We consumers now have a few more credit protections than we did before, but to get the Act passed, Congress had to water down the wording somewhat.  It would not do to pass a law that would put many of Congress’s biggest campaign contributors out of business. So, there are still a few areas left for issuers to extract profits. 

Students

Before this law went into effect, students were sent credit cards that they ran up like free money while the parents got stuck with the bills, since they were under age.  Now, students under 21 years of age cannot qualify for a card without a co-signer.  How will the issuer know the applicant is a student?  They will likely only have income from summer employment.  The real qualifiers are the applicant’s age, and their income. 

Interest Rate Hikes

The new law does not protect consumers against interest rate increases.  It does protect them against increases on existing balances, but as long as the card issuer notifies the consumer at least 45 days in advance, interest on new purchases can jump considerably. 

This is supposed to give the consumer the option of jumping to another card for new purchases.  The consumer has three billing cycles to decline the new terms, close the account to future purchases, and pay off their balance at the old rate and payment schedule. 

Payment Allocation

If you have separate interest rates in force for old balances and new purchases, be aware that the CARD Act requires the card issuer to apply the minimum payment amount to the greater balance, which most likely has the lower interest rate. 

The CARD Act requires payments to be applied to the highest-rate debt on the account, so watch carefully that any payments exceeding the minimum payment are “accidentally” applied to the lower rate balance.    

Universal Default

Under the old shell game, issuers could raise a consumer’s interest rate if they were late on a totally unrelated account, like a utility bill.  This is now prohibited under the new law. 

But card issuer’s legal wizards have left some language in some offers that will activate a penalty APR.  Some of the reasons are exceeding credit lines, credit report information, and bounced or late payments.  Some catch-all language might be “market conditions”, or “at any time for any reason.” 

Read the small print. 

Penalty Rate

If a consumer is more than 60 days late on a payment, the card issuer can initiate a penalty rate, which averages nationwide slightly less than 30 percent.   That means for every thousand dollars that remains on your credit card by the end of the year, you will owe another $300 in interest, or nearly an additional one-third of your balance.  This is the way card issuers generate cash flow and keep consumers imprisoned in their cycle of debt. 

The new law provides a way back down the interest ladder.  It is meant to require the credit issuer to return the customer to their previous interest rate after six consecutive months of timely payments.  In reality, the law states that the card issuer is “supposed to” review and reduce a cardholder’s rate after six months of consecutive on-time payments. 

The law also states that this review must include market conditions (what others are charging) and the creditworthiness of the card holder.  This gives the card issuer an out if you caught up on the penalty account but your other accounts are still behind. 

Another method card issuers have been known to use is a technique known as “pigeonholing” where your payment arrives on time, and due to the card issuer’s workload, it is not posted until after the due date.  Remember one late payment will result in a lot more income for at least six months for the card issuer while you straighten things out. 

It is more important than ever to keep records of the exact dates payments are made.  Sending a check in the mail has no basis for verifying the date it was received, since the card issuer will discard the envelope with the postmark proof as quickly as possible, and the date on a check can be any date. 

Paying a bill by electronic banking will issue recordable dates of payment receipt.  Remember that many banks still issue a bank check that is mailed, and the process can take up to four days until the check is in the mail.  Be sure to add the four days plus a comfortable mail delivery time for your payment to be received.

The language of the new law is loosely worded.  Expect some creative moves when it comes to the card issuer backing off penalty rates.

Mail Notification

The highest court has judged that putting a notice in the U.S. Mail is proof of delivery, whether or not the addressee receives it. 

The new CARD Act requires payments to be accepted as timely when paid before 5pm EST on the due date or mailed at least 7 days before the due date. 

That concept seems to work fine for businesses that say they notified you, but doesn’t work that well for consumers mailing payments. 

