Thursday, April 17, 2008

Workers Get Fewer Hours, Deepening the Downturn

The report from the NYT offers some good hints what is going on beneath the radar. Add to this that the reported jobs numbers are more or less a farce and you know why the recession that already started will be much longer than most people think. Scary that some are still in denial ....

Make sure to read this from Mish about the "Enron" like unemployment data Unemployment Soars, Jobs Collapse. Even i would have thought that this kind of Black Box report is almost impossible to top, but wait...... Martin Hutchinson via Barry Ritholtz Pre-Revision CPI: 9% has made it...... UPDATE: More unbelievable stuff via Barry Disappearing Economic Indicators

Dieser kleine Lagebericht der NYT gibt einen guten Einblick was sich unterhalb der nackten Zahlen so abspielt.Wenn man jetzt noch bedenkt das die monatlich verkündeten Daten zum US Arbeitsmarkt bestenfalls was in der Muppetshow zu suchen haben und Enron in nichts nachstehen kann man sich sehr leicht ausrechnen das die USA für lange lange Zeit in einer bereits begonnenene Rezession stecken werden. Muß jedes mal wieder schmunzeln wenn ich höre das noch über die Möglichkeit einer Rezession gesprochen wird. Immerhin scheint sich bei einigen die Meinung zu verfestigen das diese "mild" sein wird. Sind halt "Permabullen".... :-)

Um zu verstehen wie die US Arbeitsmarktzahlen frisiert werden ist der nachfolgende Link von Mish Unemployment Soars, Jobs Collapse Pflicht! Und immer wenn man denkt man hätte in Scahen US Zahlenakrobatik alles gesehen kommt ein neues "Highlight. Dieses Mal von Martin Hutchinson via Barry Ritholtz Pre-Revision CPI: 9% UPDATE: Mehr selbst für mich kaum fassbares erneut von Barry Disappearing Economic Indicators

Workers Get Fewer Hours, Deepening the Downturn NYT
Not long ago, overtime was a regular feature at the Ludowici Roof Tile factory in eastern Ohio. Not anymore. With orders scarce and crates of unsold tiles piling up across the yard, the company has slowed production and cut working hours, sowing worry and thrift among its workers.

“We don’t just hop in the car and go shopping or get something to eat,” said Kim Baker, whose take-home pay at the plant has recently dropped to $450 a week, from more than $600. “You’ve got to watch everything. If we go to town now, it’s for a reason.”

“We don’t just hop in the car and go shopping or get something to eat,” said Kim Baker, whose take-home pay at the plant has recently dropped to $450 a week, from more than $600. “You’ve got to watch everything. If we go to town now, it’s for a reason.”
Recessionary Signs
The gradual erosion of the paycheck has become a stealth force driving the American economic downturn. Most of the attention has focused on the loss of jobs and the risk of layoffs. But the less-noticeable shrinking of hours and pay for millions of workers around the country appears to be a bigger contributor to the decline, which has already spread from housing and finance to other important areas of the economy.

While official unemployment has risen only modestly, to 5.1 percent, the reduction of wages and working hours for those still employed has become a primary cause of distress, pushing many more Americans into a downward spiral, economists say.

Last month, the hours worked by those on American payrolls dropped, compared with six months earlier, according to an index maintained by the Labor Department. The last time the index moved into negative territory was February 2001, when the economy was on the doorstep of recession. A similar slide emerged in August 1990, one month into what proved an even more severe downturn.

At the end of last month, more than 4.9 million people were working part time either because they could not find full-time jobs or because their companies had cut hours in the face of slack business, according to a Labor Department survey. That represented an increase of 400,000 since November.

Paychecks are diminishing just as millions of Americans are finding their access to credit constricted as well. Borrowing against the value of real estate — a crucial artery of household finance in recent years — has been pared back as home prices have plummeted and as banks have tightened lending standards in the aftermath of the collapse of the housing bubble.

“At this point, those avenues are blocked,” said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington. “Consumption going forward is going to be in large part a good old-fashioned function of paychecks and incomes.”

Even before the rollback in working hours, pay was barely keeping up with the rising costs of gas and food. From February to September of last year, the average hourly earnings for workers in the private sector was still growing at a slightly faster clip than the pace of inflation, according to the Labor Department. But from November through March, as employers began to scale back in a variety of ways, wage growth fell below the pace of inflation, meaning that paychecks were effectively shrinking.

> And this even on the base of the "reported" CPI ...

> Und das auf bereits auf Basis der absolut lächerlichen offiziellen CPI Nummer.....

Now, work opportunities are themselves declining, as the downturn snuffs out business

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