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Proof the Economy is Stalling

As a commercial pilot with 30 year's experience, I can tell you that there is no more sickening feeling than hearing your stall warning alarm during a takeoff.

That is exactly what I was hearing Friday morning when the Department of Labor announced that June nonfarm payrolls fell by 125,000.

The unemployment rate fell from 9.7% to 9.5%, and no doubt this will be the headline. The broader measurement of unemployment, which includes discouraged workers, also dropped a smidge to 16.5%.

But those accomplishments were achieved because 650,000 workers abandoned the labor force, shrinking the base. The only bright spots were the 83,000 private sector jobs that were gained and the 15,000 in upward revisions in the April and May numbers.

June nonfarm payrolls

There is no doubt momentum is fading, and that there is a downshift in private sector hiring underway. The BP oil spill is having an immeasurable effect, as thousands of oil workers, fishermen, and tourist industry staff were sent to the dole queue.

The unemployment rate for those with college degrees is at 4.7%, higher than in past recessions. Those now jobless face a long search.

At the current rate, it will take six years to recover the 8 million jobs that vanished during the Great Recession.

The most severe economic crisis in 80 years will generate similarly frightening pull backs in any recovery, and I think this is one of them. It looks like there will be no fireworks for this Fourth of July after all.

Courtesy: Mad Hedge Fund Trader


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Leave a comment
  • Anonymous on July 05 2010 said:
    Agreed. Your expression "momentum is fading" is absolutely correct. I am a democrat, pro-Obama and very pro Bernanke and Summers, but something is wrong. If asked I would say carelessness and too great an interest in trivia. Of course, remembering some of my lectures, and some of the students I have encountered in a few places around the globe, a 5 percent unemployment rate for the college educated doesn't seem particularly high.
  • Anonymous on July 05 2010 said:
    Gee 4.7% unemployment for those with college degrees. Would like to see how many more over educated bums are working at Ches Ray or better yet are back mooching off of the family or never got a job. Also did not realize that the economy had picked up. I know that the Administration's lies said we were getting better, but from what I see, read and watch at work, we are still on the down side of the slope. Fred sounds like one of the people that believe in big government and its lies. If you do not like my country please move to Europe (Greece might be a good place for you).

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