Economic Headlines for the Week Ending November 4, 2011… and What it Really Means.

All Europe, All Week, Again!… The Greek tragedy continues! There was a surprise announcement that the Greek population would vote on austerity measures, but then it was rescinded. The prime minister resigned, but then didn’t, but did again. It is still about the banks.

What it means… There is no doubt – no matter what the talking heads say – that the Greeks would vote against further austerity. This would throw out the grand but fuzzy plans of the ECB from last week and cause the bailout to fall apart, leading to banks once again being the point of pain with their Greek debt being worth a whole lot less than the price on their books. It is getting very interesting once again!

Productivity Up, Income Down… Companies increased their output by over 3% using the same amount of labor, while unit labor costs were down 2.4%.

What it means… This reflects the cautious nature of businesses. If you can deliver more product with the same personnel, why wouldn’t you? At the same time, there are so many people seeking jobs that the overall cost of labor continues to fall. This is the same scenario we have talked about for years. With inflation up almost 4% and wages down, the thing that gives up ground is our standard of living.

1 in 15 Among the Poorest… 20 million Americans are living at or below ½ of the rate of poverty, meaning an income of $5,570 or less for a single person and $11,157 or less for a family of four.

What it means… With gas over $3/gallon and food prices rising, the implications are obvious, and daunting.

US Unemployment Down to 9%… Non-farm Payrolls came out with an increase of 80,000 jobs, which included 104,000 new private sector jobs and a loss of 24,000 government jobs. The sneaky statistic of birth/death adjustment, meaning guessed at jobs at small businesses, added 102,000. If this is removed, then the number of jobs created goes negative. Unemployment fell to 9% through very minor rounding.

What it means… TheUS is not creating enough jobs to put to work the roughly 125,000 – 150,000 new members of the workforce each month. Instead, we are barely getting any of the long-term unemployed back to work. This measure, viewed in conjunction with the statistics on the poor and the slide in wages above, continue to outline a slack economy. We are slogging through it, and it is no fun.

 (source: HSDent Publishing)

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