Job Reports: Covering Up the Grim Reality

The recent reports being released by the Bureau of Labor Statistics would make the average citizen believe that we have an economy that is growing and regularly gaining jobs every month.   In fact, according to the report for February, it was the twelfth consecutive month of over 200,000 jobs created.  The problem with these reports is how they represent the data they have collected.  If we begin to dig deeper into the information and how they determine each statistic we quickly come to realize that there is a dark and grim truth underneath these positive sounding numbers.

Let’s begin dissecting these numbers and the reality behind them.  For February the BLS said unemployment was down to 5.5% from 5.7% in January and the economy created close to 300,000 jobs.  So here’s the first important issue, the people they counted in those unemployment numbers are called “U3” unemployment, which means they’ve been actively looking for the last four weeks.  If you were someone who actively looked for work up until one day before the last four weeks then you are not counted.  You’re considered a “discouraged” or “marginally attached” worker.  The unemployment number also doesn’t count those who are only doing temporary work and could switch jobs in between surveys.

That’s not the only number the survey isn’t counting either.  Workers who have given up searching for work because they believe there aren’t any jobs for them anymore are put in a category called U6.  This class of workers is roughly 11% of the workforce, but they have been dropped from consideration because of their long lack of activity in pursuing a new job.  According to Dawn Bennett when you add up all these numbers you will sadly discover that roughly 23.1% of Americans capable of working aren’t.  Obviously, that doesn’t take a genius to realize something is seriously wrong.

If you think those facts are startling; hold on to the seat of your pants then.  According to the report, 58,700 of the jobs created in February were waiters and bartenders.  These jobs also happen to have gained the most in the minimum wage category over the last eighteen months, but these definitely aren’t the full time jobs that give people financial stability and independence.  Part of what has wrecked the American economy over  the last twenty years has been the free trade agreements, such as the North American Free Trade Agreement (NAFTA) and when China joined the World Trade Organization (WTO) in 2001.  These agreements have cost us American manufacturing jobs to the tune of roughly 2.1 million+.  As Dawn Bennett points out, this has caused American households to lose wage growth and also lead to ballooning trade deficits with these countries.

Our economy isn’t as strong and robust as many would like everyone to believe.  It’s time for all of us to pull our heads out of the sand and examine the information we are being given more closely, so that we know what is happening and how to best invest our money.

 

Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.

 

For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com

Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.

 

About Dawn Bennett

Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or dbennett@bennettgroupfinancial.com

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A Storm is Brewing

The economy has been trending upwards for some time, or so that’s what the media and everyone in D.C. would like to lead us to believe.  There is more than meets the eye though.  Yes, it is true the stock market’s prices have been on the up and they appear to be doing quite well over the last six years.  However, underneath that shiny looking exterior is a grimmer and unsettling picture.  The economy has been adding jobs, but these jobs aren’t high paying and they aren’t providing the full 40 hours that adults need in order to live a stable lifestyle.  Furthermore, people with full-time jobs aren’t seeing wage growth needed to keep up with inflation.

Dawn J. Bennett has been tracking and covering these problems in detail for years now and is calling out to investors to put their thinking caps on.  It is no longer enough or safe to simply be well educated on the markets; investors need to really dig deep so that they have a more fundamental understanding of what is happening with the economy.  For example, just recently the University of Michigan’s final February consumer sentiment numbers were released and it went from 98.1 in January to 95.4 in February.  This means people are beginning to lose hope in the idea that incomes will rise and better business opportunities are coming.

Another warning signal that has smacked us straight across the face is the drop in the Chicago Business Barometer from January to February.  In January the rating was 59.4 and in February it plummeted to 45.8 – that’s the lowest it’s been since 2009.  For those not familiar with the Chicago Business Barometer it is also known as the Chicago Purchasing Manager Index (Chicago PMI).  It measures the health of the manufacturing sector and in general when the score falls below 50 it indicates contraction in the future for the economy.

We all wish the bad news ended there, but Dawn J. Bennett has done her research and has more that indicates a storm is coming for us.  The Bureau of Economic Analysis (BEA) also recently revised its estimate for fourth quarter 2014 GDP growth down.  The revised number was 2.18% which was roughly a 43% drop from the third quarter.  Downward revisions in GDP growth are always a major warning for the economy and it appears as those in the Federal Reserve and D.C. are blind to these realities.

It’s time for investors to stop glossing over these important numbers and details.  There has been too much aggressiveness in the market lately over unstable investments.  It’s time to pay attention to the smaller numbers and dig into reports to gain a real understanding of what is happening in our economy.  It’s time for everyone to stop letting themselves be told the future is sunny and smooth sailing because the reality is we’re heading into a major economic storm that will be brutal for lots of us.

 

Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett ordbennett@bennettgroupfinancial.com