In the latest sign of recovery, we learn that 80% of those who lost their jobs last summer are still out of work:
Via Huffington Post:
Just one in five people who were out of work last summer have found jobs since then.
Of more than a thousand unemployed people surveyed by Rutgers University researchers last August, just 21 percent had landed a job by March, a followup survey reveals. Two-thirds remained “unemployed” according to the government’s definition — the rest gave up looking for work altogether, either going to school or retiring early.
“It’s a pretty grim study,” said Cliff Zukin, one of the authors of the report at the John J. Heldrich Center for Workforce Development at Rutgers.
Here’s how this grim finding looks graphically:
Of the people who found work, only 13 percent found full-time jobs, and 61 percent said their new gig was just “something to get you by while you look for something better.”
Seventy percent have been looking for work for longer than six months, the survey found — up from 48 percent in the summer. (In March, the number of people out of work for that length of time increased by 414,000 month to 6.5 million, representing 44.1 percent of all unemployed.)
To cope, 70 percent dipped into retirement funds, 56 percent borrowed money from family or friends and 45 percent turned to credit cards. Forty-two percent skimped on medical care, 20 percent moved in with family or friends and 18 percent visited a soup kitchen.
“The cushion’s completely gone,” said Zukin. “I think we’re looking at more cutting the core… It’s a much deeper economic gash this time.”
Still wondering how consumer spending is holding up? For one, the savings rate is going down as consumers struggle to maintain the life they lived during booms times. We’ve also opined that many of those who have stopped paying their mortgage are now contributing their former mortgage payments to the economy in the form of consumption.
It will all come to and end soon enough, as savings will disappear, retirement accounts will be destroyed in stock market wipe outs, dollar devaluations or bond crashes, and banks will foreclose on homes (eventually, we think). Government taxes will further choke off any hopes for recovery.
The money in the wallets, bank accounts, and credit cards of average Americans will run out, and we’re getting very close to that point now.
Regardless of how the media and our public officials spin it, there can be no jobless recovery, because without jobs (production), there can be no spending (consumption). Monopoly money from the Federal Reserve can only go so far.