Jobs Report Not Good News
This past Friday, Sept. 7, the August jobs report was released by the U.S. Bureau of Labor Statistics. According to the report, total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent. Specific employment increases were in food services and drinking places, in professional and technical services, and in health care.
Almost automatically, proponents of the Obama administration as well as political pundits touted this as good news and as being proof of the effectiveness of the President’s economic policy. Unfortunately, few if any political talking heads discussed this in reference to the general citizenry of America or offer that the aforementioned may not be the case.
If one actually takes the time to read the report and do some basic math, they would see that for the average American, the data does not provide such a rosy picture. First, 119,000 fewer persons were employed in August compared to the month of July and manufacturing employment edged down in August by 15,000 jobs.
Approximately 89 million people in America are unemployed, and the value of the dollar has started to retract according to Forex markets.
Job loss will continue to be a problem for whoever is in the White House. In particular with the strange policies of the Federal Reserve. Bernanke knew in 1988 that quantitative easing was ineffective because bank lending channels typically close if banks have access to external sources of funding — other people’s money. Yet, Bernanke and the present administration continue to advocate that in order to revive economic growth and avert deflation, QE is a necessity.
The jobs reports shows that QE only makes the rich richer. In fact the Fed has increased its balance sheet from $900 billion to $2.9 trillion the difference is $2 trillion, while the job report shows that 58 percent of Jobs created pay only $8 hour or less.
Last week at the DNC, Obama suggested that he would cut the deficit but strongly asserted he would use money saved from the wars to reduce the deficit, which is strange since that money doesn’t exist since the war is being paid for by borrowed money mainly from China. All of this seems to be ignored when discussing the economy and the jobs picture, but what can one expect, for only by American math can you have 119,000 fewer employed in August than July and declare the unemployment rate down.