Discontinued Cards

The 45-day rule will “probably” apply if the card issuer decides to discontinue your card.  The law is not clear about this circumstance, but issuers will most likely notify the consumer 45 days ahead to avoid running afoul of the law.  That’s good news for a consumer standing at a register with a big purchase.   

Added Fees

Credit card issuers have lost a bundle of expected revenue with this new law.  Estimates put the loss at around $12 billion per year.  It comes at a time when banks are already in bad shape because of the housing market, double the number of defaults from unemployed workers and others, and consumers cleaning up their balances. 

It is predictable that inventive fees not mentioned in the new law will surface.  There are countless fees that can be added to your bill, and interest rates can soar, if everyone in the credit market does the same and they notify you 45 days ahead. 

Although the prime rate for banks is low now, as it cycles upward, consumers can expect 45-day notices from their fixed-rate card issuer that they will be switched to a variable rate, tied to the prime rate.  Variable rates rise and fall with the economy and will not require the 45-day notice as the prime rate climbs. 

Be careful of ordering merchandise online.  If the merchandise comes from a foreign retailer or American territories, you can incur foreign transaction fees, even if the merchant allows you to pay in U.S. currency. 

Fee Avoidance

Be your own consumer advocate.  Consolidate your credit to one or two widely accepted cards with the lowest interest rate (beware of the balance transfer fee).  Join a credit union (lower interest rates).  Drop annual fee cards.  If you want to keep some cards, reduce your credit used to below 10 percent of your available credit to preserve your credit score.  For cards with inactivity fees, swipe them at a convenience store once a year (check the inactivity period).  If one of your issuers offers a rewards program, take the cash-back option. 

Pay your bills on time.  Read the fine print.  Read each piece of mail from your card issuers.  Stand up for your rights.  Play hardball.  Speak to supervisors.  Threaten to take your business elsewhere if they don’t retract an unjust fee, and do it if they don’t (I also like emails to the president or CEO,  factually detailing why you left).

The CARD Act was a big step in the right direction, but there will always be loopholes discovered by highly-paid legal eagles working against you.

The vote was 13-6 with Senator Lindsey Graham (R-SC) breaking party ranks to vote approval.  Senator Graham explained his approval vote:

“What’s in Elena Kagan’s heart is that of a good person who adopts a philosophy I disagree with,” Graham said. “She will serve this nation honorably, and it would not have been someone I would have chosen, but the person who did choose, President Obama, I think chose wisely.”

Elena Kagan has served as Obama’s Solicitor General, the highest-ranking trial lawyer in the country.    She has had limited courtroom experience, but her greatest attributes were noted in an open endorsement letter from sixty-nine deans of law schools and includes an “understanding of both doctrine and policy” as well as her written record of legal analysis. 

Kagan will be the third female associate justice currently serving on the Supreme Court and would be the first associate justice since 1972 without any prior bench time as a judge.  The last justice with that experience record was William Rehnquist, who rose to spend 19 years as Chief Justice and administered the oath of office to three separate presidents (two of them twice).

Republicans fear that Kagan will put her political views and her liberal agenda ahead of the law.  Senator Orrin Hatch (R-UT) said, “Ms. Kagan’s record shows that she supports an activist judicial philosophy, and that her personal and political views drive her legal views.”

Republicans were swift to declare their opposition to Kagan, more than they were with last year’s Supreme Court nominee, Sonia Sotomayor.  It comes at a time when November elections are drawing focus, and Republicans are working to polarize themselves from Democratic actions. 

Conservative political groups pressured Republican senators to oppose Kagan’s nomination. The National Rifle Association (NRA) urged their campaign beneficiaries to vote “no” or stage a filibuster to block Kagan outright and threatened to downgrade contributions to Kagan supporters.  This results from her time when she tried to block military recruiters from campus as Dean of the Harvard Law School. 

Senator Graham was the only Republican to publicly announce he would vote to approve, although four other Republicans joined him crossing the party line for the full confirmation vote.  Other than those few, Republicans marched in lock step to their party’s orders. 

