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Republicans against Financial Overhaul

BobG — Wed, 21 Jul 2010 16:10:00 +0000

July 21, 2010: The president signed the most sweeping overhaul of financial regulations since the Great Depression into law almost two years after the infamous near-financial meltdown in 2008 in the United States that rippled around the world.

It is officially known as the Restoring American Financial Stability Act of 2010.

Purpose and content

The purpose of the new law strives to protect both consumers and economic stability. It awards the government new powers to dissolve failing companies or break up companies that threaten the economy, creates a new agency to shield consumers, and focuses more light on the financial markets that previously escaped the oversight of regulators.

The president attempted to put the complex law in consumer-oriented terms for the average person. He said it would help root out fine print and hidden fees for people, and provide deeper analysis of the sophisticated financial transactions on Wall Street.

He claimed that this crippling recession was primarily caused by a breakdown in the financial system that cannot happen again.

There are many good provisions in the bill. The best characteristic of the bill is the provision to permit free markets to work and allow mismanaged financial firms to fail rather than require taxpayer bailouts adding to the federal deficit.

The law assembles a council of regulators to look out for risks across the finance system.

On the consumer level, borrowers will be protected from hidden fees and abusive terms, but must provide evidence that they can repay their loans. Retailers will have a choice of at least two networks on which to run debit cards, introducing competition where there was none. Retailers may also decline debit card use for small purchases where fees exceed profit.
On the banking level, a council of regulators will monitor bank solvency levels, make them increase their reserves when necessary and move the reserves into investments easily converted to cash. They will also identify failing financial institutions, dissolve them before they trigger a crisis, and spread the costs incurred across surviving peers.
On the government level, the Federal Reserve will be awarded new powers through a consumer protection bureau that will write new rules to protect consumers from unfair credit card and mortgage terms, but also live under expanded congressional oversight. The bureau will also establish procedures for liquidating giant financial firms where necessary, so there are no more “too big to fail” financial institutions.
The law restricts banks owning hedge funds (3% maximum of capital) from trading for themselves in their own accounts (which allows betting against themselves if more profitable). This has become known as the “Volker Rule” (proposed by former Federal Reserve Chairman Paul Volker.
Financial institutions must separate their commodity derivatives trades into a separately capitalized entity completely walled off from federally insured deposits. This will moderate the amount speculators profit when trading crude and heating oil contracts.
Other provisions include the Commodity Futures Trading Commission (CFTC) authority to regulate swaps, OTC, energy-related and electronically traded transactions by closing the so-called “Enron swaps” and “London” or “foreign-exchange” loopholes.

Many of the law’s features won’t be in effect until regulators write new rules and implement them.

Obama explained them all as common sense reforms that will help people in the financial aspects of their daily life, from being made aware of risks, to understanding fees and signing contracts. He called the reforms “the strongest consumer protections in history,” and said, “Because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”

“I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all,” Obama said to supporters. “Today, thanks to a lot of people in this room, those reforms will become the law of the land.”

Republicans against

The House first passed a bill in December 2009. After months of disagreement, the Senate passed a bill in May 2010 pretty much along party lines with only four Republicans joining to gain the required votes.

It took the whole month of June for the House and Senate to work out the differences. The conference committees voted strictly along party lines, 20-11 with House negotiators and 7-5 for Senate negotiators, .

The House passed the final bill on June 30, by a vote of 237-192, with all but three Republicans in opposition.

The Senate passed the bill on July 15, by a vote of 60-39 with all but three Republicans voting against the legislation.

One Democratic Senator, Russ Feingold (D-WI), opposed the measure, saying it did not go far enough.

In spite of some misgivings, Republican Senators Olympia Snowe (R-ME) and Scott Brown (R-MA) joined with Susan Collins (R-ME) as three crucial votes for passage.

“While not perfect, the legislation takes necessary steps to implement meaningful regulatory reforms, create strong consumer protections and restore confidence in the American financial system,” Senator Snowe said in a statement.

Republicans are attempting to capitalize on the wave of voter disillusion with current Members of Congress with regard to the slowness of recovery and the growing debt and deficit of the government. By voting against any issue that increases debt (and implied to raise taxes), Republicans are hoping to unseat their opponents.

A few of those issues are state education, unemployment benefits and health care.

Republicans against extending Unemployment benefits

BobG — Tue, 20 Jul 2010 02:57:06 +0000

Republicans are building a history of voting as a bloc against everything proposed by Democrats regardless of the benefits to Americans. They are apparently bent on destroying anything Democrats try to pass.

By admission and by action, Republicans are delaying any Congressional movement they can, because it means to some extent, destroying or eroding any accomplishments by Democrats. Republicans are heavily lobbied and their campaigns heavily supplied by big business interests, and that is whom they obey.

Republicans vote as they are told.

Congress’s approval rating is at a staggering low of 19% (July 16, 2010).

~~~~~

July 19, 2010: Lawmakers battled for weeks over extending unemployment benefits to workers who have been unemployed for more than six months. The previous extension expired on June 2, leaving about 2.5 million people without benefits.

The House had passed a bill extending their benefits through November 2010. However, with the recent death of Sen. Robert Byrd, Senate Democrats didn’t have the 60 votes they needed to overcome a Republican filibuster.

President Obama said lawmakers’ obligation to extend benefits is both moral and practical, citing some economists who believe extending unemployment insurance is one of the most cost-effective ways to jump-start the economy because it puts money in the pockets of people who are likely to spend it quickly.

The $34 billion needed to extend benefits would be borrowed, adding to the nation’s mounting debt. Republicans said they would only support extending benefits if the bill were paid for.

Republicans have tuned into the issue of voter’s concern over debt and deficit and are looking to gain favor with them in the upcoming election.

Republican leaders say they’re happy to vote, as long as they get a chance to change the bill to their liking.

This is an example of how Republicans are simply against anything proposed by Democrats. In issues past, Republicans have often said they would rather increase debt than taxes. With this issue, they are changing again, just to slow any Democratic progress.

~~~~~

July 22, 2010: Update.

President Obama signed into law today a restoration of benefits for people who have been out of work for 26 weeks or more after Congress approved the measure earlier in the day.

The lump-sum retroactive payments will be delivered in the next week or two to state-issued debit cards or beneficiary bank accounts.

The Senate approved the bill on July 21 after Democrats agreed to break off the unemployment benefits from a larger jobs bill targeting $24 billion to help state governments slow layoffs and cut taxes, and provide a health insurance subsidy for the unemployed.

After it became a standalone bill, the unemployment benefits enlisted support from Republican Maine moderates Susan Collins and Olympia Snowe. The 60^th vote was cast by Senator Robert Byrd’s replacement, Carte Goodwin (R-WV).

All Republican Senators except the two Maine moderates voted against the unemployment benefits again as a unified bloc.

Less than a day later, the unemployment benefits bill was sent to the House where it was passed 272-152 with the help of 31 Republicans crossing party lines and sent to the president for his signature.

Earlier this year, Republicans twice allowed temporary unemployment measures to pass without asking for a roll call vote, but debt and deficits are becoming issues with voters, and Republicans looking for reelection are looking to win favor with them.

After signing the bill into law, the president said in a statement, “Americans who are fighting to find a good job and support their families will finally get the support they need to get back on their feet during these tough economic times.”

IRS gets Audited

BobG — Sat, 10 Jul 2010 02:57:41 +0000

A recent report from the Government Accountability Office (GAO) to Douglas H. Shulman, Commissioner of the Internal Revenue Service (IRS) inspected the tax agency’s financial statements from the 2009 fiscal year with the exacting thoroughness of an IRS auditor, and found a few billion-dollar errors.

It should be noted that the GAO does this every year for the IRS, providing an outside set of eyes on the procedures in place and recommending improvements.

The IRS has in excess of 101,000 employees

Tax collections for fiscal year (FY) 2007 were $1.36 trillion from individuals and roughly $2.69 trillion in total, including employment and corporate taxes, estate, excise, and gift taxes. For Individual income tax, the top 5% of income earners pay $816 billion or roughly 60% of this amount.

According to the GAO report, the IRS made a assortment of accounting errors last year that “could adversely affect the reliability of its financial statements” and result in “duplicate or erroneous refunds.”

Among the mistakes were a “failure to record the receipt of a (single) taxpayer’s $3 million payment” and an $8 billion discrepancy between two separate accounting systems tracking how much money taxpayers owe. The audit also found a $5.1 billion “unexplained variance” between the amount the detailed tax files recorded and the total amount the agency took in last year.

This is similar to any large corporation that handles a large inventory. Supermarkets and other retail businesses are constantly reconciling their inventory. The “book” is the recording of transactions made. The “actual” is the actual count on hand.

Considering the size of the IRS, the errors are all relatively minor infractions.

The 41 recommendations given to the IRS addressed:

internal controls,
training and reviews of procedures processed by workers
supervisor reviews were focused more on timeliness of processing rather than the accuracy of applying payments.

The GAO sums up its assessment by referring to “long-standing material weakness in its internal control over unpaid assessment.”

There were no performance infractions except:

failure to redistribute unpaid tax liability to all responsible company officers when a tax payment had been made, and
reconciling inventory contents from Lockbox banks who forward unacceptable forms of payment such as traveler’s checks, gold coins, and other easily negotiable items of value. On several occasions there were discrepancies between the inventory recorded and the inventory received.

It is a good thing even the IRS has oversight control, so we can know our taxes are properly received. And, it gives a little satisfaction to the American taxpayer that the IRS shares the stress associated with an audit.

Economic Picture: June 2010

BobG — Sat, 03 Jul 2010 01:20:37 +0000

Report from the U.S. Department of Labor statistics:

Employment Situation:

Total nonfarm payroll employment declined by 125,000 workers in June, reflecting a decrease of 225,000 temporary employees in the Census 2010 segment as the project comes to an end.

