Spain jobless rate tops 20%, adds to debt worries

Spain is sometimes held up as the poster-child for the green economy. The reality seems to be a bit different.

From Yahoo! News:

Spain’s jobless rate topped 20 percent in the first quarter, national statistics institute INE said Friday, fueling fears over the country’s public finances which have rattled global financial markets.

The number of unemployed jumped by 280,200 to 4.61 million, more than in Germany which has nearly twice Spain’s population, for a jobless rate of 20.05 percent. The unemployment rate rose from 18.83 percent in the fourth quarter.

The last time the unemployment rate topped 20 percent in Spain was in the fourth quarter of 1997 when it hit 20.11 percent.

Spain’s jobless rate has soared since the global credit crisis hastened the collapse of its labour-intensive construction industry at the end of 2008.

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Why won’t Obama give you a job?

From The Washington Post:


The White House thinks the stimulus is working, and it doesn’t want you on its payroll


To hear President Obama tell it, he’s been busy creating jobs since taking office. The $787 billion stimulus package, he said last winter, would “save or create 3.5 million jobs.” The White House is touting reports from recipients of stimulus funds asserting that they have created or saved 640,000 jobs so far.

Yet the national unemployment rate has now hit 10.2 percent, helping explain why Republicans won the governors’ races in Virginia and New Jersey last week, just a year after the party’s 2008 drubbing. And Obama declared Friday that more action is needed.

“History tells us that job growth always lags behind economic growth, which is why we have to continue to pursue measures that will create new jobs,” he said. “And I can promise you that I won’t let up until the Americans who want to find work can find work.”

It was a strong vow, but it raises a question: Why has a White House that talks so much about boosting employment steered clear of the most direct strategy that could keep Americans on the job?

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U.S. Economy: Unemployment Rate Jumps to 26-Year High

How’s that Hope(TM) and Change(TM) working out for you? The stimulus was supposed to keep unemployment from going above eight or nine percent. Here we are now at 10%. Obama has been in office for 10 months and they still blame all the bad things on Bush. How much longer can he do that and get away with it? At what point does he start accepting responsibility for the economy?

Also, if the “official” rate is 10.2%, what is the actual rate? The “official” number doesn’t include people whose benefits have run out (but who are still unemployed), people who have stopped looking for work, people who are underemployed (working reduced hours, or people who have degrees but are working at burger joints or as delivery people just to have some type of income). In reality the unemployment rate is much higher, like 16% or more. This article in The New York Times puts the unemployment rate at about 17.5%.

From Bloomberg:

The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, casting a pall over the prospects for a sustained recovery and risking further erosion of President Barack Obama’s popularity.

Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed today in Washington. The jobless rate rose from 9.8 percent in September. Factory payrolls dropped by the most in four months, and the average workweek held at a record low.

Treasury two-year notes rose on bets the Federal Reserve is more likely to maintain its pledge to keep interest rates near zero. The figures prompted Obama, who signed a bill today extending jobless benefits, to promise fresh measures to help put some of the 15.7 million unemployed Americans back to work.

“We will certainly have very bad payroll numbers in November and December,” said Harm Bandholz, an economist at UniCredit Global Research in New York, whose forecast for a 10.1 percent unemployment rate matched the highest among economists surveyed by Bloomberg. “We don’t foresee businesses going on a hiring spree anytime soon.”

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Salary Raise Counted as Saved Job

Yeah, sure, that makes sense. If you get a raise, you didn’t lose your job, so your job must have been “saved.” With creative counting like this, it’s no wonder that they can claim that more than 640,000 jobs have been “saved or created” by the stimulus bill.

From CNSNews:

The government’s latest count of stimulus jobs significantly overstates the effects of the $787 billion program under a popular federal preschool program, raising fresh questions about the process the Obama administration is using to tout the success of its economic recovery plan.
 
An Associated Press review of the latest stimulus reports – which the White House promised would undergo extensive reviews to ensure accuracy – found that more than two-thirds of 14,506 jobs credited to the recovery act under spending by just one federal office were overstated because they counted pay increases for existing workers as jobs saved.
 
The inflated job count is at least partly the product of the administration instructing local community agencies that received money to count the raises as jobs saved.
 
“That’s more than ridiculous,” said Antonia Ferrier, a spokeswoman for Republican House Minority Leader John Boehner.