Graham’s decision to support Obama’s Supreme Court nominee makes it increasingly likely he will face a primary challenge by his own party when he’s up for re-election in 2014.  South Carolina political gurus say the Senator’s support for Kagan “ensures he will face a serious primary challenge”

“It’s a tough political environment out there,” stated Graham. 

It is indeed tough when Members of Congress are more interested in their own reelection than voting what’s best for the people who elected them, and blindly obeying orders to receive support in their next election. 

~~~~~

On August 5, 2010, on the eve of the Congressional vacation, 36 GOP Senators and one Democrat — Senator Ben Nelson of Nebraska – voted against the Supreme Court confirmation of Elena Kagan.  Aside from the lockstep robot Republicans, five broke ranks to vote confirmation — Senators Susan Collins and Olympia Snowe of Maine, Lindsey Graham of South Carolina, Richard Lugar of Indiana and Judd Gregg of New Hampshire.

Republican opponents spouted lame excuses for their ‘nay’ vote, like her opposition to military recruiters on the Harvard campus (when they were allowed access everywhere else), her opinion in a single case in her legal history, and her lack of courtroom experience as a judge. 

The major reason shared by all who opposed her seemed to be the fear that she will use her own judgement in deciding issues.  Those opponents need to read the U.S. Constitution; interpretation is why we have a Supreme Court. 

They really fear that she will put her politics ahead of the law and be a rubber stamp for Obama’s agenda. 

~~~~~

Similar treatment was given to Supreme Court nominee Sonia Sotomayor.  She was only the second jurist to be nominated to three different judicial positions by three different presidents but was still voted against by Republicans. 

See: Republicans against Obama nominee Sonia Sotomayor

The legislation provides $10 billion to state school districts, to rehire and save 300,000 state employee jobs, more than half of them (160,000) teaching jobs. 

The remaining $16 billion will help states pay their share of Medicaid, public health for the very poor.  State budgets have been decimated during this recession as Medicaid costs have soared. 

Analysts say the latest cash infusion is essential to preserving the fragile economic recovery.  The last thing our current economy needs is more people out of work.

States are experiencing the largest revenue drop that they’ve ever faced.  This rescue package contains funds that must be spent rehiring teachers and sustaining state payrolls. 

This funding is fully paid for from closing a business tax loophole and will not add to the federal deficit.  As reported by the nonpartisan Congressional Budget Office, it will actually lower the deficit over the next 10 years.

The Senate approved this critical funding by a vote of 61-39 on August 5, 2010, with only two Republicans (Senators Olympia Snowe and Susan Collins, both of Maine) breaking with party orders to vote in favor of saving teacher jobs.

Considering the impending school year start, Nancy Pelosi,(D-CA) Speaker of the House of Representatives, called House members back from their August recess to vote on the measures approved by the Senate. The bill passed 247-161 on August 10, 2010, with only two Republicans (Michel Castle (R-DE) and Anh Cao (R-LA)) in favor of saving teacher jobs.

The fast track passing of this bill will allow the U.S. Department of Education to begin distributing this funding to the states’ governors by September using a formula based on population.

A chart was created by The Center for Budget Policy and Priority showing the funding each state is expected to receive for both education stabilization and Federal Medical Assistance Percentage (FMAP) for Medicaid.

Republicans are not happy about the federal funding.  Some governors are reluctant to accept the money because federal conditions stipulate using the funding for education only and they want the money for other programs.  

Wisconsin Democratic Governor Jim Doyle, welcomed the stimulus money to his state to handle the urgent needs states and residents have right now.  “We cannot ask a second-grader to come back and complete their studies five years from now when the economy has turned around,” … “The education we provide now will be the strength of our state and nation for decades to come.”

Employment Situation:

Total nonfarm payroll employment declined by 131,000 workers in July, reflecting a decrease of 143,000 temporary employees in the Census 2010 segment as the project comes to an end. 