Private sector employment changed little (+83,000).

The unemployment rate edged down to 9.5 percent.

Employment status:

The Civilian labor force represents employed and unemployed workers.

–Current: 153.7 million; one year ago: 154.7 million.
–Employed workers — current: 139.1 million; one year ago: 140.0 million.
–Unemployed workers — current: 14.6 million (9.5%); one year ago: 14.7 million (9.7%).

In between, the unemployment rate rose to 10% for the last three months of 2009.

There have been steady increases to the Civilian labor force since the start of 2010 (153.2 million).

Payroll employment decreased by 4.5 million jobs in 2009, wiping out all the jobs created in the private sector over the last decade.

Total unemployment peaked at 15.7 million (10.1%) in October 2009 rising from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009.

In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable.

The government goal of 8 percent unemployment would mean 12.4 million looking for jobs.

As consumer and business confidence improves, more workers start to look for jobs again, returning to the workforce in anticipation of better employment conditions, which drives the unemployment rate higher. On the other side, workers drop from the work force for a number of reasons including giving up looking for work.

In addition, 1.6 million college graduates joined the Civilian labor force, with last year’s graduates still scrambling to land jobs.

Household Survey Data

Nonfarm payroll employment decreased by 125,000 in June (reflecting a decrease of 225,000 temporary Census workers [net +83,000]) after a big increase in May (+433,000 [revised] including an increase of 411,000 temporary Census workers [net +22,000]), April (+313,000 [revised]) and March (+208,000 [revised]) and holding nearly level in February (+39,000 [revised]) and January (+14,000). This followed a big drop in December (-109,000), and a boost to prepare for the holiday season in November (+64,000) following a big drop in October (-224,000).

The quarterly average nonfarm payroll job data has been improving steadily over the last nine months with three-month averages at: April through June 2010 (+207,000), January through March 2010 (+87,000), and October through December 2009 (-89,667).

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was 8.6 million. These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs. Previous month part time figures have held relatively steady since March 2009 at 9 million.

The number of persons marginally attached to the labor force was 2.6 million. These are workers who wanted and were available for work, and had looked for work sometime in the last 12 months. They had not looked for work in the last 4 weeks and so were not considered part of the labor force.

Among the marginally attached workers, the number of discouraged workers was 1.2 million. These are persons no longer looking for work. The peak was 1.2 million, reached in February 2010.

The average duration of unemployment has risen to 35.2 weeks. A year ago it was 24.4 weeks. At the start of the recession the average length of unemployment was 16.5 weeks.

Long-term unemployed persons (jobless for 27 weeks and more) remained at 6.8 million. This is more than five times the number at the start of the recession in December 2007 (1.3 million). In 2009 alone, 3.5 million were added to that number. Four in ten (45.5%) unemployed persons are in this category.

Establishment Survey Data

Construction lost 22,000 jobs in June, nearly erasing last month’s gain. Previous month changes were May (+30,000), April (+22,000 [revised]), March (+26,000 [revised]), February (-64,000), January (-77,000), December (-32,000), November (-15,000) and October (-67,000).

The quarterly average construction job data has been improving with three-month averages at: April through June 2010 (+10,000), January through March 2010 (-38,333) and October through December 2009 (-38,000).

Currently, there are 5.6 million construction jobs. A year ago, there were 6.0 million. In December 2007, there were 7.39 million.

Manufacturing gained 9,000 jobs in June. Previous month changes were May (+32,000), April (+38,000), March (+17,000), February (+1,000), January (+20,000), December (-23,000), November (-25,000) and October (-57,000).

The quarterly average manufacturing job data has been improving steadily over the last nine months with three-month averages at: April through June 2010 (+26,333), January through March 2010 (+12,667) and October through December 2009 (-35,000).

Currently, there are 11.67 million manufacturing jobs. A year ago, there were 11.78 million. In December 2007, there were 13.73 million.

Retail trade lost 6,600 jobs in June. Previous month changes were May (-10,900), April (+14,400), March (+22,800), February (+7,100), January (+49,100), December (-14,500), November (+8,800) and October (-63,000).

The quarterly average retail job data has been relatively steady over the last nine months with three-month averages at: April through June 2010 (-1,033), January through March 2010 (+26,333) and October through December 2009 (-22,900).

Currently, there are 14.44 million retail trade jobs. A year ago, there were 14.55 million. In December 2007, there were 15.566 million.

Professional Business Services gained 46,000 jobs in June. Previous month changes were May (+25,000), April (+70,000), March (+1,000), February (+56,000), January (+23,000), December (+22,000), November (+106,000) and October (+11,000).

The quarterly professional business services job data has been steadily improving over the last nine months with three-month averages at: April through June 2010 (+47,000), January through March 2010 (+26,667) and October through December 2009 (+46,333).

Currently, there are 16.7 million professional business services jobs. A year ago there were 16.5 million. In December 2007, there were 18.1 million. This is one of the currently largest job growth fields.

Temporary help services added 20,500 jobs in June, and 345,200 jobs in the last 12 months.

Currently, there are 2.1 million temporary help services jobs. A year ago, there were 1.6 million. In December 2007, there were 2.6 million.

Education and Health Services gained 22,000 jobs in June. Previous month changes were May (+20,000), April (+28,000), March (+45,000), February (+32,000), January (+16,000), December (+26,000), November (+31,000) and October (+35,000).

The quarterly average education and health services job data has been improving steadily over the last nine months with three-month averages at: April through June 2010 (+23,333), January through March 2010 (+31,000) and October through December 2009 (+30,667).

Currently, there are 19.5 million education and health services jobs. A year ago, there were 19.2 million. In December 2007, there were 18.6 million. This is one of the currently largest job growth fields.

Government employment (federal, state and local) lost (net) 208,000 jobs in June. Of the jobs ended by the federal government, 225,000 were temporary jobs for the U.S. Census. The Census 2010 jobs will last through mid-July.

Previous month changes were May (net+400,000), April (+72,000), March (+50,000), February (-23,000), January (-2,000), December (-26,000), November (-11,000) and October (+38,000).

The quarterly average government employment (federal, state and local) jobs have been growing over the last nine months with three-month averages at: April through June 2010 (+88,000), January through March 2010 (+8,333) and October through December 2009 (+333).

All government (federal, state, local, U.S. Postal Service): Currently, there are 22.77 million jobs. A year ago, there were 22.57 million. In December 2007, there were 22.377 million.

Federal government (except U.S. Postal Service): Currently, there are 2.55 million jobs. A year ago there were 2.1 million. In December 2007, there were 1.974 million.

U.S. Postal Service: Currently, there are 654,900 jobs. A year ago, there were 703,900. In December 2007, there were 781,300.

State governments education: Currently, there are 2.385 million jobs. A year ago, there were 2.366 million. In December 2007, there were 2.327 million.

State governments (excluding education): Currently, there are 2.774 million jobs. A year ago, there were 2.811 million. In December 2007, there were 2.813 million.

Local governments education: Currently, there are 8.008 million jobs. A year ago, there were 8.094 million. In December 2007, there were 8.053 million.

Local governments (excluding education): Currently, there are 6.394 million jobs. A year ago, there were 6.484 million. In December 2007, there were 6.429 million.

The good news from this data is that overall, the job gains are increasing.

Unemployment spreads stayed relatively the same with the highest among teenagers (25.7%), followed down by African-Americans, then Hispanics. The lowest unemployment started with Asians (7.7%) followed up by Adult women (7.8%), Whites then Adult men (9.9%).

Average weekly hours and overtime

The average workweek for all employees remained consistent at 34.1 hours.

The average hourly and weekly earnings for production and non-supervisory employees in June held at $19.00 with weekly earnings at $634.60.

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring.

Civilian labor force

The total Civilian labor force rose to 153.7 million from the 153.2 million at the start of 2010. This indicates a mood elevation for workers re-entering the work force who had given up looking for work and now have hope that there are jobs for them.

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows.

The employment population (the number of the country’s working-age population that is employed) is at 139.1 million, up from the 138.3 million at the start of 2010. This number will grow as jobs are created and the unemployment rate recedes.

Comparing the present with the final month of the last major downturn in November 1982, the total Civilian labor force then stood at 111.1 million. In that month, there were 11.9 million people unemployed accounting for 10.8% of the available work force (average for the year was 10.6 million unemployed with the rate at 9.7%). The average for 2009 was 9.3%, increasing from 7.7% in January to 10.1% in December.

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 153.7 million:

Rate%	Unemployed	2009	Rate%	Unemployed	2009-2010
10.1	15.7 million	October	_	_	_
10.0	15.4 million	November	10.0	15.3 million	December ‘09
9.8	15.1 million	September	9.9	15.3 million	Apr ‘10
9.7	14.9 million	August	9.7	15.0 million	Jan–Mar, May ‘10
9.5	14.7 million	June	9.5	14.6 million	<= current Jun ’10
9.4	14.5 million	May,July
8.9	13.7 million	April
8.6(r)	13.2 million	March
8.2(r)	12.5 million	February
7.7(r)	11.7 million	January
7.0	10.7million
6.5	10.0 million
6.0	9.2 million
5.5	8.5 million	<= target
5.0	7.7 million
4.5	6.9 million

(r)=revised

To restore employment to the 5.5% level of 2008, 6.1 million people will have to regain their job or start new a job.

Ed.Note: Government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level. With the current Civilian labor force, that means that on a permanent basis there will be roughly 12.4 million people unemployed.

Fastest growing occupations and Occupations with the largest job growth

It comes as no surprise that the fastest growing occupations in 2008 and projected to 2018 are in the fields of network systems and data communication and all aspects of the medical field, followed closely by financial examiners (accountants, auditors, etc.).

