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Friday, August 3, 2012

Unemployment Rises to 8.3%- Sequestration Will Cut a Million More Jobs

The monthly unemployment rate released just 15 minutes ago increasing for the second straight month from 8.2 to 8.3%. Of additional concern are the coming cuts in the defense budget which will hurt the already bad jobs situation:
Total nonfarm payroll employment rose by 163,000 in July, and the unemployment rate was essentially unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in professional and business services, food services and drinking places, and manufacturing.
Total nonfarm payroll employment rose by 163,000 in July. Since the beginning of this year, employment growth has averaged 151,000 per month, about the same as the average monthly gain of 153,000 in 2011. In July, employment rose in professional and business services, food services and drinking places, and manufacturing.
The  seasonally adjusted U-6 number which combines unemployment, underemployment and those who have stopped looking also rose (for the for the fourth straight month).  It was 14.5 % in April and 15.0 in July.

That's only part of the story, as reported in the Wall Street Journal this morning:
A year ago, the president demanded a $500 billion "sequester" of defense dollars as a penalty should Congress fail to cut a grand debt deal. Congress of course failed, and Mr. Obama's sequester is now imminent. The sequester slash comes on top of the $487 billion in defense cuts Mr. Obama had already ordered in January of this year, threatening the likes of Mansfield.

Defense Secretary Leon Panetta has warned of the damage the sequester will do to national security. Yet the far more immediate political problem for Mr. Obama is that the cuts are compounding his domestic jobs liability—in the final stretch of the campaign.

More than one million lost private-sector jobs, to get down to it, as estimated by groups ranging from the National Association of Manufacturers to the Aerospace Industries Association. Military jobs are on the block, but the bulk of the pink slips will come from private businesses—from giant defense companies on down to smaller businesses that are the economic mainstays of their communities.
What the WSJ is not considering is that those Job losses will lead to losses in the consumer goods categories where those soon-to-be unemployed workers spend their money.

Mr President would you like to tell us again, how your programs worked?

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