–Private sector employment +71,000 (+750,000 since the start of 2010). 

–The unemployment rate remained the same at 9.5 percent.

In future months, the unemployment numbers will be more accurate, rather than be skewed by the large number of temporary workers conducting the census for the government.  Depressing headlines shout that payroll employment decreased by 131,000 workers, when that number is less than the temporary government workers who finished their assignments this month, yielding a small net increase. 

In truth, unemployment has stopped rising and is holding steady for the third consecutive month as seen without the influence of the large scale hiring and termination of the Census staff.  

Employment status:

The Civilian labor force represents employed and unemployed workers. 

–Current: 153.5 million; down 181,000 from last month; one year ago: 154.3 million. 

–Employed workers — current: 139.0 million; one year ago: 139.8 million.

–Unemployed workers — current: 14.6 million (9.5%); one year ago: 14.5 million (9.4%).

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

The Civilian labor force has remained steady 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 12.3 million looking for jobs along with 1.6 million college graduates recently joining the Civilian labor force. 

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.

Household Survey Data

Nonfarm payroll employment decreased by 131,000 in July (reflecting a decrease of 143,000 temporary Census workers [net +71,000]) after a big decrease in June (-125,000 including a decrease of 225,000 temporary Census workers [net +83,000]), 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).  

The quarterly average nonfarm payroll job data has been improving over the last nine months with three-month averages at: May through July 2010 (+59,000), February through April 2010 (+186,667), and November through January 2009 (-10,333). 

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was 8.5 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 fallen to 34.2 weeks.  A year ago it was 25.3 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 6.57 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%) unemployed persons are in this category. 

Establishment Survey Data

Construction lost 11,000 jobs in July. Previous month changes were June (-21,000), May (-29,000 [revised]), April (+22,000 [revised]), March (+26,000 [revised]), February (-64,000), January (-77,000), December (-32,000) and November (-15,000).

The quarterly average construction job data has not been improving with three-month averages at: May through July 2010 (-20,333), February through April 2010 (-5,333) and November through January 2009 (-41,333). 

Currently, there are 5.57 million construction jobs. A year ago, there were 5.95 million.  In December 2007, there were 7.39 million.   

Manufacturing gained 36,000 jobs in July.  Previous month changes were June (+13,000), May (+39,000), April (+38,000), March (+17,000), February (+1,000), January (+20,000), December (-23,000) and November (-25,000).  

The quarterly average manufacturing job data has been improving steadily over the last nine months with three-month averages at: May through July 2010 (+29,333), February through April 2010 (+18,667) and November through January 2009 (-9,333). 

Currently, there are 11.72 million manufacturing jobs. A year ago, there were 11.74 million.  In December 2007, there were 13.73 million. 

Retail trade gained 6,700 jobs in July.  Previous month changes were June (-20,500 [revised]), May (-5,800 [revised]), April (+14,400), March (+22,800), February (+7,100), January (+49,100), December (-14,500) and November (+8,800). 

The quarterly average retail job data has been relatively steady over the last nine months with three-month averages at: May through July 2010 (-6,533), February through April 2010 (+14,767) and November through January 2009 (-14,467). 

Currently, there are 14.43 million retail trade jobs. A year ago, there were 14.49 million.  In December 2007, there were 15.566 million.   

Professional Business Services lost 13,000 jobs in July.  Previous month changes were June (+23,000 [revised]), May (+26,000), April (+70,000), March (+1,000), February (+56,000), January (+23,000), December (+22,000) and November (+106,000). 

The quarterly professional business services job data has been slowly improving over the last nine months with three-month averages at: May through July 2010 (+12,000), February through April 2010 (+42,333) and November through January 2009 (+50,333). 

Currently, there are 16.67 million professional business services jobs. A year ago there were 16.41 million.  In December 2007, there were 18.1 million.  This is one of the currently largest job growth fields.

