The just-released Labor Department report on the U.S. job market in September is a shocker! It’s telling us, with no punches pulled and no ambiguities, that the once-great American jobs machine is breaking down like a rusty old clunker, and all the Fed funny money in the world can’t get it fired up again!
Just look at the job numbers …
- The U.S. economy shed 95,000 jobs in September, up from 57,000 in August and the worst performance since June.
- The “official” unemployment rate held at 9.6 percent. But if you include discouraged and underemployed workers, you get an all-in number of 17.1 percent! Think about that: Almost 1 in 5 Americans can’t find solid, gainful employment … or have basically given up looking!
- Construction lost another 21,000 jobs. Manufacturing shed another 6,000 jobs. IT employment slumped for the second month in a row. While the financial sector shed workers for the FIFTH consecutive month. And the government? A nasty loss of 159,000 jobs, with state, local, and federal governments ALL letting workers go!
- What about wages? No good news there, either! Average hourly earnings flatlined. Companies simply have no reason to pay people more when applicants are a dime a dozen!
Here’s the problem: The Fed seems to think it can just throw money out of helicopters and solve all the economy’s woes. But it’s tried that TWICE before — and BOTH times it just inflated new asset bubbles, first in dot-coms and second in housing. Meanwhile, those free-money binges failed to ignite the real economy.
Albert Einstein famously said the definition of insanity is doing the same thing more than once and expecting a different result. Well now, despite the dismal failure of “QE1,” the Fed is about to roll out QE2. It won’t do a shred of good for the labor market, retail sales, housing, or industrial production — just like QE1 didn’t. But it IS “accomplishing” ONE thing —driving the price of certain assets like gold and silver or wheat and soybeans through the roof … and CRUSHING the value of the U.S. dollar.
Unemployment Explodes into Election Campaigns
Now, suddenly, with today’s shocking report from the Labor Department, unemployment is going to literally EXPLODE in the midst of scores of mid-term election races and overwhelm almost every other issue.
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