The largest job growth fields also include office and administrative support jobs, sales and service jobs, teachers and jobs in construction and transportation.

Education and compensation go hand in hand.

Data collection:

The Census Bureau surveys 60,000 households across the country to insure an accurate demographic survey. This translates into about 110,000 individuals. All the counties and county-equivalent cities are grouped into 2,025 geographic sampling units. 824 of these units are selected to accurately represent the entire population of the United States. For a detailed explanation, see the BLS Handbook of Methods.

Each month, one-fourth of the interviewed households are rotated out. They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever.

Each month, 2,200 highly trained Census Bureau employees conduct interviews in the sample households for information on labor force activities (job holding and job seeking) or non-labor force status of household members.

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153.7 million workers in the Civilian labor force. A monthly total census would be cost-prohibitive.

Questions are specifically formulated so that neither the interviewer nor the persons interviewed decide their labor force classification. This prevents the sample from being distorted by respondents providing answers based on their opinion or what a “right” answer should be.

The basic concepts of employment are:

1.	People with jobs are employed
2.	People who are jobless, looking for jobs and available for work are unemployed.
3.	The sum of people employed or unemployed constitute the Civilian labor force.
4.	People who are neither employed nor unemployed are not in the Civilian labor force.
5.	People who are either institutionalized in a facility (correctional, residential nursing or mental health) or on active duty with the Armed Forces are not counted.

The unemployment rates are extrapolated from the survey results.

The quoted unemployment rate excludes people who have stopped looking for work because they believe no jobs are available (discouraged workers) and others outside the labor force. They are counted separately.

Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment. He hopes to create about 3.5 million jobs. Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%.

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010.

A senior White House official stated that the Obama administration’s fiscal stimulus plan will meet their previous estimates to save 3.5 million U.S. jobs by the end of 2010. White House officials have been careful to point out that estimated jobs created and saved have merely slowed continued job losses.

The president sent The Small Business Jobs and Wages Tax Cut to Congress on January 10, 2010 to try to stimulate more hiring. It focused on small businesses, because as the president stated, “Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America.” The proposal included:

Businesses will receive a $5,000 tax credit for every “net” new employee that they employ in 2010, capping at $500,000 per firm (and $250,000 for new firms) to ensure that the majority of the benefit goes to small businesses.
Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, up to the individual taxable maximum of $106,800.
Firms can claim the credit on a quarterly basis, returning money quickly to businesses, providing an early incentive to hire and increase payrolls.
The Recovery Act tax incentives will be extended for depreciation of capital spending.
There will be increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees.
There will be increased investments in roads, highways, bridges and other construction, and grants to state and local governments to create jobs and avoid layoffs

President Obama noted that this proposal would be worked into the various other proposals that have already advanced in Congress, such as The HIRING Act of 2010 and The Jobs for Main Street Bill of 2010.

Because the Troubled Asset Relief Program (TARP) program is costing less with fewer losses than expected, as much as $200 billion has been freed up to pay for other parts of the jobs program, without increasing projected federal deficits.

Stimulus spending by state

As of June 23, 2010, of the
$336,069,071,636 announced,
$401,449,935,194 (119.5%) has been made available
$251,386,487,383 (74.8%) has been paid out to the states

Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%.

The approach that time, however, was to fix the economy at the expense of the worker.

Some compare the fall in employment to 1974-1975 and 1981-1982. If the comparison is accurate, the peak in unemployment may be reached within the next four to five months (past performance is no guarantee of the future).

Economist William Polley made a chart that includes every recession since World War II. It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak.

Using the Department of Labor unemployment tables of unemployment rates and 5.5% as the “normal” rate of unemployment, I have analyzed things a little differently. Of course, along the way, the Civilian labor force increases, so the percentages represent ever more workers.

The following table shows unemployment start dates, peaks and returns to the normal rate of 5.5%, Civilian labor force in millions of workers for that year, and the lengths of times from the start date in months:

Recession peaks 1974-2010

		Millions	Pct	Labor	Growth	Recession Period
		Unemployed		Force		Length
Start	July 1974		5.5	91.9
Peak	May 1975	8.4	9.0			10 mos
Return	May 1979		5.6	104.9	14.1%	4 yrs 10 mos

Start	May 1979		5.6	104.9
Peak	Nov 1982	11.9	10.8			3 yrs 6 mos
Return	Apr 1988		5.4	121.6	15.9%	8 yrs 11 mos

Start	Nov 1990		6.2	125.8
Peak	May 1992	9.7	7.6			18 mos
Return	Dec 1994		5.5	131.0	4.1%	4 yrs 1 mo

Start	Nov 2001		5.5	143.7
Peak	June 2003	9.2	6.3			19 mos
Return	Feb 2004		5.6	146.5	1.9%	2 yrs 3 mos

Start	Dec 2007	7.7	5.0	153.7
Peak	Dec 2009	15.7	10.1			24 mos
Return	June 2010	14.6	9.5	153.7	0.0%	2 yrs 6 mos

Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later. By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.

The aggressive increase in the Civilian labor force in that period can likely be attributed to post-World War II babies reaching adulthood, with some entering the labor force after secondary school and the rest entering the workforce after further education.

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Unemployment rates:
It is interesting to recognize that in most cases, unemployment peaks roughly one-third of the timeline for unemployment to return to its “normal” rate, so we can double the number of months from the Start to the Peak to expect to arrive at an approximate return to “normal.”

We live in hope (again, past performance is no guarantee of the future).

Economic Picture: May 2010

BobG — Fri, 04 Jun 2010 05:11:39 +0000

Report from the U.S. Department of Labor statistics:

Employment Situation:

Total nonfarm payroll employment increased by 431,000 in May, but 411,000 of those were temporary Census workers who will be employed only through July.

Private sector employment changed little (+41,000).

The hiring of the 411,000 Census workers forced the unemployment rate down to 9.7 percent, the same rate as in the first 3 months of 2010, but for all intents, we can call this month a draw, with permanent employment increasing by 41,000 and the Civilian labor force remaining relatively constant at 154.4 million (from 154.7 million in April).

Calculating the unemployment rate taking out the 411,000 temporary workers whose jobs will end in July, the number unemployed stands at 15.383 million in the Civilian labor force of 154.393, making the “real” unemployment rate 9.96%.

Employment status:

The Civilian labor force represents employed and unemployed workers.

–Current: 154.4 million; one year ago: 155.0 million.

–Employed workers — current: 139.4 million; one year ago: 140.4 million.

–Unemployed workers — current: 15.0 million (9.7%); one year ago: 14.5 million (9.4%).

In between, the unemployment rate rose to 10% for the last three months of 2009.

There have been steady increases to the Civilian labor force, adding 1.3 million workers since the start of 2010.

Payroll employment decreased by 4.5 million jobs in 2009, wiping out all the jobs created in the private sector over the last decade.

Total unemployment peaked at 15.7 million (10.1%) in October 2009 rising from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009.

In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable.

In addition, 1.6 million college graduates are expected to join the Civilian labor force, with last year’s graduates still scrambling to land jobs.

Household Survey Data

Nonfarm payroll employment increased by 431,000 in May (including 411,000 temporary Census workers) after a big increase in April (+290,000) and March (+208,000 [revised]) and holding nearly level in February (+39,000 [revised]) and January (+14,000). This followed a big drop in December (-109,000), and a boost to prepare for the holiday season in November (+64,000). Previous month changes were October (-224,000), and September (-225,000).

The quarterly average nonfarm payroll job data has been improving steadily over the last nine months with three-month averages at: March through May 2010 (+309,667), December 2009 through February 2010 (-18,667), and September through November 2009 (-128,333).

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was 8.8 million in May. These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs. Previous month part time figures have held relatively steady since March 2009 at 9 million.

The number of persons marginally attached to the labor force was 2.2 million in May. These are workers who wanted and were available for work, and had looked for work sometime in the last 12 months. They had not looked for work in the last 4 weeks and so were not considered part of the labor force.

Among the marginally attached workers, the number of discouraged workers was 1.1 million in May. These are persons no longer looking for work. The peak was 1.2 million, reached in February 2010.

The average duration of unemployment has risen to 34.4 weeks in May. At the start of the recession the average length of unemployment was 16.5 weeks.

Long-term unemployed persons (jobless for 27 weeks and more) remained at 6.8 million. This is more than five times the number at the start of the recession in December 2007 (1.3 million). In 2009 alone, 3.5 million were added to that number. Four in ten (46%) unemployed persons are in this category.

Establishment Survey Data

Construction lost 35,000 jobs in May, nearly erasing the gains of the last two months. Previous month changes were April (+14,000), March (+26,000 [revised]), February (-64,000), January (-77,000), December (-32,000), November (-15,000), October (-67,000) and September (-71,000).

The quarterly average construction job data has been improving over the last nine months with three-month averages at: March through May 2010 (+1,667), December 2009 through February 2010 (-57,667) and September through November 2009 (-51,000).

Currently, there are 5.643 million construction jobs. A year ago, there were 6.150 million jobs. In December 2007, there were 7.390 million (-1.747 million).

Manufacturing gained 29,000 jobs in May. Previous month changes were April (+44,000), March (+17,000), February (+1,000), January (+20,000), December (-23,000), November (-25,000), October (-57,000) and September (-48,000).

The quarterly average manufacturing job data has been improving steadily over the last nine months with three-month averages at: March through May 2010 (+30,000), December 2009 through February 2010 (-667) and September through November 2009 (-130,000).

Currently, there are 11.66 million manufacturing jobs. A year ago, there were 11.91 million. In December 2007, there were 13.73 million (-2.07 million).

Retail trade lost 6,600 jobs in May. Previous month changes were April (+18,500), March (+22,800), February (+7,100), January (+49,100), December (-14,500), November (+8,800), October (-63,000) and September (-48,300).