Temporary help services lost 5,600 jobs in July, but gained 11,200 in June and gained 30,400 in May. 

Currently, there are 2.09 million temporary help services jobs.  A year ago, there were 1.75 million.  In December 2007, there were 2.6 million.     

Education and Health Services gained 30,000 jobs in June.  Previous month changes were June (+26,000), May (+25,000), April (+28,000), March (+45,000), February (+32,000), January (+16,000), December (+26,000) and November (+31,000).   

The quarterly average education and health services job data has been improving steadily over the last nine months with three-month averages at: May through July 2010 (+27,000), February through April 2010 (+35,000) and November through January 2009 (+24,333). 

Currently, there are 19.56 million education and health services jobs. A year ago, there were 19.19 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) 202,000 jobs in July.  Of the jobs ended by the federal government, 143,000 were temporary jobs for the U.S. Census.  The Census 2010 jobs lasted through mid-July. 

Previous month changes were June (net -252,000 [revised]), May (net+381,000), April (+72,000), March (+50,000), February (-23,000), January (-2,000), December (-26,000) and November (-11,000).   

The quarterly average government employment (federal, state and local) jobs have been steady over the last nine months with three-month averages at: May through July 2010 (-24,333), February through April 2010 (+33,000) and November through January 2009 (-13,000). 

All government (federal, state, local, U.S. Postal Service): Currently, there are 22.505 million jobs. A year ago, there were 22.516 million.  In December 2007, there were 22.377 million. 

Federal government (except U.S. Postal Service): Currently, there are 2.37 million jobs. A year ago there were 2.11 million.  In December 2007, there were 1.974 million.   

U.S. Postal Service: Currently, there are 648,600 jobs.  A year ago, there were 701,700.  In December 2007, there were 781,300.   

State governments education: Currently, there are 2.375 million jobs. A year ago, there were 2.352 million.  In December 2007, there were 2.327 million.   

State governments (excluding education): Currently, there are 2.758 million jobs. A year ago, there were 2.802 million.  In December 2007, there were 2.813 million.   

Local governments education: Currently, there are 7.98 million jobs. A year ago, there were 8.049 million.  In December 2007, there were 8.053 million.   

Local governments (excluding education): Currently, there are 6.374 million jobs. A year ago, there were 6.498 million.  In December 2007, there were 6.429 million. 

The good news from this data is that overall, the job market is steady.  Now let’s build. 

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 Adult women (7.9%), followed up by Asians (8.2%), Whites then Adult men (9.7%). 

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 July held at $19.04 with weekly earnings at $637.84. 

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 153.5 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 139.0 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 153.5 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 12.3 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 153.5 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: 

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 July 27, 2010, of the
$344,095,493,732 announced,
$421,477,195,339 (122.5%) has been made available
$268,372,814,961 (78.0%) 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.

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 

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).

Obama’s alienation of independents and white voters, along with the gap between the right and the left, means that it is possible that Republicans not only may pick up many seats, but also even regain control of Congress.

Washington strategists are focusing on how the president can make a political comeback in 2012, abandoning the 2010 elections to fate.  The White House has different ideas, with a strategy to win or minimize the damage in 2010. 

Even though Senator Scott Brown has proven himself a Republican independent, breaking ranks with his party to pass important legislation for the good of the country, he is still in the Republican caucus. 

Brown was elected by a landslide in the special election to complete the term of Democratic Senator Ted Kennedy, an office he held for nearly 47 years.  His campaign announcement said that the state “needs an independent thinker” and the anti-Obama, anti-incumbent sentiment carried him to office. 

It was a wake-up call for Democrats. 

