment. Investment leads to capital formation. Capital formation leads to long term growth.

It's also annoying to hear so much weight put on people's perception of how things our going. Does this mean things will magically get better if we just believe? If we clap our hands and smile, the economy will turn around. Sounds like faith-based economics to me.

[ChocolateCitySkin]

Well I work in the intelligence community and there are a ton of jobs, we have far more people retiring than people coming into the field. It is just that hard to get people with clearences in. But if you do get in the pay is extreamly well.

The problem comes in where people with advanced degrees come in and think they should be promoted ahead of people who might not have a degree or only have a Bachlors. The thing is people with no degree or bachlors often have many many years of experience. I honestly think people need to go out and get some experience before they get their masters, it will help out so much in the end. There are still a lot of jobs out there, but like a previous poster said, its more of who you know than what you know.

No. That's not a problem. We should get paid more because we have student loans and other expenses. Getting a higher level degree should always be encouraged.

[JMS]

I keep seeing the term frictional unemployment come up. Are we going through frictonal or cyclical? Cyclical right?

Unemployment remains at historic lows. 5.1% in Mar 2008. If you consult an economics text book you will see that economists traditionally believe a 5.0% unemployment rate is actually ideal. When unemployment drops bellow 5% it's historically considered inflationary. Employers get in bidding wars in order to attract workers and then have to increase costs to pay for the increased wages.

Having said that Alan Greenspan kind of changed long standing beliefs about the economy. He reasoned in the late 1990's that innovations like the computer have so increased productivity, that it fundimentally changed the equation. He therefore allowed the economy to continue to surge as unemployment rates in the late 1990's and early 21st century hung closer to 4% than to 5%.

Even so in 2003, 2004, and 2005 unemployment Under Bush was closer to 6% than it is today.

The big problem with the economy today isn't a lack of jobs. It's that the jobs availible continue to drop in wages as we trade high paying manufacturing and engineering jobs for low paying service jobs. Jobs in fast food restaurants and others paying barely a liveable wage. That remains the legacy of the Bush Administration which for the first time since Hoover and the Great depression lost jobs over his first administration. And has added an enemic 2.6 million jobs from 1/2000 - 7/2006... compared with President Clinton who created 27 million new jobs over his 8 years in office.

[JMS]

It's annoyingly common to hear that consumption drives our economy. Consumption is the caboose of the economy not the engine. What moves the economy is deferred consumption, or savings. Savings leads to investment. Investment leads to capital formation. Capital formation leads to long term growth.

The problem with that statement is Americans save less than any other country in the industrial first world. Yet our economy is the largest and has traditionally been among the strongest most diversified.

It's also annoying to hear so much weight put on people's perception of how things our going. Does this mean things will magically get better if we just believe? If we clap our hands and smile, the economy will turn around. Sounds like faith-based economics to me.

It's not just what people think about the economy. It's what they think about their own financial situation, which one would expect them to be expert on. So "making them believe" isn't all that easy a proposition. It is true though on occasion positive and negative words from the fed or president have had positive and negative reactions in the stock market and consumer spending.

[Fergasun]

No. That's not a problem. We should get paid more because we have student loans and other expenses. Getting a higher level degree should always be encouraged.

Hah! Ridiculous... you deserve you are entitled to a higher wage because you paid more for your degree? I don't see why a higher level degree should always be encouraged. Plenty of things can be done without those degrees... what requires a masters degree and more school? Ok, medicine, and dentistry... but beyond that... plenty of people can do the job without that degree....

Sorry, I just can't believe people should get paid more because they invested mor in their education, in fact I think our education system is broken since it costs so much just to get a silly little piece of paper... and then when you do get it it's not worth as much as it cost...

[Springfield]

Wow, I forgot I was the first person to post after OP in this thread. I just opened it up and was like... "Oh yeah, George W. Bush!". But really, it's not his fault, he bears a very small (if any) amount of the blame on our economy and unemployment.

Here is my uneducated opinion...

There are many reasons for unemployment. In the private sector, it comes down to companies being able to offer jobs to potential employees and retain current employees. In short, if they don't have the money, they don't have the jobs. There are many aspects of our economy that directly affect the private sector.

The overuse (or abuse) of the credit system, for one, if the consumers don't have money to purchase goods and services the companies do not make as much money. When their earnings fall short the cannot hire potential employees and sometimes have to fire (lay off) current employees. This blame should be placed directly on the consumers shoulders although I think that credit card companies are allowed to charge insane amounts of intrest. Credit cards are like women, you can't do with them and you can't do without them.

The current housing industry affects the economy for the same reasons. People bought too much, too fast, for a price that was too high. Banks gave out terrible loans to people who didn't diserve them. The only thing that kind of bugs me is the fact that George W. Bush want this, insofar as everyone owning homes "living the American dream". Sure it was nice, untill it crashed, now look where we are at.

The dollar. Oh the dollar, another one you can't live without. It is low, and no matter how people try to spend it, it's not a good thing. Sure jobs may come in from overseas because it's less expensive for them. That is not an American company making money, that is a foreign company making money. When it comes to American company making money, it is harder in the global economy because all of these goods we buy from out of country end up costing us more. The dollar being "down" is a bad thing no matter how you try and cut it.

And now a personal anecdote...

My company, a auto-repair shop, has made less money this year when compaired to last year(so far). We are down about 20% I would assume. Other repair shops in the area (Northern VA) are much worse off, I cosider us lucky to have that amount of volume. That is not a good thing the way I see it, and it is a good indicator of the economy. If people don't have the money to have their second largest investment (behind their overpriced house of course) properly maintained and repaired how does this look on the rest of the economy? Not good if you ask me.

Lucky for me I haven't had "the honor" of "laying off" any employees.

EDITED: To make it easier for you folks to read.

[JohnLockesGhost]

The problem with that statement is Americans save less than any other country in the industrial first world. Yet our economy is the largest and has traditionally been among the strongest most diversified.

So you're arguing that Americans can continue not saving, run up debt (both personal and public) and expect to maintain the largest economy in the world? Interesting.

America built the largest, most diversified economy in the world before we became the largest debtor nation in the world. For about thirty years now we've been coasting on the confidence of the world in the dollar. We've been allowed to borrow our prosperity as long as the dollar was king. Well, don't look now, the king ain't feeling too hot.

It's not just what people think about the economy. It's what they think about their own financial situation, which one would expect them to be expert on. So "making them believe" isn't all that easy a proposition. It is true though on occasion positive and negative words from the fed or president have had positive and negative reactions in the stock market and consumer spending.

Are you arguing people should ignore their personal economic situations and just spend, spend and spend some more?