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Ian R. Campbell  -  Nov 06 10:04 AM 26 Posts 0 Followers 0 Following
Are you carefully following the U.S. Unemployment Statistics? If you are an investor in Resource or other equities, I suggest it is important that you do.
This morning there is a two-part Zacks' article on Seeking Alpha that is the best summary I have read on the underlying meaning of the U.S. unemployment statistics, and I suggest they are well worth reading - reading time about 15 minutes.  You can access them at http://goo.gl/IJMsO - you will have to paste the URL into your browser, as we have as yet to program our Q&A Forums to enable direct links.  Direct links should be available in our Forums Posts in the next few days.

From my perspective, there are 'jobs' and there are 'jobs'.  The statistics cited in the second of the two articles that are of great interest to me are the breakdown of the jobs added and lost in the 'goods producing sector' (+5,000), the 'manufacturing sector' (-7,000), and the 'service sector' (+154,000). I am not sure what the difference is between the 'goods producing sector' and the 'manufacturing sector', but believe that there is a critically important difference to long-term meaningful 'unemployment recovery' and resultant U.S. economic recovery between the creation of (1) manufacturing jobs and (2) service jobs. There seems to be no meaningful creation of U.S. manufacturing jobs on the horizon, and from my perspective I believe manufacturing equipment technology will continue to evolve to eliminate manufacturing jobs. For me, this does not auger well for a meaningful reduction in the U.S. unemployment rate - and I think the suggestion in the articles with respect to 'getting back to pre-Great Recession unemployment by 2013 or 2017 are at best 'pie in the sky' arithmetic calculations.

I am also concerned for America in the context of both its economy and its social structure with three other things discussed in these two articles: (1) the youth unemployment numbers - in my view McDonalds, Walmart, etc ought to employing America's youth, and not those that otherwise ought to be retired, (2) the differences in population segment unemployment figures cited in the second of the two articles, and (3) the view expressed in the second of the two articles that an increase in temporary workers is a pre-cursor to an increase in permanent workers. That view may not reflect seasonality as we come into the Thanksgiving and Christmas Holiday periods, and simply may not be correct in the circumstances of the very different U.S. economic environment (at least as I see things) that exists today versus the pre-2000 period when American employment was so much more a 'manufacturing economy' than it is today.

That said, while these two articles do not leave me with 'warmer and fuzzier feelings' about the U.S. unemployment situation going forward, I do believe them to be very well thought out and useful in the context of background information on the underpinnings of the determination of U.S. unemployment rates.

Topics:   U.S. Unemployment Statistics
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