Good News/Bad News on Jobs

U.S. unemployment declined to 8.6 percent last month, the lowest level in more than two years, according to the Labor Department. That's worth a glass of champagne for those of us (everyone) exhausted by negative economic news.

However, some economists warn we shouldn't get carried away with ourselves.

For instance, Mark Zandi, chief economist for Moody's Analytics, told Bloomberg that a major factor in the decline was a drop in workforce participation to 64 percent. Calculating in that factor, unemployment is really at about 11 percent, he said. In addition, underemployment is about 15.6 percent.

But, while the improvement seems soft, the trend is up and the experts say that reduces the chance of another plunge into recession.

That alone might be worth a second glass of champagne.

Street Economics 4Q 09

What happened to 3Q? I pulled the covers over my head as soon as people started saying “jobless recovery” with a straight face. Rest of the year? I’ve got lots of blankets and comforters to protect me.

A consumer-driven economy relies on consumer spending which doesn't exist without income of some sort.

Got it?

Thank you.

Street Economics Q4 - The Winners

The economy smells like tuna salad left too long in the sun. But a number of people and industries will profit from the downturn.

Some of them are visible and will become icons of hatred for all us regular folks. Right now the No. 1 voodoo doll is Robert Fuld, CEO of bankrupt Lehman Brothers, who, along with a couple of cronies, was anointed with a $20 million severance package.

But there are others that not only will survive, but prosper during the big slide while folks like us count our loose change before going to the grocery store. Some of the less-obvious winners:

Brewers -- There is a direct correlation between economic health and beer sales. When times get tough, people stop buying from Mr. Curvoisier and start buying from Messrs. Busch and Miller.

The Military -- As low-end jobs disappear, military recruitment will become easier. Yes, enlistees might get shot at, but free housing, medical care, food and clothing will make the risk more acceptable.

Birth Control Makers -- The U.S. birth rate dropped 15 percent during the Great Depression.

Retail Brokerages - They charge fees when you buy. They charge fees when you sell. Some of them charge fees when you don't do anything.

The Sex Trade -- As a professional analyst would put it, "Anticipated increases in competition will exert downward pressure on pricing. However, demand will remain at historically high levels. Therefore, we believe marketing and quality of service will be the keys to success for this industry in the near- and mid-term."

Economists Drive AMC Gremlins

"The speech also came the same morning the Labor Department reported. . . . inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly."
-- Associated Press

Bad Times Ahead In 2008

Based on my Sreet Economics Index, 2008 is looking as dark as Dick Cheney's soul. The evidence -- all of it true:

• My house cleaner came into an inheritance but still shows up every week.
• The Popov Vodka bottles at A-1 Liquor are dusty.
• Panhandlers are asking for quarters again.
• My eHow article "How to Prepare For Being Fired" got 82 hits in three days.
• I wrote it for $15.

Better Stuff Sold At Better Prices

DETROIT, Aug. 1 — Detroit auto companies lost their leadership of the American car market for the first time ever in July, when import nameplates outsold the three American companies in a dismal month for auto sales.
-- New York Times

Where's My Raise?

Those who drink alcohol earn 10 percent to 14 percent more at their jobs than nondrinkers, according to a Reason Foundation report by economists Bethany Peters and Edward Stringham. “Social drinking builds social capital,” said Stringham, a San Jose State University economics professor. “Social drinkers are networking, building relationships and adding contacts to their BlackBerries that result in bigger paychecks.”

Men who drink earn 10 percent more than those who don’t, and women drinkers earn 14 percent more than nondrinkers. Men who visit bars at least once per month see an income boost of 7 percent; however, the same is not true for women, according to the study.

-- Staffing Industry Report, Nov. 10, 2006