As Time Goes By, Is the Economy Getting Better or Worse?

It’s time to look back two years ago and see what happened. The trough of the unemployment situation started October 2008 and abated some by April 2009. The losses in those months were historic: -554,000, -728,000, -673,000, -779,000, -726,000, -753,000, and -528,000. A normal really bad month is -250,000. These numbers were 3 times that. All told some 4,741,000 jobs were lost during this time period and remember, this is just the bottom of the trough.

As time passes employment seems to be improving. Just today a key benchmark was surpassed: the weekly jobless claims fell below 400,000 for the first time in two years. These are people filing for unemployment benefits for the first time.

Two years is 104 weeks and unemployment benefits last, at their longest, 99 weeks. It’s estimated that 3,500,000 people are no longer eligible. This social safety net, weak as it is, is gone for an additional 1.13% of the US population. There are two questions now. First, have, or will, these individuals acquire skills that are needed in the marketplace? Second, are they geographically trapped (can they move to a location that does need their skills)? Perhaps it’s a new era of the migrant worker. “Make no mistake, moving is living.”

The answers to these questions will have potentially costly effects on the US economy as conditions slowly improve.

Which reminds me of a year ago. I saw and enjoyed a George Clooney movie called Up in the Air. Clooney plays an employee of a company that conducts lay offs for other companies. Although, the movie coincided with a year into the recession (end of 2009) the theme was about layoffs. There were several scenes featuring people who are shocked, heart broken, and terrified about what is next for them. It’s a stomach punch.

A year or so later comes another similar movie called The Company Men. It stars Ben Affleck, Chris Cooper, and Tommy Lee Jones as three men let go from their jobs. The movie is about their emotional fight of being someone who no longer has a work identity. But as Up in the Air was about ending the employment relationship, The Company Men is about redefining it.

Value Creator – CEOs

Chief Executive Magazine and are running the third annual list of CEOs that are value creators and value destroyers . The standard measurement of a CEO doing well is the stock price, but there are influences on a stock price that may or may not happen. For instance Apple’s stock price barely budged when news broke that the iPhone was going to be offered on the Verizon network. The stock didn’t move because it was already priced in – investors expected it.

The measurement Chief Executive Magazine uses is:

Economic Margin (EM) is calculated as (operating cash flow – capital charge)/invested capital. Companies with positive EM (greater than 0 percent) are creating wealth; those with negative EM are destroying it.

Here’s a portion of the list :

Top 10

Overall Ranking ’09 Rank Change from ’09 Rank MVIC 3 Yr. EM EM Change Management Quality Score Company CEO CEO Last Name
1     A A A A Jeffery H. Boyd Boyd
2 23 21 A A A A AFLAC Daniel P. Amos Amos
3 2 -1 A A A A Federated Investors J. Christopher Donahue Donahue
4 35 31 A A A A Apple Steven P. Jobs Jobs
5 4 -1 A A B A Jeffrey P. Bezos Bezos
6     A A B A Colgate-Palmolive Ian M. Cook Cook
7 7   A B A A Ecolab Douglas M. Baker, Jr. Baker
8     A A A A DeVry Daniel Hamburger Hamburger
9 40 31 A A B A Fastenal Willard D. Oberton Oberton
10 6 -4 A A C A C.H. Robinson Worldwide John P. Wiehoff Wiehoff

Moved to an Emotional Brink?

I try to include a human element to my posts. I like people; I like to know what makes them tick. I love someone who is so passionate that they make themselves heartbreakingly vulnerable. You see it most often in sports with the defeated, whether it’s a tennis player or a basketball player slouched over in pure exhaustion, not necessarily from the effort but from the emotional toll. You know they are searching for what went wrong.

I believe one of the most powerful things in the world is someone who has collapsed to their knees, shoulders drawn in, head low, and is weeping because of a loss of a loved one. As awful as this is, I quietly celebrate it. At rare times, that is what life is all about. To be moved to an emotional brink. The person who is gone must have brought such joy, must have made such an impression, that a future without him or her is simply unimaginable.

