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.
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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 email@example.com