ShoreBank Blog
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Posts Tagged ‘unemployment rate’
Tuesday, March 2nd, 2010
Times are tough all over. This month’s Atlantic Monthly magazine carries a thought provoking and thoroughly dispiriting article by Don Peck called, “How a New Jobless Era Will Transform America.” Peck quotes Kathryn Edin, who teaches public policy at Harvard, describing her recent research in South Philadelphia. “These white working-class communities—once strong, vibrant, proud communities, often organized around big industries—they’re just in terrible straits. The social fabric is just shredding. There’s little engagement in religious life, and the old civic organizations that people used to belong to are fading. Drugs have ravaged these communities, along with divorce, alcoholism, violence.” That’s an ugly picture, but the worst is yet to come. “I hang around these neighborhoods in South Philadelphia, and I think, ‘This is beginning to look like the black inner-city neighborhoods we’ve been studying for the past 20 years.’”
Edin’s comments unintentionally point out that many people have long-ago written off mostly-minority neighborhoods. Except, of course, the people who live in those neighborhoods. Despite the tremendous stresses of lost jobs, tumbling home values, and growing neglect from the larger community, the residents of the minority neighborhoods ShoreBank serves continue to care deeply.
The reason is that people in our communities can put down roots. Unlike in wealthy suburban areas, several generations can afford to live in the same neighborhood. There are few “For Sale” signs because homes are often passed on to the next generation, other relatives, or friends. There is a vibrancy and cohesion that ShoreBank recognized from the beginning and continues to value, and indeed, to rely on.
But, all the economic data—national, state, and local—lead inexorably to the same conclusion: the downturn has hit minorities much harder than white Americans. For blacks as a whole, this is not a recession, but a full-scale depression. As a general rule of thumb, the numbers show that, however bad things are for whites, they are twice as bad for blacks. However good things are for whites, they are half as good for blacks. The ramifications of racism live on.
Tags: community development, economic predictors, financial crisis, ShoreBank, triple bottom line, unemployment rate
Posted in Banking Industry | No Comments »
Tuesday, February 2nd, 2010
The American Recovery and Reinvestment Act may have great potential for economic boosting, but we cannot depend upon it to drive new jobs. The federal government website www.recovery.gov provides detailed information on how the $787 billion of American Recovery and Reinvestment Act funds are being distributed. As of January 22, the government has paid out $268.8 billion in the form of tax benefits ($92.8 billion), contracts, grants, and loans ($73.2 billion), and entitlements ($102.8 billion). Data on the recipients of stimulus funds is broken down by sub-units as small as zip codes.
ShoreBank’s oldest location is in the heart of the South Shore neighborhood in zip code 60649, where unemployment is more than 20% and home values have declined by more than 40% in one year. A total of just one contract and one grant have been awarded in this zip code. The contract was for $1,800 to H L Jackson Consulting Company to review grant applications. The grant was for $200,000 to an organization called Featherfist to provide services to the homeless. That $200,000 is part of a larger $34 million grant to the City of Chicago which in turn created just 60 jobs, although none at Featherfist.
Based on aggregate data from recipients, 599,108 American workers were being paid by stimulus funds in the fourth quarter of 2009. This seems like a pathetically small number, with more than 15 million Americans unemployed. But it merely underlines what should be obvious: government does not have the capacity to be the primary job creator. Government primes the pump, but the private sector does the work.
Recent reports on Gross Domestic Product growth and strengthening activity in manufacturing are the real signs of progress. GDP surged 5.7% in the fourth quarter, fueled by gains in business spending on software and equipment. Manufacturing activity in January expanded for the sixth consecutive month and manufacturing industry employment is projected to increase in the months ahead. Employment is already growing in fields as diverse as textiles, petroleum & coal products, and transportation equipment. Hopefully, it won’t be too long until job growth returns to 60649 and beyond.
Tags: American Recovery and Reinvestment Act, economic predictors, ShoreBank, triple bottom line, unemployment rate
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Tuesday, January 5th, 2010
January 1, 2010 dawned cold and clear in Chicago, the start of a new year and a new decade. Rarely has a year started with more hope that it will be better than its predecessor. One important survey indicated that Americans are more upbeat about the short-term future than they have been for two years. The economy is recovering from the worst of the recession, but there is a big difference between recovering from a cold and recovering from pneumonia – this recovery will be long and uneven. It will be many months before the fear of a serious relapse can be dismissed. This fear may also be prolonged by the opposing trends in the job and housing markets, which are key economic indicators.
In 2009, over four million jobs were lost, on top of over three million lost jobs in 2008. On average, 575,000 American workers filed for unemployment insurance every week last year. However, recent employment data is beginning to show improvement. Only 11,000 jobs were lost in November, and first-time unemployment insurance claims in December were the lowest in more than a year. Still, the economy has to generate 100,000 new jobs each month, just to absorb new entrants to the workforce.
While the employment picture is brightening, housing remains highly problematic. Mortgage delinquency climbed to 9.64% by September 30. The median sales price for an existing home dropped to $172,600, the lowest since 2003, wiping out trillions of dollars of equity. Spending on construction is also down to 2003 levels.
I actually recently sat down to discuss the economic recovery in 2010 with Lisa Leiter at Crain’s Daily Business, which you can view here.
All-in-all, the watchword for 2010 will have to be Patience.
