Per Reuters today:
The US unemployment rate unexpectedly shot up to 6.1 percent in August, its highest in more than 4-1/2 years, as employers cut payrolls for an eighth straight month and labor markets showed signs of accelerating decline.WHY is this "unexpected"?? morons! The only ones that seem to keep saying how great our economy is are the elected officials running the show currently (and perhaps the Republican follow-up show that is running for office right now too). Everyone else in America (aside from the very upper end of the income scale) can see first hand that inflation is rampant, housing prices are slumping, credit is tight, and people living rather near the "edge" of their means, which is all forcing spending to slow to include primarily the "essentials" (though, my view of essentials differs from most other peoples', as I exclude things like cell-phones, cable TV, and the like - those are choices people).
I see this first hand. I sell my Gluten-Free Recipes Book directly via the web, and I have seen a direct (inverse) correlation between gas prices and my book sales, which I discussed in another blog about Gluten-Free Cookbook Sales and Gasoline Prices (I wrote that on in September, 2007). It has only gotten worse as gas passed through $4.00 mark. The recent easing of gasoline prices helped stimulate sales a bit, but they are still lagging the pre-$3.00/gallon days considerably.
The fact is, people are TAPPED OUT! And when people stop spending and/or are forced to spend just on the basics (well, at least the American version of basics), that means that various product and service providers are losing their ability to sell things (like my book), which can lead to staff being reduced and unemployment increasing. Heck, just the massive housing decline alone should be enough for most idiot economists to see that there are going to be long-term and far-reaching implications for unemployment as the trickle-effect of products/services sales revolving around real-estate slow down.
I can't help thinking that perhaps the timing is perfect for all this. America needs to wake up to the fact that there is a fundamental problem with this economy. We are shipping insane amounts of our assets to energy-producing countries and foreign suppliers of cheap consumer goods. Where do you think that money ultimately goes? Sure, it may come back here in part, but not as reciprocal purchases of United States sourced goods and services for the most part -- instead it comes back by way of financing of our debt and as purchasing of our business assets and the like. We're selling everything that isn't nailed down in order to finance this insane need to fuel our vehicles at any cost, even as it is forcing us out of work by pushing all our much-needed capital out of American business and individuals' hands and into the pockets of foreigners that we will owe forever.
Wake up America! This is JUST THE BEGINNING, unless we make some substantial changes. Oh, and by the way, in addition to any personal debt you may have, do you want to know what your government, under this spend-crazy leadership, has obligated you and your family to?
The following is a quote right from the Treasury's own 2007 report:
Federal debt managed by the bureau totaled about $9 trillion at the end of fiscal year 2007. However, that number excludes many items, including the gap between scheduled and funded Social Security and Medicare benefits, veterans' health care, and a range of other commitments and contingencies that the federal government has pledged to support. If these items are factored in, the total burden in present value dollars is estimated to be about $53 trillion.3 Stated differently, the estimated current total burden for every American is nearly $175,000; and every day that burden becomes larger. Given the size of the projected imbalance, the U.S. government will not be able to grow its way out of this problem; tough choices will be required.Notice, this is JUST the FEDERAL OBLIGATIONS... add on State, County, Local, etc. How much more obvious can it be - we CAN NOT and WILL NOT EVER be able to get out from under this national debt. There is absolutely no way that every man, woman, and child in this country can fork over $175K each - OBVIOUSLY. The relative "strength" of the USA, especially over the past couple decades, is nothing short of a mirage. It is smoke and mirrors folks. It was a series of "bubbles" (tech bubble, then real estate, and TONS of government spending throughout).
Our coffers are drained, and the signs are showing more and more. This doesn't mean immediate doom though, as our government has shown an incredible ability to keep the house-of-cards standing via ever-more debt... including the latest "stimulus checks" (which I posit were to BLAME for much of the inflation spike and gas-price spike - see that link for my predictions and outcome.) And, of course, more government officials are calling for further stimulus packages (which of course mean, just put it on the giant credit-card of the US government to hide the fact we are seriously hosed!).
I am perhaps a bit alarmist, but the fact is, something has to change. Unemployment increases should not be seen as a "surprise" or "unexpected" event in the least bit given the fact that our financial underpinnings are built on a foundation of quicksand. Get ready for more such "news" going forward, as the ripple-effect spreads. Don't confuse ripple with trickle (like the supposed "trickle down economics" that are supposed to save us through tax-cuts, and extended tax-cuts, to the upper income levels -- though, there is some relation between two, as this tax policy has helped lead us to this current state).