Mail Magazine 24...
It’s Stupid Friday.
by Michael Becker 
May 13, 2012 

Sigh. 

I’m more than pretty sure that the folks who write for, and edit, Bloomberg are working for President Obama’s reelection campaign. Here’s Thursday’s headline: 

Jobless Claims Allay Concern on U.S. Job Market: Economy 

Good news upon good news, here’s the first three and a half paragraphs: 

Claims for unemployment benefits declined last week to the lowest level in a month, easing concern that the U.S. labor market is faltering. 

First-time claims dropped by 1,000 to 367,000 in the period ended May 5, the Labor Department said today in Washington. Other reports showed that a gauge of consumer confidence declined to a three-month low, and the trade deficit widened on rising demand for imports from oil to autos. 

Claims are returning to levels reached in February and March, indicating a surge last month probably reflected difficulty in adjusting the data for an Easter holiday that came earlier this year than last. Declines in dismissals point to a brighter labor market that would help sustain consumer spending after payroll growth slowed last month. 

“The health of the labor market is improving,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. 

Wow, first time unemployment claims dropped by 1,000, all the way 367,000! Thank god the economy created 115,000 jobs in the last BLS report. Things have finally turned around and “Happy Days are Here Again!” 

Well, at least until the sixth paragraph where the writers note “The Labor Department revised the previous week from 365,000.” In other words, new unemployment applications dropped 1,000 from last week ONLY because they revised last week’s number up from 365 to 368. This is a game that has been played for the last three years. The administration lowballs the current number and then revises it upward the following report so they can show how things are improving. 

It’s not until we get to paragraph twelve that the truth begins to come out. Keep in mind that consumer spending, at the expense of savings, has been keeping the economy afloat. The pathetic 2.2% GDP growth in the first quarter would have been around 1.5% had not consumers raided their savings and bumped up the balances on their credit cards. In paragraph twelve we learn: 

A rebound in job growth would help shore up consumer confidence, which fell in the week ended May 6 to the lowest level since early February. Consumer spending accounts for about 70 percent of the economy. 

The Bloomberg Consumer Comfort Index declined to minus 40.4, a level associated with recessions or their aftermaths, from minus 37.6 in the previous period. The gauge has declined for three straight weeks and given back more than half its gain from the end of 2011 through mid-April.

Two of the index’s three components declined. The gauge of personal finances fell to minus 11.2, the weakest reading since November, from minus 6.6. A measure of whether consumers consider it a good or bad time to buy slipped to minus 45.8, a three-month low. Americans’ views on the state of the economy were little changed at minus 64.2. 

The comfort index’s 9-point decline since April 15 also marks the biggest three-week slide since March 2011. The gauge reached a four-year high in the week ended April 15. 

‘Economic Discontent’ 

Readings lower than minus 40 are correlated with “severe economic discontent…” 

The bottom line, Bloomberg has less credibility than the supermarket tabloids that feature interviews with aliens. 

The truth is simple. The U.S. economy is in a world of hurt. We’re running budget deficits to the tune of $1T per year, our debt to GDP ratio is over 100% and not headed down. Youth unemployment is in the range of 25% and last year we passed a milestone where student loan debt hit $1T. The housing market is in the tank and, despite what the media is portraying, is not coming back any time soon. 

And then there’s Europe where the Greeks aren’t going to be able to form a government because the “anti-austerity” folks won’t have anything to do with the rules that were laid out by the Germans and pre-socialist French with respect to getting their budget problems under some semblance of control. When all is said and done Greece will pull out of the Euro and default on their bonds. Spain will be next. This is going to be a long hot summer in Europe. I keep bringing this up because our number one trading partner is Europe and you can expect their purchases from us to fall off dramatically through the summer and the end of the year, which will not be good for our economy. 

In addition to the above, here’s another sobering number. Remember that the U.S. economy created 115,000 new jobs last month and we’re getting bullish (no, I didn’t leave off the last two letters) spin from the administration and their media ilk about recovering a economy because “unemployment” dropped to 8.2%. The following was highlighted in Kathleen Pender’s column Net Worth Plus…

More than 200,000 people in eight states — including about 93,000 in California — will abruptly lose their unemployment benefits after this week because their state jobless rates have fallen below the level necessary to maintain the final round of benefits provided by the federal government. 

The other states losing benefits after this week are North Carolina, Florida, Illinois, Colorado, Connecticut, Pennsylvania and Texas. Nineteen other states lost eligibility earlier this year. By the end of September, another seven states will drop off, which will eventually bring the total to 34 states facing reduced federal assistance to the long-term unemployed,” according to a report from the National Employment Law Project. 

What this means is that people who’ve lost jobs will only *only* be able to collect unemployment for 79 weeks instead of 99 weeks. Seventy nine weeks. Two hundred thousand people will be dropped from the unemployment rolls because they’ve been unemployed for a year and a half. Compare that to 115,000 new jobs last month. 

The benefit for the Obama administration – hey, somebody has to benefit – is that those 200,000 people won’t be counted in the workforce for next month’s jobs report so unemployment will go down again. When you see the June BLS report for jobs, remember two things: the two hundred thousand people who will have disappeared down a rat hole and the President’s statement this week when he said “Sometimes I forget” the extent of the recession. 

Source: LibertyNews 

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