Where are the jobs?!

Today, I'm looking at the Bureau of Labor Statistics unemployment numbers for July. As many have pointed out before, the federal government's numbers don't represent the real number of unemployed people out there. For an understanding of why that is so, you should turn to the Shadow Government Statistics web page on employment. Regardless, here are the government's numbers:

Unemployment Rates for States Monthly Rankings Seasonally Adjusted July 2009p
Rank	State	Rate
1	NORTH DAKOTA	4.2
2	NEBRASKA	4.9
2	SOUTH DAKOTA	4.9
4	UTAH	6.0
5	IOWA	6.5
5	OKLAHOMA	6.5
5	WYOMING	6.5
8	MONTANA	6.7
9	NEW HAMPSHIRE	6.8
9	VERMONT	6.8
11	VIRGINIA	6.9
12	HAWAII	7.0
12	NEW MEXICO	7.0
14	MARYLAND	7.3
15	ARKANSAS	7.4
15	KANSAS	7.4
15	LOUISIANA	7.4
18	COLORADO	7.8
18	CONNECTICUT	7.8
20	TEXAS	7.9
21	MINNESOTA	8.1
22	DELAWARE	8.2
23	ALASKA	8.3
24	MAINE	8.4
25	PENNSYLVANIA	8.5
26	NEW YORK	8.6
27	IDAHO	8.8
27	MASSACHUSETTS	8.8
29	WEST VIRGINIA	9.0
29	WISCONSIN	9.0
31	WASHINGTON	9.1
32	ARIZONA	9.2
33	MISSOURI	9.3
33	NEW JERSEY	9.3
35	MISSISSIPPI	9.7
36	ALABAMA	10.2
37	GEORGIA	10.3
38	ILLINOIS	10.4
39	DISTRICT OF COLUMBIA	10.6
39	INDIANA	10.6
41	FLORIDA	10.7
41	TENNESSEE	10.7
43	KENTUCKY	11.0
43	NORTH CAROLINA	11.0
45	OHIO	11.2
46	SOUTH CAROLINA	11.8
47	CALIFORNIA	11.9
47	OREGON	11.9
49	NEVADA	12.5
50	RHODE ISLAND	12.7
51	MICHIGAN	15.0

Two observations:

1. Only three states have an unemployment rate below 5% (the Dakotas and Nebraska). If you're looking for a job and willing to relocate, I might begin looking there. I say might because, being of such small size, these states haven't really experienced much economic volatility at all during this recession. They haven't lost that many jobs but they're not job creating engines either. So I imagine just showing up and finding a job would be quite difficult.

2. The states with the lowest unemployment figures are all relatively low-population states with not that many urban centers. The states with the largest populations and most urban centers are the ones with the highest unemployment figures. The one exception is Texas, which is "only" at around 8% unemployment according to the BLS. Economists are saying we're entering a "job less recovery" ... meaning stocks and assets might make gains for investors but it doesn't appear that many jobs are going to be creating in the near future. Even the most optimistic establishment economists are saying that half of the manufacturing jobs that left this country during the recession will never return. That's a very negative job picture for the American public. There is no way the American consumer is going to return in a big way under those conditions, yet that is exactly what this economy needs according to these same economists. This is a major reason why I'm extremely skeptical about a recovery any time soon.

Job Growth (?)

I want to draw your attention to this article from the New York Times. And specifically to this graphic. The Times writes that:

FOR the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.

The accompanying charts show the job performance from July 1999, when the economy was booming and companies were complaining about how hard it was to find workers, through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.

This reveals more about the state of the real economy than any stock index or analyst opinion does. Without jobs there are no consumers, and without consumers there is, in effect, no American economy. Now, of course, there are jobs out there. But with unemployment reaching towards 10% nationally and closing in on 20% in some particular areas, its clear that finding a job is a much harder venture than it was a few years ago.

One comment in the article which I found interesting was:

Hard as it may be to believe, the consumer economy of the United States actually lost retail jobs over the decade, at a rate of 0.2 percent. There were fewer people working in food stores. But the category of general merchandise stores — like Wal-Mart and Costco — showed an impressive gain of 1 percent a year, even though the category also includes department stores like Macy’s, where the number of jobs has fallen.

So even retail, one of the supposed bright spots of the economy, suffered in this decade.

If you look at the graphic, you'll see that the two economic sub-sectors which exhibited the greatest growth were 'Management & technical consulting' as well as 'Home health care.' I'd like to go more in-depth into each of these industries later. Needless to say, I'm skeptical that they will be drivers of economic growth.

In recent memory, one of the primary reasons that management consultants have been hired by corporations is to and fire and downsize. With smaller operating budgets during this recession, I wouldn't be surprised if the use of management consulting declines overall.

Secondly, when it comes to home health care nothing is a 'given.' I keep hearing people trot out facts about the aging boomer population and how they'll need home health care in the near future. Yes, there will be a lot of elderly people in the United States. There are many elderly people around the world, however, and not all of them receive commercialized care (or government care, for that matter). Most are taken care of by their families. If there is no money to pay for commercial home health care, it doesn't matter how many old people you have. Lets just take a look at a few factors:
1. The incredible wealth-destruction that many retirement accounts have been subject to during this recession.
2. The incredible debt load future generations will carry.
3. The dismal jobs situation in the United States.
With these three conditions in mind, how can we be so sure that health care will continue to grow at such a rapid rate and be a job-creator? In my opinion, we can't.

Thus, I see the New York Times job report as being all-around dismal.