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Unemployed? Blogging? Don’t Put Ads On Your Site Or You Might Lose Your Unemployment Check

From TechDirt.com:

For quite some time, many people credited part of the rise of blogging to the fact that many folks in the tech industry found themselves out of work in the wake of the dot com bubble bursting. Suddenly there were lots of tech geeks, who were always online and had stuff to say — and now plenty of extra time to say it. It didn’t take long for a whole slew of tools to pop up to make that happen, and voila, blogging revolution. I’m not sure I really believe that story, but there have been some suggestions that the current financial crisis my lead to something similar, with the unemployed speaking up online. Except… you might not want to do that if you’re unemployed and in New York. Forbes is reporting that a lawyer’s unemployment benefits were greatly reduced, because his blog earned about $1/day in ad revenue. The whole thing sounds like a bureaucratic nightmare, with NY State asking her to get a form from her new “employer” who didn’t exist. Then NY Department of Labor started giving her all sorts of contradicting information, and eventually an “investigation” into her “business” — during which time her unemployment benefits were stopped entirely. She’s now pulled the Google AdSense from her blog (total earned over the life of the blog $238.75).

It’s really stunning how various labor departments are simply ill-equipped to handle a modern labor force. Reading through the story of this lawyer is not at all surprising. While most of our employees are in California, we’ve had employees in a few other states, and none of them seem to know how to deal with the idea that people in their state might work remotely for a company in another state. Just last week, we were dealing with one particular state, where we had an employee who hasn’t worked for us in nearly two years — but the state insists we still owe taxes for him and on our “office” in that state, for every day since he no longer worked for us. We’ve written letters, filled out forms, spoken to people at the local labor department — and all to no avail. Every couple of months, they send us an updated statement insisting we still owe them money for someone we haven’t employed in ages. All of these labor departments are designed based on an old model whereby there was a big company that had a presence in the state, and employed people. They can’t handle the idea that someone might work remotely or that people might make some other income from a blog or other source. One of these days, perhaps they’ll update their systems, but until then, it’s just a bureaucratic nightmare.

Peter Schiff on Russia Today

Rockstar Economist Peter Schiff tells RT’s Marina Portnaya that Lehman Brothers failure was a success not a failure. He says Americans will face increasing unemployment, inflation, and possible bread-lines if government backed bail-outs continue.
(h/t Puppetgov.com)

Bernanke declares ‘recession is very likely over’

The recession is over, but unemployment will continue to be high. Yeah, sure, right.

From MarketWatch:

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke said Tuesday that the recession has ended, at least based on the numbers.

“From a technical perspective, the recession is very likely over at this point,” Bernanke told a conference at the Brookings Institution. But “it’s still going to feel like a very weak economy for some time.”

Bernanke added there is a risk that labor markets will remain weak through 2010 because growth will be too anemic to create jobs. Many economists now expect the labor market to recover slowly, he noted.

Taxpayers Beware, AIG Still in Need of Rescue

WSJ’s Dennis Berman tells colleague Evan Newmark why we should still care about AIG. He says taxpayers should know that parts of the insurer are still in need of rescue and that they will most likely be the ones footing the bill.

Unless the economy can manage growth stronger than its long-term trend rate, “unemployment will be slow — slow to come down,” he said. “It will come down, but it may take some time.”

After acknowledging that economic forecasting “is not one of your most precise sciences,” Bernanke said most forecasters think economic growth in 2010 will be moderate because of “ongoing headwinds,” including financial and credit problems, sectoral adjustments in the economy, the desire of families to pay off debt and the need for the federal government to restrain spending.

Vince Reinhart, a former top Fed staffer who is now at the American Enterprise Institute, said the technical end of the recession is more about arithmetic than anything else.

“June was mostly likely the trough. Growth will be positive in the third quarter,” he commented. “All that tells you is that market economies do not stay in free fall. That doesn’t tell you that we have a durable expansion in motion, it doesn’t tell you growth is assured in 2010 and it doesn’t tell you that the unemployment rate goes down.”

Bernanke also expressed confidence that Congress would complete work on new rules for Wall Street.

Many analysts have raised doubts that Congress could grapple with reforming the health-care system and the financial framework this year. But Bernanke didn’t share this doubt.

“I am quite confident comprehensive reform will be coming,” the Fed chief said.

One of the reforms that’s needed is to provide some way to unwind big financial institutions “in a way that would impose market discipline, impose losses on creditors, but would avoid the disorderly chaotic type of collapse that we saw with Lehman a year ago.”

The bulk of Bernanke’s remarks was devoted to a defense of the response from the Fed and its global partners to the financial crisis. Read his prepared remarks.

Bernanke said global regulators acted swiftly in the wake of last September’s financial crisis and succeeded in bringing the global economy back from the brink of collapse. There is no longer widespread fear of a financial collapse and economic activity is leveling out, he added.

Bernanke’s remarks were similar to a speech he gave in August at the Fed’s annual retreat in Jackson Hole, Wyo.

Since the August speech, Bernanke was reappointed by President Barack Obama to a second four-year term at the helm of the central bank.