Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Scary Reasons Not to Get Giddy over the Monthly Jobs Reports


News reports on unemployment claims haven’t only misleading, they’re dangerously ill-omened. They fail to report what’s really happening.



Curiously, the news media conveys optimistic stories, and Wall Street investors and others are jubilant over the 4.9 percent unemployment rate that was alleged by the government in Feb. 2016.

Why? Countless Americans can’t find family wage jobs. But misleading news headlines trumpeted the meager creation of jobs instead of the sad reasons for the mediocre report.

All day long, news-media companies supplied misleading video reports to the Biz Coach portal’s Business video page. But the philosophy here is not to censor reports — even if they are misleading by not telling the complete story.

Economic Downturn
                                                                                                                       Economic Downturn by Petr Kratochvil

No one appears motivated to dig deep enough. As a credentialed journalist, I’m also a business-performance consultant. I remain skeptical about the federal government’s policies because I experience firsthand the trials and tribulations of entrepreneurs and their Main Street customers.

Under-reported issues

Month after month, it’s forecast the average American workweek will remain less than 35  hours (see the Economic Forecasts page).

The big-ticket sellers who need adequate numbers of credit-worthy customers in order to be profitable are finding it a big challenge. Actually, the negative trend was well underway at least a year before the National Bureau of Economic Research’s official declaration of the recession.

“We hope that you are enjoying having your children graduate from college and come home to live in your basements.”

-Lewis Woodhill

Red flags were everywhere — from auto dealers launching bad-credit sales departments — to the skyrocketing student-loan defaults and complaints about Sallie Mae’s questionable practices. More than 35 percent of American consumers are past due on their bills must cope with debt collectors.

Seemingly, everyone involved in Main Street business was deeply challenged, and remains a reason why this portal has more than 150 public-policy articles and an Op Ed Economic Analysis page that explain the issues.

But you don’t have to be a business consultant to understand the problems and solutions. For example, the accurate big picture about the economy and jobs was exposed in an article on RealClearPolitics. Citing government data, it was authored by Louis Woodhill — a successful engineer, software entrepreneur, and a Forbes contributor.

He points out the “BLS Establishment Survey, which reported that 165,000 payroll jobs had been created during April 2013, the Household Survey” numbers told a much different story.

Realistically, nothing has improved.

Too-few family wage jobs

Mr. Woodhill wrote: “Total employment rose by 293,000 during April, but part-time jobs increased by 441,000. As a result, full-time jobs declined by 148,000.”

He further stated the number of full-time jobs only increased by 73,000. That, of course, means this “was not enough to keep pace with the growth of our working-age population, so the ‘FTE jobs ratio’ (the number of FTE jobs per 100 working-age Americans), fell according to Mr. Woodhill.

This gives us threatening information about the nation’s recovery.

“The April jobs numbers describe a mass replacement of full-time workers with part-time employees, coupled with a fall in the length of the average workweek,” he wrote. “This happens to be precisely what you would expect, given the perverse incentives baked into Obamacare, which took effect on January 1.”

More bad indicators

“During April, the FTE jobs ratio fell for the fifth month in a row, to 53.09,” he warned. “The earliest warning signal for every recession since 1955 (the first year for which the data is available) has been a significant, sustained decline in this ratio.”

He provided a history lesson:

“As of April, the fall in the FTE jobs ratio from its local peak was only 0.11,” he conceded. “This is not yet a strong indicator of an impending recession. Only one of the recessions since 1955 (that of 1970) was presaged by this mild a decline, and there were eight instances during the past 50 years where the FTE jobs ratio declined by this much over five months, and the economy did not fall into recession.”

Excerpts of his red flags:

“This having been said, there also has never been a case where the FTE jobs ratio fell for five months in a row and a recession did not follow. So the recent decline is definitely something to be concerned about.

“Based upon the historical record, if the current decline in the FTE jobs ratio were to continue, and to reach a cumulative 0.60, renewed recession would become a virtual certainty.

“In the case of the most recent recession, the decline in the FTE jobs ratio exceeded 0.60 five months before the recession officially started, and a full 15 months before the National Bureau of Economic Research (NBER) formally declared that a recession had begun in January 2008.”

Comparison of monetary policies

“It is now 76 months since our latest employment recession started. America’s FTE jobs ratio is still down by 5.10 from its peak, and is only 0.56 above its low point of the cycle,” he reminds us. “In contrast, at the same point during the Reagan recovery, the FTE jobs ratio was 2.01 above its prior high, having risen by 4.80 from its nadir.

“During the first 76 months of the Reagan recession/recovery, the value of the dollar in terms of gold actually went up by 6.47%. During the equivalent period during the Bush 43-Obama recession/recovery, the gold value of the dollar fell by 56.90%.”

It’s a long commentary. He further explains the above points, the fallacies of the Federal Reserve’s continuous money-printing policy, and more. All of which slow down the nation’s economic recovery and the creation of jobs.

Do yourself a favor and read his full analysis here.

From the Coach’s Corner, editor’s picks for related reading:

“We hope that you are enjoying having your children graduate from college and come home to live in your basements.”

-Lewis Woodhill

__________

Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.