To listen to various Bush Administration representatives, everything is fine with the economy. Granted, Friday we found out that 110,000 jobs were created in March — less than half what the experts expected, and less than what is required to absorb new entries to the job market, more than the 86,396 announced layoffs — but that’s “good” because it means there is less inflationary pressure and therefore Agent Greenspan will be able to keep interest rates low, low, low. Of course the international currency markets think interest rates are going up. The parade of bad economic news continues, and Bloomberg is nice enough to summarize for us: personal spending rose faster than personal income; first time unemployment claims “unexpectedly rose to 350,000”; factory orders did not meet the levels forecast in February; gas prices keep rising; disposable income up, but not as much as it was down the previous month; oh, and that may only be because of tax refund checks. It might also have to do with the fact that consumer debt outstanding rose $7.5 thousand million, and $11.5 thousand million the previous month.
Here are figures from the Bureau of Labor Statistics This page may be updated with new information in the future, so let me give you some of the meaty bits. There are officially 7.7 million unemployed people by the narrow, Department of Labor definition, 21.5% of whom have been unemployed at least half a year. This does not count the 1.6 million people who are “marginally attached to the labor force.” The number of employed people, 140.5 million, remained unchanged despite our growing population. Although the official average hourly wage was $15.95 — a figure which is distorted by small numbers of high wage individuals — the average weekly wages were $537.32. That’s a typical workweek of 33.7 hours.
So wages aren’t changing much, employment is barely keeping pace with layoffs let alone new workers. Expenses are rising. Oil has been over $50 per barrel for a while now, and even Greenspan is concerned about the effect that will have on the energy markets and the economy as a whole. Inflation isn’t a risk; it is here. Gas prices are at a new high at a time when Americans are spending at least 20 minutes getting to work. So much for saving money by living farther from work.
That house “a little farther out” may still be at the outer reaches of the family budget, making the gas prices a far bigger deal. Mortgage companies have been bending over backwards to make home-ownership happen for people who can barely afford it. Some of the tools they have been offering, in particular Adjustable Rate Mortgages (ARMs) and “interest-only” loans, are going to bite these people in the wallet in the next few years. Here’s two takes on the subject, from the L.A. Times and The Christian Science Monitor. For goodness sake, if you have an ARM call your mortgage company today about locking in a permanent rate!
Between the mortgages preparing to implode and the fact that personal debt is rising by billions of dollars a month, that bankruptcy reform bill will be a real disaster for the working class if it passes.
In closing, I’d like to say something to my Texan readers. Your junior Senator went on record as saying something so jaw-droppingly mind-bendingly stupid that you cannot and should not ignore it. You remember Tom DeLay saying the judges involved in upholding the Constitution (to say nothing of doing what most Americans thought they should) would “answer for their behavior”? And do you remember Senator Lautenberg politely reminding Mr. DeLay that threatening a judge is a federal offense? Now Senator Cornyn of Texas has said, in veiled language, that violence against judges is their own darn fault because they make bad decisions. That Federal Judge in Illinois who came home to find her family slaughtered? She was asking for it (by putting bad guys in jail)! If that’s true, then we are all doomed. Texans, this guy is a first termer. Replace him before he gets any kind of seniority. The nation depends on it.