The stakes

In November, there are 36 Senate seats and all 435 House seats up for reelection.  Democrats need to capture 39 additional seats to regain control of the House and one additional seat for the Senate.  The key states focused on for Senate races by Republicans are:

• Connecticut (Senator Christopher Dodd – Dem)
• Delaware (seat formerly held by Vice president Joe Biden – Dem)
• Illinois (Rod Blagojevich’s appointee Roland Burris is retiring – Dem)
• Massachusetts (Scott Brown – Rep)
• Nevada (Senate Majority Leader Harry Reid –Dem)
• New York (seat formerly held by Secretary of State Hillary Clinton – Dem)
• Pennsylvania (Senator Arlen Specter – Dem – lost primary).

Loss of all those Senate seats would reduce the upper house to a near tie vote on every piece of legislation, and considering the infighting and hostility between parties now, there may very well be nothing accomplished until 2012 ends.  This would play into Republican hands who would like nothing more than to campaign against a president who accomplished nothing in the last two years of his first term.  

The strategy

The Democrats plan a two-part strategy that includes softening sentiments against Washington, the Democratic side of Congress, and the president. 

Part One

First, Democrats can be expected to intensify the accomplishments of the Patient Protection and Affordable Care Act (health care reform), and the American Recovery and Reinvestment Act (economic stimulus), as well as the Credit CARD Act of 2009 and the Dodd-Frank Wall Street Reform and Consumer Protection Act (financial reform). 

This will be to demonstrate that Democrats can accomplish positive things for the American middle class in spite of bloc voting to defeat all actions.  Voters are upset, however, on the health care provision that requires everyone to have health care by 2014 or face penalties. 

Democrats might be advised to address modifying that portion of the health care bill. 

Obama disappointed his anti-war support base, when he lengthened troop withdrawal from 16 months in campaign promises to 19 months after he took office and backloaded his campaign promise of withdrawing one to two brigades per month. 

The president has now officially committed to ending our military involvement in Iraq by August 31, 2010, removing all U.S. combat troops.  Of course, 50,000 troops will still remain to train and advise Iraqi security and conduct counter terrorism operations.  Those troops will be likely at times to engage in fighting at the request of Iraqi commanders, but all troops will be out of Iraq by the end of 2011. 

Democrats are also looking to regather environmentalists with the president’s push to replace our black economy (fossil fuels) with a green economy (renewable energy sources). 

They will highlight to environmentalists the strong (if not somewhat tardy) handling of the Gulf oil spill with the promise of restoring the Gulf environment, backed by the $20 billion escrowed by BP.  The passage of the H.R. 4213 bill, extending unemployment benefits, also increased the tax on oil to 34 cents per barrel to fund against future spills (H.R. 4213 (p286) Title IV: Subtitle D – Sec. 431). 

That bill, however, does not address a federal law that caps corporate liability at $75 million for economic damages beyond direct cleanup costs. Democratic Senators tried to pass a bill that would have increased the cap to $10 billion, but Republicans blocked them.

There are certainly items the Republicans can snipe at, like accusing Democrats of tax-and-spend, while they support lower taxes for all – with no responsibility for any of it, unless they are trapped into talking about their history of running up the deficit when they held the power. 

Republicans have established a glaring very public record of voting as a bloc against every major proposal, including equal pay for all and the extension of unemployment benefits for the millions of workers without jobs. 

Recently, Obama was the first sitting president to appear on a daytime talk show.  The president needs more appearances on The View and other daytime shows with large homemaker followings who can influence their family members to see him as a regular family man with a tough job.

Part Two

The second part of the Democratic strategy involves recruiting strong candidates for open Congressional and Senate seats, while playing up the divisions between the Tea Party and the traditional Republicans.  This is meant to split the Republican electorate and increase the chances of less electable candidates edging out strong moderates.  Then extensively research the candidates to help moderate voters reject them – just politics as normal.

It also involves using the White House and strong Congressional members to raise more campaign funds than the opposition. And the final step is to coordinate with Democratic allies like environmentalists and labor unions to mount a get-out-and-vote effort for young, first-time, and non-white voters.  These are the people who swept Obama into office. 