The quarterly average retail job data has been improving over the last nine months with three-month averages at: March through May 2010 (+11,567), December 2009 through February 2010 (+13,900) and September through November 2009 (-34,167).

Currently, there are 14.45 million retail trade jobs. A year ago, there were 14.57 million. In December 2007, there were 15.566 million (-1.166 million).

Professional Business Services gained 22,000 jobs in May. Previous month changes were April (+73,000), March (+1,000), February (+56,000), January (+23,000), December (+22,000), November (+106,000), October (+11,000) and September (-22,000).

The quarterly professional business services job data has been improving over the last nine months with three-month averages at: March through May 2010 (+32,000), December 2009 through February 2010 (+33,667) and September through November 2009 (+31.667).

Currently, there are 16.663 million professional business services jobs. A year ago there were 16.585 million. In December 2007, there were 18.051 million (-1.388 million). This is one of the largest job growth fields.

Temporary help services added 31,000 jobs in May, and 296,600 jobs in the 12 months.

Currently, there are 2.086 million temporary help services jobs. A year ago, there were 1.792 million. In December 2007, there were 2.557 million (-471,000).

Education and Health Services gained 17,000 jobs in May. Previous month changes were April (+35,000), March (+45,000), February (+32,000), January (+16,000), December (+26,000), November (+31,000), October (+35,000) and September (+26,000).

The quarterly average education and health services job data has been improving steadily over the last nine months with three-month averages at: March through May 2010 (+32,333), December 2009 through February 2010 (+24,667) and September through November 2009 (+30,667).

Currently, there are 19.494 million education and health services jobs. A year ago, there were 19.137 million. In December 2007, there were 18.559 million (+935,000). This is one of the largest job growth fields.

Government employment (federal, state and local) added (net) 390,000 jobs in May. Of the jobs added by the federal government, 411,000 were temporary jobs for the U.S. Census, adding to the 66,000 added in April and the 48,000 added in March. The Census 2010 jobs will last through mid-July.

Previous month changes were April (+72,000), March (+50,000), February (-23,000), January (-2,000), December (-26,000), November (-11,000), October (+38,000) and September (-39,000).

The quarterly average government employment (federal, state and local) job data has been improving over the last nine months with three-month averages at: March through May 2010 (+170,667), December 2009 through February 2010 (-17,000) and September through November 2009 (-4,000).

All government (federal, state, local, U.S. post office): Currently, there are 22.968 million jobs. A year ago, there were 22.628 million jobs. In December 2007, there were 22.377 million (+340,000).

Federal government (except U.S. post office): Currently, there are 2.737 million jobs. A year ago there were 2.156 million. In December 2007, there were 1.974 million (+763,000).

U.S. Post Office: Currently, there are 657,700 jobs. A year ago, there were 708,800 jobs. In December 2007, there were 781,300 (-123,600).

State governments education: Currently, there are 2.391 million jobs. A year ago, there were 2.373 million jobs. In December 2007, there were 2.327 million (+64,000).

State governments (except education): Currently, there are 2.767 million jobs. A year ago, there were 2.817 million jobs. In December 2007, there were 2.813 million (+46,000).

Local governments education: Currently, there are 8.010 million jobs. A year ago, there were 8.087 million jobs. In December 2007, there were 8.053 million (-43,000).

Local governments (except education): Currently, there are 6.406 million jobs. A year ago, there were 6.487 million jobs. In December 2007, there were 6.429 million (-13,000).

The good news from this data is that overall the job gains are increasing.

Unemployment spreads stayed relatively the same with the highest among teenagers (26.4%), followed down by African-Americans, then Hispanics. The lowest unemployment started with Asians (7.5%) followed up by Adult women (8.1%), Whites then Adult men (9.8%).

Average weekly hours and overtime

The average workweek for all employees remained consistent at 34.2 hours.

The average hourly and weekly earnings for production and non-supervisory employees in May held at $18.99 with weekly earnings at $636.17.

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring.

More people quit their jobs in the past three months than were laid off — a sharp reversal after 15 straight months in which layoffs exceeded voluntary departures. The trend suggests the job market is finally thawing.

Some of the quitters are leaving for new jobs. Others have no firm offers. But their newfound confidence about finding work is itself evidence of more hiring and a strengthening economy.

Civilian labor force

The total Civilian labor force rose to 154.4 million from the 153.2 million at the start of 2010. This indicates a mood elevation for workers re-entering the work force who had given up looking for work and now have hope that there are jobs for them.

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows. This is the reason the unemployment rate rose along with added jobs.

The employment population (the number of the country’s working-age population that is employed) is at 139.4 million, up from the 137.8 million at the start of 2010. This number will grow as jobs are created and the unemployment rate recedes.

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 154.4 million:

Rate%_	Unemployed	2009	Rate%_	Unemployed	2009-2010
10.1(r)	15.7 million	October	_	_	_
10.0	15.4 million	November	10.0	15.3 million	December ‘09
9.8	15.1 million	September	9.9	15.3 million	Apr ‘10
9.7	14.9 million	August	9.7	15.0 million	Jan–Mar, May ‘10 <=we are here
9.5	14.7 million	June
9.4	14.46 million	May,July
8.9	13.7 million	April
8.6(r)	13.2 million	March
8.2(r)	12.5 million	February
7.7(r)	11.7million	January
7.0	10.7million
6.5	10.0 million
6.0	9.2 million
5.5	8.5 million	<= target
5.0	7.7 million
4.5	6.9 million

(r)=revised

To restore employment to the 5.5% level of 2008, 6.5 million people will have to regain their job or start new a job.

Fastest growing occupations and Occupations with the largest job growth

The largest job growth fields also include office and administrative support jobs, sales and service jobs, teachers and jobs in construction and transportation.

Education and compensation go hand in hand.

Data collection:

Each month, one-fourth of the interviewed households are rotated out. They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever.

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 154.4 million workers in the Civilian labor force. A monthly total census would be cost-prohibitive.

The basic concepts of employment are:

1.	People with jobs are employed
2.	People who are jobless, looking for jobs and available for work are unemployed.
3.	The sum of people employed or unemployed constitute the Civilian labor force.
4.	People who are neither employed nor unemployed are not in the Civilian labor force.
5.	People who are either institutionalized in a facility (correctional, residential nursing or mental health) or on active duty with the Armed Forces are not counted.

The unemployment rates are extrapolated from the survey results.

Stimulus (Recovery Act):

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010.

A senior White House official stated that the Obama administration’s fiscal stimulus plan will meet their previous estimates to save 3.5 million U.S. jobs by the end of 2010. White House officials have been careful to point out that estimated jobs created and saved have merely slowed continued job losses.

Businesses will receive a $5,000 tax credit for every “net” new employee that they employ in 2010, capping at $500,000 per firm (and $250,000 for new firm) to ensure that the majority of the benefit goes to small businesses.
Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, up to the individual taxable maximum of $106,800.
Firms can claim the credit on a quarterly basis, returning money quickly to businesses, providing an early incentive to hire and increase payrolls.
The Recovery Act tax incentives will be extended for depreciation of capital spending.
There will be increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees.
There will be increased investments in roads, highways, bridges and other construction, and grants to state and local governments to create jobs and avoid layoffs

Stimulus spending by state

As of June 2, 2010, of the
$341,651,746,249 announced,
$394,202,067,677 (115.4%) has been made available
$239,160,763,287 (70.0%) has been paid out to the states

Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%.

The approach that time, however, was to fix the economy at the expense of the worker.

Economist William Polley made a chart that includes every recession since World War II. It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak.

Recession peaks 1974-2010

		Millions	Pct	Labor	Growth	Recession Period
		Unemployed		Force		Length
Start	July 1974		5.5	91.9
Peak	May 1975	8.4	9.0			10 mos
Return	May 1979		5.6	104.9	14.1%	4 yrs 10 mos

Start	May 1979		5.6	104.9
Peak	Nov 1982	11.9	10.8			3 yrs 6 mos
Return	Apr 1988		5.4	121.6	15.9%	8 yrs 11 mos

Start	Nov 1990		6.2	125.8
Peak	May 1992	9.7	7.6			18 mos
Return	Dec 1994		5.5	131.0	4.1%	4 yrs 1 mo

Start	Nov 2001		5.5	143.7
Peak	June 2003	9.2	6.3			19 mos
Return	Feb 2004		5.6	146.5	1.9%	2 yrs 3 mos

Start	Dec 2007		5.0	153.7
Peak	Dec 2009	15.7	10.1			24 mos
Return	May 2010	15.0	9.7	154.4	0.5%	2 yrs 5 mos so far

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Unemployment rates:

Economic Picture: April 2010

BobG — Fri, 07 May 2010 14:02:16 +0000

Report from the U.S. Department of Labor statistics:

Employment:

Nonfarm payroll employment rose by 290,000 yet the Unemployment rate also rose by 0.2% to 9.9% in April.

The Unemployment rate had held at 9.7% for January through March after dropping from the high of 10.1% in October 2009.

How can there be more workers employed yet the Unemployment rate goes up?

The reason is the number unemployed (and the unemployment rate) includes only those who looked for work in the last 4 weeks, and changes as the Civilian labor force population fluctuates.

The number of unemployed in March was 15.0 million. The number of unemployed persons in April was 15.3 million, increasing the unemployment rate 9.9 percent.

Here’s the numbers: The Civilian labor force increased by 805,000 in April (it has grown by 1.656 million since the start of 2010). 550,000 obtained jobs, 255,000 did not. Unemployment still dropped by 635,000 in April to 15.265 million, giving 9.86 percent unemployment.

In addition, 1.6 million college graduates are expected to join the Civilian labor force next month, with last year’s graduates still scrambling to land jobs.

See this report’s section on Civilian Labor Force.