I write this because a friend of mine from High School has been diagnosed with an aggressive form of cancer. Something called Clear Cell Sarcoma (CCS). Bret, my teammate in several sports, has documented his experience on a blogĀ and I suggest checking out “My Story.”

What makes Bret’s account so gripping is that he is the type of guy with a definitive essence. Perhaps there is someone out there that doesn’t like him, but I doubt it. He’s very likable, genuine. His blog proves it by literally and figuratively showing you the innards of someone who can see the last few grains of sand in his hour glass.

As you read his tale there is a point where it switches and it stops being about your friend and it becomes self reflective. You ask yourself what would I do? You think about your family and about your future. Until you really consider your mortality you have passive hope: “Tomorrow I’ll begin my book,” “I’ll start working out next week,” “I’ll get a big raise.” But when you’re told you have a few months, you can’t wait. Very few people are ever sincerely satisfied. Those that are find peace. It’s like they won the game.

Each one of us only has so many numbered days. Chances are you’ll be brought to our knees at least once, maybe more. It reminds me of song lyric I love:

Love is not a victory march
It’s a cold and it’s a broken Hallelujah
Hallelujah, Hallelujah

Bret sunset3

November 2010 Jobs Report and Wages

Here are the job market and compensation numbers for November 2010 (based on the job report):

Net gain
of 39,000 jobs in the month

  • Private sector payrolls increased by 50,000
    • Down from 160,000 last month
    • Worst performance in 10 months

  • Analysts expected an overall gain of 150,000
  • September was revised to a loss of 24,000 jobs from an original reading of 95,000 lost and a revised loss of 41,000
  • October was revised to a gain of 172,000 from an original reading of 151,000
  • The revisions for August, September, and October added 145,000 jobs to the economy
  • 6.1
    million people have been jobless for more than 6 months (long term
    unemployed) – virtually unchanged from August, September, and October

    • 41.9% of the unemployed are long term unemployed – inched up from 41.8% last month and 41.7% the month before
  • The main type of hire was for Temporary Help Service (+40,000) and since September of 2009 this employment has improved by 494,000
    • Its normally an indicator of an improving economic cycle, but a year of it indicates uncertain business conditions

  • Job Openings and Labor Turnover Survey (JOLTS), shows that job openings increased by 351,000 in October
  • The total number of job openings in October was 3.4 million, while the total number of unemployed workers was 14.8 million
  • The ratio of unemployed workers to job openings improved to 4.4-to-1 in October

Unemployment rate went up to 9.8%

  • Analysts predicted it would be 9.6%
  • The unemployment rate has been over 9% for 19 months – the longest such streak since the early ’80s
  • The employment to population ratio is 58.2% – relatively unchanged
  • The
    U-6 report, which is a broader group to count (workers who are part
    time but want to be full time and discouraged worker), stayed at 17.0%. This indicates the increase of the unemployment rate to 9.8% is a reflection of more people actively looking for jobs in November (these individuals are only counted if they are actively looking)
  • The unemployment rate for those with a college education is 5.1%
    • Highest in 40 years

  • PMI,
    a measure of manufacturing pace, is 56.6% and the 19th consecutive
    month of readings over 50 percent. Anything above 50% means the
    machines are running
  • Productivity, measured for the quarter, showed tepid growth of 2.3%

Specific Segment Job numbers:

  • Manufacturing lost 13,000 jobs
  • Construction lost 5,000 jobs
  • Retailers lost 28,100 jobs
  • Leisure and Hospitality Services gained 11,000 jobs
  • Government sector lost 11,000, Federal gained 2,000
  • Education and Health Services grew by 30,000 jobs
    • Health Care and Social Assistance grew by 34,000

  • Professional and Business Services grew by 53,000
    • 39.500 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $642.87 – a decrease of $1.91
  • The average hourly earning (seasonally adjusted) is $19.19
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.5 hours

Bureau of Labor Statistics

Job Report Stats Summary