The opposition

Republicans believe that concern over the lack of jobs and resentment over the big-spending ways of the Administration will prevail in voting preferences over the merits of the stimulus and economic recovery, as well as health care and financial regulation reform.

They will trash the health care bill and the compulsory coverage, saying they will, if elected, repeal the bill, start over and do it right.  

Republicans will talk about coming tax increases and how they will hold or reduce taxes to put more money in voters’ pockets, allowing small businesses to create jobs.  They will try to kidnap the platform of change. 

Issues afloat

One significant item the Congress must deal with is the tax cuts implemented by President Bush that are due to expire at the end of 2010.  Read What to Expect if the Bush tax cuts expire. 

Democrats have already planned to extend some of the tax cuts, but are planning to let them expire for citizens with incomes over $250,000, saying they are the rich and their income that would go to taxes would not stimulate the economy anyway.  It will save $67.5 billion per year from being added to the deficit. 

What Democrats are missing is that voters who make above $250,000 see themselves as the upper middle class who would spend their disposable income in ways to stimulate the economy.  Drawing an arbitrary income line will drive those above it to the other camp.

If Democrats voted an extension of the Bush tax cuts for all, even short term, they could defuse the Republican election rhetoric that Democrats will raise taxes for Americans.  If they were really shrewd, they would also lower other taxes like the corporate income tax from 35 percent to the 23.5 percent par level with Europe. 

The Deficit

An issue separating Congress and American voters is the size of the deficit.  It is a subject that may, along with unemployment, sway elections to challengers. 

Many Members of Congress and voters misunderstand the role federal deficits play in managing the economy.  Major economists have taken the position that federal deficits are an integral part of a global economy based on trade deficits and dollar reserves.   Congress has yet to realize there is no advantage in being too “fiscally responsible.”

Let Republicans talk about balancing the budget and keeping taxes low.  They will have to avoid being trapped into talking about their own history of running up the deficit when they held the power.  Perhaps Dick Cheney was right – deficits don’t matter. 

Primary scorecard

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.

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.”   

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.

Since October 2006, new and renewed passports come with a noticeably thicker cover, which houses an identity chip containing all the passport information and a digital map of the owner’s photograph, which shows up on the customs agent screen when the passport is swiped. 

Blame it on security and the fact the U.S. Department of State issues more than 15 million passports per year.  

On July 13, 2010, U.S. passport fees will increase by 35 percent, from $100 for adults to $135, and from $85 to $105 for minors.  Renewals will jump the same $35, from $75 to $110 for adults. 

The standard passport comes with 24 pages. An additional 28 visa pages can be ordered with new passports and those with less than 2-4 visa pages left blank without cost. 

As a note, skilled workers who must disassemble the passport and reconstruct it add the extra pages by hand.

Expedited delivery goes from $60 to $85.   

An international symbol adorns the cover to alert border personnel that it is a digital passport. 

A new passport must be requested if the passport was lost, issued more than 15 years ago, or issued when the holder was under 16 years of age. 

A less expensive alternative exists for those who only travel from the U.S. to Canada, Mexico, the Caribbean and Bermuda at sea ports-of-call or land crossings.  Passport cards are issued for $55 for adults and $40 for children. 

The U.S. Passport Book and U.S. Passport Card for adults are valid for ten years. Passports for minors under age 16 are valid for five years.

The U.S. Passport is not just used for travel anymore. It serves as proof of U.S. citizenship and identity for important purposes such as work authorization and eligibility for many Federal benefits.

Applying for a passport or passport card requires passport photos in usual street dress, with undarkened glasses if the requestor normally wears glasses; primary proof of citizenship (certified originals required, which are returned), primary identification when applying in person as well as a photocopy of both sides of the identification, the DS-11 form, and of course, the fee. 

Particulars can be found on this web site: http://travel.state.gov/passport/passport_1738.html

Many U.S. Post Offices have passport windows to accept passport applications.

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:

(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: 

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 

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).