Nonfarm payroll employment increased by 290,000 in April after a big increase in March (+230,000 [revised]) and holding nearly level in February (+39,000 [revised]) and January (+14,000). This followed a big drop in December (-109,000), and a boost to prepare for the holiday season in November (+64,000). Previous month changes were October (-224,000), September (-225,000), and August (-211,000).

The quarterly average nonfarm payroll job layoff figures have been improving steadily over the last nine months with three-month averages at: February through April 2010 (+186,333), November 2009 through January 2010 (-27,000), and August through October 2009 (-220,000).

Payroll employment decreased by 4.5 million jobs in 2009, wiping out all the jobs created in the private sector over the last decade.

The current rate is 9.9% and the number unemployed is at 15.3 million.

Total unemployment peaked at 15.7 million (10.1%) in October 2009 rising from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009.

In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was 9.2 million in April. These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs. Previous month part time figures have held relatively steady since March 2009 at 9 million.

About 2.4 million workers are considered marginally attached to the labor force. These are workers who wanted and were available for work, and had looked for work sometime in the last 12 months. They had not looked for work in the last 4 weeks and so were not considered part of the labor force.

Among the marginally attached workers, discouraged workers (persons no longer looking for work) rose to 1.2 million in April equaling the peak 1.2 million in February 2010, and up by 457,000 from a year ago.

Long-term unemployed persons (jobless for 27 weeks and more) stand at 6.7 million. This is more than five times the number at the start of the recession in December 2007 (1.3 million). In 2009 alone, 3.5 million were added to that number. Four in ten (45.9%) unemployed persons are in this category.

The average length of unemployment has risen to 33 weeks in April. At the start of the recession the average length of unemployment was 16.5 weeks.

Industry sectors and historical data

Construction gained 14,000 jobs in April. Previous month changes were March (+26,000 [revised]), February (-64,000), January (-77,000), December (-32,000), November (-15,000), October (-67,000), September (-71,000) and August (-64,000).

The quarterly average construction job figures have been improving over the last nine months with three-month averages at: February through April (-8,000), November 2009 through January 2010 (-41,333) and August through October 2009 (-67,333).

Currently, there are 5.625 million construction jobs. In December 2007, there were 7.491 million (down 1.866 million). In December 2009 there were 5.696 million (down 71,000).

Manufacturing gained 44,000 jobs in April. Previous month changes were March (+17,000), February (+1,000), January (+20,000), December (-23,000), November (-25,000), October (-57,000), September (-48,000) and August (-57,000).

The quarterly average manufacturing job figures have been improving steadily over the last nine months with three-month averages at: February through April (+20,667), November 2009 through January 2010 (-9,333) and August through October 2009 (-54,000).

Currently, there are 11.635 million manufacturing jobs. In December 2007, there were 13.726 million (down 1.866 million). In December 2009 there were 11.534 million (up 101,000).

Retail trade gained 12,000 jobs in April. Previous month changes were March (+15,000), February (+8,000), January (+42,000), December (-18,000), November (+9,000), October (-63,000), September (-43,000) and August (-15,000).

The quarterly average retail job figures have been improving steadily over the last nine months with three-month averages at: February through April (+11,667), November 2009 through January 2010 (+11,000) and August through October 2009 (-40,333).

Currently, there are 14.444 million retail trade jobs. In December 2007, there were 15.566 million (down 1.122 million). In December 2009 there were 14.360 million (up 84,000).

Professional Business Services gained 80,000 jobs in April. Previous month changes were March (+11,000), February (+51,000), January (+30,000), December (+20,000), November (+109,000), October (+11,000), September (-22,000) and August (-34,000).

The quarterly professional business services job figures have been improving over the last nine months with three-month averages at: February through April (+44,000), November 2009 through January 2010 (+53,000) and August through October 2009 (-15,000).

Currently, there are 16.660 million professional business services jobs. In December 2007, there were 18.051 million (down 1.391 million). In December 2009 there were 16.488 million (up 172,000). This is one of the largest job growth fields.

Temporary help services added 26,000 jobs in April, and 330,000 jobs since September 2009.

Currently, there are 2.055 million temporary help services jobs. In December 2007, there were 2.557 million (down 502,000). In December 2009 there were 1.191 million (up 864,000).

Education and Health Services gained 35,000 in April. Previous month changes were March (+45,000), February (+32,000), January (+16,000), December (+26,000), November (+31,000), October (+35,000), September (+26,000) and August (+35,000).

The quarterly average education and health services job growth figures have been improving steadily over the last nine months with three-month averages at: February through April (+37,333), November 2009 through January 2010 (+24,333) and August through October 2009 (+32,000).

Currently, there are 19.489 million education and health services jobs. In December 2007, there were 18.559 million (up 930,000). In December 2009 there were 19.350 million (up 139,000). This is one of the largest job growth fields.

Government employment (federal, state and local) gained 59,000 jobs in April. While state and local governments trimmed their employment by 6,000 jobs, the federal government added 69,100 jobs, while trimming 4,000 jobs from the US Post Office.

Of the jobs added by the federal government, 66,000 were temporary jobs for the U.S. Census, accumulating with the 48,000 added in March. Over the next two months, another 600,000 to 700,000 census jobs will be added, and last through mid-July.

Previous month changes were March (+39,000), February (-18,000), January (+7,000), December (-27,000), November (-11,000), October (+38,000), September (-39,000) and August (+4,000).

The quarterly average government employment (federal, state and local) job figures have been irregular over the last nine months with three-month averages at: February through April (+26,667), November 2009 through January 2010 (-10,333) and August through October 2009 (+1,000).

Federal government (except U.S. post office): Currently, there are 2.320 million jobs. In December 2007, there were 1.974 million (up 346,000). In December 2009 there were 2.160 million (up 160,000).

U.S. Post Office: Currently, there are 658,900 jobs. In December 2007, there were 781,300 (down 122,400). In December 2009 there were 663,700 (down 4,800).

State governments (except education): Currently, there are 2.789 million jobs. In December 2007, there were 2.813 million (up 194,000). In December 2009 there were 22.481 million (up 90,000).

State governments education: Currently, there are 2.392 million jobs. In December 2007, there were 2.327 million (up 65,000). In December 2009 there were 2.383 million (up 9,000).

Local governments (except education): Currently, there are 6.416 million jobs. In December 2007, there were 6.429 million (down 13,000). In December 2009 there were 6.439 million (down 23,000).

Local governments education: Currently, there are 8.005 million jobs. In December 2007, there were 8.053 million (down 48,000). In December 2009 there were 8.040 million (down 35,000).

All government (federal, state, local, U.S. post office): Currently, there are 22.571 million jobs. In December 2007, there were 22.377 million (up 194,000). In December 2009 there were 22.481 million (up 90,000).

The good news from this data is that overall the job gains are increasing.

Unemployment spreads stayed relatively the same with the highest among teenagers (25.4%), followed down by African-Americans, then Hispanics. The lowest unemployment started with Asians (6.8%) followed up by Adult women (8.2%), Whites then Adult men (10.1%).

Average weekly hours and overtime

The average workweek for all employees remained consistent at 34.1 hours.

The average hourly and weekly earnings for production and non-supervisory employees in April held at $18.96 with weekly earnings at $633.26.

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring.

Civilian labor force

The total Civilian labor force rose sharply to 154.7 million from the 153.1 million at the start of 2010. This indicates a mood elevation for workers re-entering the work force who had given up looking for work and now have hope that there are jobs for them.

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows. This is the reason the unemployment rate rose along with added jobs.

The employment population (the number of the country’s working-age population that is employed) is at 139.5 million, up from the 137.8 million at the start of 2010. This number will grow as jobs are created and the unemployment rate recedes.

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 154.7 million:

Rate%_	Unemployed	2009	Rate%_	Unemployed	2009-2010
10.1(r)	15.7 million	October	_	_	_
10.0	15.4 million	November	10.0	15.3 million	December ‘09
9.8	15.1 million	September	9.9	15.3 million	<=we are here–Apr ‘10
9.7	14.9 million	August	9.7	15.0 million	Jan-Mar ‘10
9.5	14.7 million	June
9.4	14.46 million	May,July
8.9	13.7 million	April
8.6(r)	13.2 million	March
8.2(r)	12.5 million	February
7.7(r)	11.7million	January
7.0	10.7million
6.5	10.0 million
6.0	9.2 million
5.5	8.5 million	<= target
5.0	7.7 million
4.5	6.9 million

(r)=revised

To restore employment to the 5.5% level of 2008, 6.8 million people will have to regain their job or start new a job.

Ed.Note: Government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level. With the current Civilian labor force, that means that on a permanent basis there will be roughly 12.4 million people unemployed.

Fastest growing occupations and Occupations with the largest job growth

The largest job growth fields also include office and administrative support jobs, sales and service jobs, teachers and jobs in construction and transportation.

Education and compensation go hand in hand.

Data collection:

Each month, one-fourth of the interviewed households are rotated out. They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever.

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 154.7 million workers in the Civilian labor force. A monthly total census would be cost-prohibitive.

The basic concepts of employment are:

1.	People with jobs are employed
2.	People who are jobless, looking for jobs and available for work are unemployed.
3.	The sum of people employed or unemployed constitute the Civilian labor force.
4.	People who are neither employed nor unemployed are not in the Civilian labor force.
5.	People who are either institutionalized in a facility (correctional, residential nursing or mental health) or on active duty with the Armed Forces are not counted.

The unemployment rates are extrapolated from the survey results.

Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment. He hopes to create about 3.5 million jobs. Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%.

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010.

Businesses will receive a $5,000 tax credit for every “net” new employee that they employ in 2010, capping at $500,000 per firm (and $250,000 for new firm) to ensure that the majority of the benefit goes to small businesses.
Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, up to the individual taxable maximum of $106,800.
Firms can claim the credit on a quarterly basis, returning money quickly to businesses, providing an early incentive to hire and increase payrolls.
The Recovery Act tax incentives will be extended for depreciation of capital spending.
There will be increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees.
There will be increased investments in roads, highways, bridges and other construction, and grants to state and local governments to create jobs and avoid layoffs

Stimulus spending by state

As of May 5, 2010, of the
$335,693,715,067 announced,
$382,097,920,368 (113.8%) has been made available
$225,647,592,857 (67.2%) has been paid out to the states

Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%.

The approach that time, however, was to fix the economy at the expense of the worker.

Economist William Polley made a chart that includes every recession since World War II. It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak.

Recession peaks 1974-2010

		Millions	Pct	Labor	Growth	Recession Period
		Unemployed		Force		Length
Start	July 1974		5.5	91.9
Peak	May 1975	8.4	9.0			10 mos
Return	May 1979		5.6	104.9	14.1%	4 yrs 10 mos

Start	May 1979		5.6	104.9
Peak	Nov 1982	11.9	10.8			3 yrs 6 mos
Return	Apr 1988		5.4	121.6	15.9%	8 yrs 11 mos

Start	Nov 1990		6.2	125.8
Peak	May 1992	9.7	7.6			18 mos
Return	Dec 1994		5.5	131.0	4.1%	4 yrs 1 mo

Start	Nov 2001		5.5	143.7
Peak	June 2003	9.2	6.3			19 mos
Return	Feb 2004		5.6	146.5	1.9%	2 yrs 3 mos

Start	Dec 2007		5.0	153.7
Peak	Dec 2009	15.7	10.1			24 mos
Return	Apr 2010	15.3	9.9	154.7	0.7%	2 yrs 4 mos so far

Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later. By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

What if I can’t pay my taxes?

BobG — Thu, 15 Apr 2010 14:39:41 +0000

http://www.irs.gov/newsroom/article/0,,id=201879,00.html

We have finally finished our tax return for last year. Instead of a refund, we owe a small mountain of debt to the IRS, and a small window of time to pay it.

Let’s not panic. This is a recession year. We are not going to jail. If the IRS put everyone in jail that couldn’t pay their taxes, there would be more people in, than out.

We are going to look at this logically. Our credit cards are ‘maxed’ and banks are not even calling us back when we apply for an unsecured loan. Relatives are not an option, either because they have no extra money or we see our reputation as the family beggar lasting for generations. We are on our own.

What to do

Number one — file your tax return on time and pay as much as you can to minimize penalties and interest, or if you are not ready, file an extension but still pay as much as you can. Remember, you won’t go to prison because you don’t have the money for your taxes, but not filing is a criminal act that could result in jail time.

Number two — contact the IRS (1-800-829-1040) to discuss your payment options. They have regional offices around the country staffed with thousands of people ready to help. There may be a wait, but they announce the waiting time, and it is worth waiting.

Remember this — our country is coming out of a recession. One out of ten are still unemployed (15 million people). These are people that took every dime they could lay their hands on and spent it to feed and provide for their families. Do we think their first priority was making sure their taxes were current?

The government has a problem. They are spending huge amounts of money. Their tax base is severely handicapped. They are not going to be hard-lining anyone this year. Rather, they are happy when taxpayers are willing to work out their debt.

They may offer short-term (12 months) extensions to pay, an installment agreement, or an offer in compromise (if you owe big dollars). They cannot offer to put aside interest charges on money owed, but they may be able to waive late penalties.

For more information, see The Collection Process (http://www.irs.gov/taxtopics/tc201.html) and Tax Payment Options (http://www.irs.gov/taxtopics/tc202.html) and Form 1040 Instructions (http://www.irs.gov/pub/irs-pdf/i1040.pdf).

The IRS wants to make a deal. Call them—today.

What if you don’t file

There is a penalty of 5% per month for the balance owed until it reaches 25%. If you do file, the penalty is only 0.5% per month. Then there is the criminal act if you do not file.

Don’t ignore and don’t hide

Act before you get notices from the IRS about the unpaid tax bill. Contacting them shows you are trying to resolve the issue, and they respond to that offer of cooperation. Be truthful and ask for their help. They have a lot of experience collecting (they started in 1862 to pay for the civil war), they carry guns when necessary and they have been increasing their enforcement efforts.

Communication is the theme to working out the problem. You can’t hide. They will find you if necessary. The sooner you approach them the easier they will feel about your intentions.

Document the dates and the names of the people you speak with. Keep notes on what was said and what commitments were made. The IRS is emphasizing customer service.

Options

Payment extension

Separate from penalties, the IRS charges about 4% annually (adjusted quarterly) on outstanding balances – a much better deal than credit card interest, and it doesn’t go on your credit report except if you default and the IRS files a Tax Lien.

If you expect to have the money within 120 days, apply for a payment extension (http://www.irs.gov or 800-829-1040). File on time to pay the 0.5% per month penalty plus interest instead of the 5% penalty per month plus interest.

Installment plan

If there is no way to have the money in four months, the IRS provides an installment plan similar to a loan agreement. Pay on time every month until the debt is paid. The agreement is found online, or the IRS person you speak to can help you.

Agree to pay what you can afford. Missing or late payments on an IRS payment plan is serious business. The IRS goes from being your friend to the worst collection agency nightmare you can imagine.

If you have been current in the past, you owe less than $10,000 and you can pay it off within three years, the IRS will approve the plan automatically. If you owe less than $25,000 and can pay it off within five years, the IRS will probably approve it but may request details on your finances.

If you owe more than $25,000, the IRS may approve a payment plan but will get much more detailed about your finances (form 433F).

Starting a payment plan carries a $52 fee for automatic withdrawals from your bank account, or $105 if you send a monthly check. This is on top of the interest and penalties for outstanding balances.

Offer in Compromise

A last option for people who can’t come up with the full amount owed is to apply for an Offer in Compromise — essentially an agreement to pay the IRS less than you owe. But the IRS typically grants this only to people in dire financial circumstances. Only about one in five who apply are accepted.

To qualify, taxpayers must provide detailed accounting of their financial situation and agree to stick to strict minimized living expenses. Qualification includes a history of timely filing and paying taxes, and that “collection of the entire tax liability would create economic hardship, or exceptional circumstances exist where collection of the entire tax would be detrimental to voluntary compliance.”

The IRS cautions that an offer in compromise is only for taxpayers in extreme financial circumstances, far worse than financial problems. It is not a way to evade paying taxes.

This program requires an application (Form 656) plus a $150 fee plus the offer, and a nonrefundable deposit of as much as 20% of what you’re offering to pay (submitted with the offer). Offers can be a lump sum cash payment or set payments over a short time period. Get plan approval from the IRS before paying.

There are three payment options; cash offer (90 days), short-term deferred offer (24 months), and long-term deferred offer (60 months).

Final approval can take three to nine months, although the IRS will accept the plan by default if it not rejected or returned within 24 months. It will be based upon equity in your assets and future income. Interest will still be accrued until the debt is settled.

Think twice about companies promising a settlement of “pennies on the dollar.”

Choosing a Tax Preparer

BobG — Sun, 04 Apr 2010 02:17:59 +0000

The April 15^th deadline for filing our taxes is almost upon us. At this stage, many of us would rather have someone else prepare our return than struggle with the deadline approaching.

The IRS offers some help on choosing a tax preparer.

http://www.irs.gov/individuals/article/0,,id=133088,00.html

From the IRS —

It is important for taxpayers to find qualified tax professionals if they need help preparing and filing their tax returns.

Unqualified tax preparers may overlook or miss legitimate deductions or credits that could cause their clients to pay more tax than they should.
Unqualified preparers may make costly mistakes like taking illegitimate deductions or credits that cause their clients to initially pay less tax than they should but later incur assessed deficiencies, penalties, and interest when the errors are uncovered.

Most reputable preparers will ask to see your receipts and will ask you multiple questions to determine your qualifications for expenses, deductions and other items. By doing so they have your best interest in mind and are trying to help you avoid penalties, interest or additional taxes that could result from an IRS examination.

Remember, no matter who prepares a tax return, the taxpayer is legally responsible for all of the information on that tax return.

Here are some suggestions to consider when hiring a tax professional:

Avoid preparers who:

claim they can obtain larger refunds than other preparers. If your returns are prepared correctly, every preparer should come up with substantially similar numbers.
inflate personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Preparers may, for example, manipulate income figures to fraudulently obtain tax credits, such as the Earned Income Tax Credit.
guarantee results and refunds.
base fees on a percentage of the amount of the refund. A practitioner may not charge a contingent fee (percentage of your refund) for preparing an original tax return.
delegate your return down to someone with less training or some unknown worker.
exports your return to a foreign country for preparation. Foreign countries do not have the same security and privacy laws as the United States nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.

Choose a preparer who:

you will be able to contact and be responsive to your needs. You should know exactly who works with your tax matters at all times and how to contact that person. Ask who will actually prepare the return before engaging services.
has the proper credentials meet your needs or if your state mandates licensing or registration requirements for paid preparers. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return that they signed as a preparer.
signs the tax return and provides a copy
has no questionable history with the Better Business Bureau, your state’s board of accountancy for CPAs, your state’s bar association for attorneys, the IRS Office of Professional Responsibility (OPR) for enrolled agents or the oversight agency in states that license or register tax preparers (as of 2008, California and Oregon are the only two states that regulate paid tax preparers).

Ask if the preparer is affiliated with a professional organization that provides or requires its members to pursue continuing education and holds them accountable to a code of ethics.

Check IRS.gov for information regarding abusive shelters and other tax schemes and scams. Remember, if it sounds too good to be true, chances are it is.

The IRS can help many taxpayers prepare their own returns without the assistance of a paid preparer. Before seeking a paid preparer, taxpayers might consider how much information is available directly from the IRS through the IRS Web site such as:

Unfortunately, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Examples of improper actions by unscrupulous preparers include the preparation and filing of false income tax returns that claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions.

Even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the return. For that reason, taxpayers should never sign a blank tax form. And they should review the return before signing it and ask questions on entries they don’t understand.

In some situations, the client, or taxpayer, may not know of the false expenses, deductions, exemptions and/or credits shown on his or her tax return. However, when the IRS detects a fraudulent return, the taxpayer — not the return preparer — must pay the additional taxes and interest and may be subject to penalties.

The IRS Return Preparer Program focuses on enhancing compliance in the return-preparer community by investigating and referring criminal activity by return preparers to the Department of Justice for prosecution. The IRS can also assert appropriate civil penalties against unscrupulous return preparers.

Excerpts from public record documents on file show the following examples.

Preparers have been sent to prison for anywhere from two to six years and ordered to pay fines and restitution for defrauding the government and tax evasion by preparing false tax returns in order to create or to increase income tax refunds for their clients, and diverting false refunds to their own accounts.

Preparers have also been sentenced for posing as a CPA, preparing false tax returns, using their personal information and forging their signature in identity theft schemes.

Tax scams have included “experts” “decoding” the IRS code to convince clients they were not liable for federal income tax, “finding” deductions the IRS do not want taxpayers to know about, setting up sham nonprofit corporations to avoid taxes and other “zero tax” schemes.

Tax evasion is a risky crime, a felony, punishable by five years imprisonment and a $250,000 fine. Audits can lead to investigations and trials. Relatively speaking, the number of tax evasion trials is relatively few, but the IRS has a conviction rate of 81-89%, and the average sentence is 18 months.

The IRS is very accommodating when it comes to paying taxes, especially in this recession. But if fraud is suspected or uncovered, they can be your worst enemy.

Report suspected tax fraud and abusive return preparers by completing Form 3949-A and mailing it or a letter with similar information to:

Internal Revenue Service
Fresno, CA 93888

Related Links:
Tax Return Preparer Fraud
Choosing a Tax Preparer ( audio transcript; video)

Economic Picture: March 2010

BobG — Sat, 03 Apr 2010 03:06:28 +0000

Report from the U.S. Department of Labor statistics:

Employment:

The Unemployment rate remained the same in March at 9.7% after dropping from the high of 10.1% in October 2009.

Nonfarm payroll employment increased by 162,000 in March after holding nearly level in February (-14,000 [revised]) and January (+14,000 [revised]). This followed a big drop in December (-109,000 [revised]), and a boost to prepare for the holiday season in November (+64,000 [revised]). Previous month changes were October (-224,000 [revised]), September (-225,000 [revised]), August (-211,000 [revised]), July (-344,000 [revised]), June (-504,000), and May (-347,000).

The quarterly average nonfarm payroll job layoff figures have been improving steadily over the last 9 months. The three-month averages of January through March 2010 (+54,000), October through December 2009 (-128,333), and July through September 2009 (-260,000).

Since the start of the recession in December 2007, payroll employment has decreased by 8.4 million (4.5 million in 2009 alone). This wiped out all the jobs created in the private sector over the last decade.

The current rate is 9.7% and the number unemployed is at 15.0 million.

Total unemployment currently stands at 15.0 million (9.7%) after peaking at 15.7 million (10.1%) in October 2009 from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009.

In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable. This is the eighth consecutive month of unemployment holding steady within 0.3%.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) increased to 9.1 million in March. Previous month part time figures were February (8.8 million), January (8.3 million), December (9.2 million), November (9.2 million), October (9.2 million), September (9.2 million), August (9.1 million), July (8.8 million) and June (9.0 million).

These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs. Since the start of the recession, the number of such workers has increased by 3.7 million, and has remained relatively constant since March 2009 (9.0 million).

About 2.3 million workers are considered marginally attached to the labor force wanted and were available for work, and had looked for work sometime in the last 12 months. They had not looked for work in the last 4 weeks and so were not considered part of the labor force.

Among the marginally attached workers, discouraged workers (persons no longer looking for work) dropped to 1.0 million in March from a peak 1.2 million in February 2010, but up by 309,000 a year ago.

Long-term unemployed persons (jobless for 27 weeks and more) stand at 6.5 million. This is five times the number at the start of the recession in December 2007 (1.3 million). In 2009 alone, 3.5 million were added to that number. Four in ten (43.6%) unemployed persons are in this category.

The average length of unemployment has risen to 31.2 weeks in March. At the start of the recession the average length of unemployment was 16.5 weeks.

Ed.Note: The number unemployed (and the unemployment rate) includes only those who looked for work in the last 4 weeks, and changes as the Civilian labor force population varies.

The number unemployed contrasted with the changes in payroll employment is accounted for by workers no longer looking for work and therefore dropping out of the Civilian labor force.

As consumer and business confidence improves, more workers will start to look for jobs again, returning to the workforce in anticipation of better employment conditions, which drives the unemployment rate higher. On the other side, workers drop from the work force for a number of reasons including giving up looking for work.

Industry sectors and historical data

Construction gained 15,000 jobs in March. Previous month changes were February (-64,000), January (-77,000), December (-32,000), November (-15,000), October (-67,000), September (-71,000), August (-64,000), July (-80,000), and June (-91,000), with a total loss of 1.3 million jobs since December 2007.

The quarterly average construction job figures have been holding steady and slightly improving over the last 9 months with three-month averages at: January through March (-42,000), October through December 2009 (-38,000) and July through September 2009 (-71,667). The construction industry has lost 272,000 jobs in the last 12 months, but gained 507,000 jobs in 2010.

Manufacturing gained 17,000 jobs in March. Previous month changes were February (+1,000), January (+20,000), December (-23,000), November (-25,000), October (-57,000), September (-48,000), August (-57,000), July (-43,000), and June (-129,000), with a total loss of 1.1 million jobs since December 2007.

The quarterly average manufacturing job figures have been improving steadily over the last 9 months with three-month averages at: January through March (+12,667), October through December 2009 (-35,000) and July through September 2009 (-49,333). The manufacturing industry has gained 14,000 jobs in the last 12 months, and gained 151,000 jobs in 2010.

Retail trade gained 15,000 jobs in March. Previous month changes were February (+8,000), January (+42,000), December (-18,000), November (+9,000), October (-63,000), September (-43,000), August (-15,000), July (-53,500), and June (-24,400), with a total loss of 1.1 million jobs since December 2007.

The quarterly average retail job figures have been improving steadily over the last 9 months with three-month averages at: January through March (+21,667), October through December 2009 (-24,000) and July through September 2009 (-37,167). The retail trade industry has lost 203,000 jobs in the last 12 months, but gained 23 ,000 jobs in 2010.

Professional Business Services gained 11,000 jobs in March. Previous month changes were February (+51,000), January (+30,000), December (+20,000), November (+109,000), October (+11,000), September (-22,000), August (-34,000), July (-48,000), and June (-132,000), with a total gain of 982,000 jobs since December 2007.

The quarterly professional business services job figures have been improving steadily over the last 9 months with three-month averages at: January through March (+30,667), October through December 2009 (+46,667) and July through September 2009 (-34,667). The professional business service industry gained 188,000 jobs in the last 12 months, and gained 299,000 jobs in 2010.

Education and Health Services gained 45,000 in March. Previous month changes were February (+32,000), January (+16,000), December (+26,000), November (+31,000), October (+35,000), September (+26,000), August (+35,000), July (+21,000), and June (+28,000), with a total gain of 580,000 jobs since December 2007.

The quarterly average education and health services job growth figures have been improving steadily over the last 9 months with three-month averages at: January through March (+31,000), October through December 2009 (+30,667) and July through September 2009 (+27,333). The education and health service industry gained 170,000 jobs in the last 12 months, but declined by 82,000 jobs in 2010.

Government employment (federal, state and local) gained 39,000 jobs in March. While state and local governments trimmed their employment, the federal government added 51,300 jobs, while trimming 3,500 jobs from the US Post Office.

Of the jobs added by the federal government, 48,000 were temporary jobs for the U.S. Census.. Over the next two months, another 600,000 to 700,000 census jobs will be added, and last through mid-July.

Previous month changes were February (-18,000), January (+7,000), December (-27,000), November (-11,000), October (+38,000), September (-39,000), August (+4,000), July (-47,000), and June (-52,000), with a total gain (all levels) of 430,000 jobs since December 2007.

The quarterly average government employment (federal, state and local) job figures have been holding steady over the last 9 months with three-month averages at: January through March (+9,333), October through December 2009 (zero) and July through September 2009 (-27,333). Government (all levels) gained 283,000 jobs in the last 12 months, but declined by 84,000 jobs in 2010.

Temporary help services added 40,200 jobs in March, and 166,000 jobs in the last 12 months.

The good news from this data is that the job gains are increasing.

Unemployment spreads stayed relatively the same with the highest among teenagers (26.1%), followed down by African-Americans, then Hispanics. The lowest unemployment started with Asians (7.5%) followed up by Adult women (8.0%), Whites then Adult men (10.0%).

Average weekly hours and overtime

The average manufacturing workweek remained increased to 39.9 hours with overtime at 2.9 hours.

The average manufacturing hourly earnings for production and non-supervisory employees in March dropped by $0.01 to $18.45. 12 months ago the hourly earnings were $18.14 (+1.7%).

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring.

Civilian labor force

The total Civilian labor force remained relatively constant at 153.9 million (up 851,000 from 153,059,000 at the start of 2010). This indicates a mood elevation for workers who now have hope that there is work. In February 2010 there were a million fewer workers in the work force than in February 2009 (154.4 million). These were generally workers who had given up looking for work.

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows.

This is the reason the unemployment rate has remained constant for the last few months.

The employment population (the number of the country’s working-age population that is employed) is at 138.9 million, 1.9 million less than 12 months ago. This number will grow as jobs are created and the unemployment rate recedes.

Comparing now with the final month of the last major downturn in November 1982, the total Civilian labor force then stood at 111.1 million. In that month, there were 11.9 million people unemployed accounting for 10.8% of the available work force (average for the year was 10.6 million unemployed with the rate at 9.7%). The average for 2009 was 9.3%, increasing from 7.7% in January to 10.1% in December.

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 153.9 million:

Rate%_	Unemployed	2009	Rate%_	Unemployed	2009-2010
10.1(r)	15.7 million	October	_	_	_
10.0	15.4 million	November	10.0	15.3 million	December ‘09
9.8	15.1 million	September	9.7	15.0 million
9.7	14.9 million	August
9.5	14.7 million	June
9.4	14.46 million	May,July
8.9	13.7 million	April
8.6(r)	13.2 million	March
8.2(r)	12.5 million	February
7.7(r)	11.7million	January
7.0	10.7million
6.5	10.0 million
6.0	9.2 million
5.5	8.5 million	<= target
5.0	7.7 million
4.5	6.9 million

To restore employment to the 5.5% level of 2008, about 6.5 million people will have to regain their job or start new jobs. It is a tall mountain to climb.

Fastest growing occupations and Occupations with the largest job growth

It comes as no surprise that the fastest growing occupations 2008 and projected to 2018 are in the fields of network systems and data communication and all aspects of the medical field.

The largest job growth fields also include office and administrative support jobs, sales and service jobs, as well as teachers and construction and transportation jobs.

Education and salary of course go hand in hand.

Data collection:

Each month, one-fourth of the interviewed households are rotated out. They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever.

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153.9 million workers in the Civilian labor force. A monthly total census would be cost-prohibitive.

The basic concepts of employment are:

1.	People with jobs are employed
2.	People who are jobless, looking for jobs and available for work are unemployed.
3.	The sum of people employed or unemployed constitute the Civilian labor force.
4.	People who are neither employed nor unemployed are not in the Civilian labor force.
5.	People who are either institutionalized in a facility (correctional, residential nursing or mental health) or on active duty with the Armed Forces are not counted.

The unemployment rates are extrapolated from the survey results.

Their number has nearly doubled in the previous 12 months.

Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment. He hopes to create about 3.5 million jobs. Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%.

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010.

The president has now sent a proposal to Congress to try to stimulate more hiring. It includes:

helping small businesses expand with new tax breaks for those small businesses that hire,
increasing investments in roads, highways, bridges and other construction, and grants to state and local governments to avoid layoffs,
adding rebate incentives, particularly for consumers, for energy efficiency and green energy.

The biggest focus will be on small businesses. Most jobs are in the private sector, and most private sector employers are small businesses. The president stated, “Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America,”

The proposal includes:

A short-term tax incentive for small businesses that hire in 2010
A one-year elimination of the capital gains tax for new investments in small business stock
Extension of the Recovery Act enhanced expensing provision that allows small businesses to immediately expense up to $250,000 of qualified investment.
Extension of the Recovery Act tax incentives for depreciation of capital spending
Increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees.

Stimulus spending by state

As of March 23, 2010, of the
$333,277,042,891 announced,
$355,017,758,018 (106.5%) has been made available
$205,129,561,722 (61.5%) has been paid out to the states

Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%.

The approach that time, however, was to fix the economy at the expense of the worker.

Economist William Polley made a chart that includes every recession since World War II. It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak.

Recession peaks 1974-2010

		Millions	Pct	Labor	Growth	Recession Period
		Unemployed		Force		Length
Start	July 1974		5.5	91.9
Peak	May 1975	8.4	9.0			10 mos
Return	May 1979		5.6	104.9	14.1%	4 yrs 10 mos

Start	May 1979		5.6	104.9
Peak	Nov 1982	11.9	10.8			3 yrs 6 mos
Return	Apr 1988		5.4	121.6	15.9%	8 yrs 11 mos

Start	Nov 1990		6.2	125.8
Peak	May 1992	9.7	7.6			18 mos
Return	Dec 1994		5.5	131.0	4.1%	4 yrs 1 mo

Start	Nov 2001		5.5	143.7
Peak	June 2003	9.2	6.3			19 mos
Return	Feb 2004		5.6	146.5	1.9%	2 yrs 3 mos

Start	Dec 2007		5.0	153.7
Peak	Dec 2009	15.7	10.1			24 mos
Return	Mar 2010	15.0	9.7	153.9	0.1%	2 yrs 3 mo so far

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Scam Alert: Suspicious eMails

BobG — Thu, 01 Apr 2010 23:40:05 +0000

From the IRS–

The Internal Revenue Service has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by “scamsters” trying to gain access to consumers’ financial information in order to steal their identity and assets. When identity theft takes place over the Internet, it is called phishing.

How to Spot a Scam

Many e-mail scams are fairly sophisticated and hard to detect. However, there are signs to watch for, such as an e-mail that:

Requests detailed or an unusual amount of personal and/or financial information, such as name, SSN, telephone number, bank or credit card account numbers or security-related information, such as mother’s maiden name, either in the e-mail itself or on another site to which a link in the e-mail sends the recipient.
Dangles financial bait to get the recipient to respond to the e-mail, such as mentioning a tax refund or offering to pay the recipient to participate in an IRS survey.
Threatens a consequence for not responding to the e-mail, such as additional taxes or blocking access to the recipient’s funds.

Many of the e-mail scams originate in other countries and are written by non-native English speakers.

They get the Internal Revenue Service or other federal agency names wrong.
Use incorrect grammar or odd phrasing.
Use a really long Internet address in any link contained in the e-mail message or one that does not start with the actual IRS Web site address (www.irs.gov).

Note: To see the actual link address, or url, move the mouse over the link included in the text of the e-mail. ”

Suspicious eMails (Phishing)

Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet scamsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity.

Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund or other financial reward.

The Internal Revenue Service reminds consumers to avoid identity theft scams that use the IRS name, logo or Web site in an attempt to convince taxpayers that the scam is a genuine communication from the IRS. Scammers may use other federal agency names, such as the U.S. Department of the Treasury.

In an identity theft scam, a fraudster, often posing as a trusted government, financial or business institution or official, tries to trick a victim into revealing personal and financial information, such as credit card numbers and passwords, bank account numbers and passwords, Social Security numbers, telephone numbers and more. Generally, identity thieves use someone’s personal data to steal his or her financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns (for the refunds).

Refund Scam

The bogus e-mail, which claims to come from the IRS, tells the recipient that he or she is eligible to receive a tax refund for a given amount. It instructs the recipient to click on a link contained in the e-mail to access and complete a form for the refund.

The form requires the entry of personal and financial information. The refund scam is the most common one seen by the IRS. Several recent variations on this scam have claimed to come from the Exempt Organizations area of the IRS. Some others have included the name and purported signature of a genuine or a made-up IRS executive.

Taxpayers do not have to complete a special form to obtain a refund. Taxpayer refunds are based on the tax return they submit to the IRS.

The IRS does not discuss tax account matters with taxpayers by e-mail.

The IRS also urges consumers to avoid falling for the following recent schemes:

Making Work Pay Refund

This phishing e-mail, which claims to come from the IRS, references the president and the Making Work Pay provision of the 2009 economic recovery law. It says that there is a refundable credit available to workers, consumers and retirees that can be paid into the recipient’s bank account IF the recipient registers their account information with the IRS. The e-mail contains links to register the account and to claim the tax refund.

In reality, most taxpayers receive their Making Work Pay tax credit, which was designed for wage earners placed in their paychecks as a result of decreased tax withholding, not as a lump sum distribution from a federal fund. Consumers and retirees who are not wage earners are not eligible for this tax credit.

Lottery Winnings , Inherited Funds and other Cash Consignments

In this phishing scheme, recipients receive an e-mail claiming to come from the U.S. Department of the Treasury notifying them that they will receive millions of dollars in recovered funds or lottery winnings or cash consignment IF they provide certain personal information, including phone numbers, via return e-mail. The e-mail may be just the first step in a multi-step scheme, in which the victim is later contacted by telephone or further e-mail and instructed to deposit taxes on the funds or winnings before they can receive any of it.

Or, they may be sent a phony check of the funds or winnings and told to deposit it BUT also pay 10 percent in taxes or fees. Thinking that the check must have cleared the bank and is genuine the victims pay the fees to the scammers, then receive notification and many more fees from their bank when the check is discovered to be fraudulent.

Form W-8BEN

In this scam, fraudsters modify a genuine IRS form, the W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to request detailed personal and financial information.

This could include nationality, passport number, bank account and PIN numbers, spouse’s name and mother’s maiden name, or other personal or financial information or security measures for their financial accounts. The scammers may use the genuine form number and name or may make up a new form number, such as W-4100B2.

They either e-mail or fax the form or letter. If only a letter, the letter itself contains the request for the personal and financial information. The letter, which claims to come from the IRS, states threatens the recipient with additional taxes unless he or she quickly faxes the required information to the number provided by the scammer.

In reality, taxpayers file the genuine Form W-8BEN with their financial institutions, not with the IRS. Additionally, the genuine W-8BEN does not request the taxpayer’s passport number, bank account number, security or similar information.

In closing, we must remember that email is like sending a postcard through the mail. All along the way, unsecured email passes through computer servers where they may be stopped and read. Think about personal information you would put on a postcard.

Even providing telephone numbers is dangerous, because some scammers are able to bill your personal telephone bill with their illegal charges.

http://www.irs.gov/newsroom/article/0,,id=155682,00.html