Tags: economic predictors, ShoreBank, triple bottom line, unemployment rate
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Tuesday, December 8th, 2009
The Bureau of Labor Statistics reported that the overall unemployment situation was unchanged from October to November. The unemployment rate moved down slightly from 10.196% to 9.992%, and non-farm payrolls dipped by a mere 11,000. Job losses for September and October were revised downward, so over the last three months total net job losses were 261,000 compared to 921,000 in the three summer months. Job losses in many sectors—manufacturing and construction especially—continue unabated, but for the first time in many months there are real signs of hope.
The most heartening sign is the growth in temporary help, which has moved from a low of 1.74 million jobs in July to 1.86 million in November, including an increase of 52,000 jobs in October (see chart). As employers begin feeling the need to add workers, they often start with temporary hires before feeling confident enough to add permanent workers. Another hopeful sign is an increase in the average workweek for production and nonsupervisory workers by 0.2 hours to 33.2 hours, the highest level since February.
Few people, except those who were recently hired, should be popping champagne corks just yet. Recoveries can be just as unpredictable and long as the same economic downslide that got the economy to this point. These stats are merely signs that the worst of the economic downslide is over. The true unemployment rate, including so-called “marginally attached” or discouraged jobseekers, remains stubbornly high at 17.2%. Both the average and median length of unemployment continue climbing to 28.5 weeks and 20.1 weeks respectively. But, while the November employment picture is still not good, it is the least bad since 2007.
Tags: economic predictors, ShoreBank, triple bottom line, unemployment rate
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Tuesday, March 17th, 2009
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” – Winston Churchill, November 10, 1942, describing the Allied victory at El Alamein in North Africa.
The Census Bureau reported this morning that retail sales in the United States, excluding autos and gasoline, rose sharply for the second consecutive month. The percentage increases were 1.4% in January and 0.5% in February. Sales of electronic equipment, clothing, sporting goods, books, and general merchandise have all risen this year. Gasoline sales are up as well, though mostly because of rising prices following the steep fall late last year. Automobile sales remain in the doldrums. Total vehicle sale in the US fell to an annualized rate of 6.4 million units, the lowest since 1981. 
Separately, the Labor Department announced that first-time applications for unemployment insurance remained above 600,000 for the sixth consecutive week. Initial claims of 654,000 brought the total number of Americans collecting unemployment compensation to an all-time high of 5,317,000.
The two-month rebound in retail sales marks one of the first hopeful economic signs in many months. Retail sales are the main driver of our economy and shopping is our national pastime. But, until initial unemployment claims begin to slow down, we won’t know if today’s report foreshadows a real or a false dawn.
Tags: community development, economic predictors, financial crisis, green banking, ShoreBank, triple bottom line, unemployment rate
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Tuesday, February 17th, 2009
You will read in the papers on see on TV that the official unemployment rate jumped from 7.2% in December to 7.6% in January. You will also learn that the economy shed 598,000 jobs in January and 1,772,000 during the last three months. What you are less likely to be told is that 17,873,000 Americans are out of work, and that the real unemployment rate, which includes those too discouraged to seek employment and part-time workers who want to work full time is 15.4%. Comparable figures for January 2008 are 10,804,000 and 9.9%. (At the height of the Great Depression, about 13 million Americans were unemployed, which then represented about a quarter of the workforce.)
The graph below shows the percentage of employed men going back to 1948. (I selected men only because the entrance of women into the workforce in large numbers beginning in the 1970s skews the long-term data. That’s not to say that changes in longevity and other societal forces don’t skew the data for men, just to a lesser degree.) The current percentage is the lowest on record and has dropped massively over the last three months. The non-seasonally adjusted unemployment rate for men 20 and older has jumped from 5.2% to 9.1%, while the rate for women has increased from 4.4% to 6.6%. It’s even worse for minorities. The unemployment rate for African-American men has increased from 9.2% to 15.8%. Unemployment among Hispanic males has risen from 6.2% to 9.4%. These data are the human cost of the huge declines in manufacturing and construction where men are more heavily represented. Health care and education are the only fields where employment has increased steadily, and here women are over-represented.
Tags: community development, economic predictors, green banking, ShoreBank, triple bottom line, unemployment rate
Posted in Banking Industry | 1 Comment »
Monday, December 15th, 2008
Messengers have little to fear when delivering good tidings, but no messenger wants to be the bearer of bad news. Yet the fact remains: we are a long way from victory as the scope of the Panic of 2008 emerges in its full gloom. We are in a consumer-led recession, where loss of wealth from eroding home values and plunging 401(k)s leads to loss of both the ability and the willingness to spend. Less spending leads to less employment, which leads to less wealth in a cycle that is beginning to turn vicious. Eventually the cycle will be broken, but that time isn’t now.
One of the key indicators I watch is the Bureau of Labor Statistics’ weekly count of the number of persons filing unemployment insurance claims for the first time. To be eligible for unemployment compensation a person must:
* Have worked during a one-year period.
* Be unemployed through no fault of his or her own.
* Be physically and mentally able to work.
* Be available for work.
* Be actively looking for work.
Over the last five weeks 2,678,000 Americans, an average of 536,000 a week, met these criteria and applied for unemployment benefits. Nothing like this has been seen since the major recession of the early 1980s. From September 1981 through June 1983, weekly initial unemployment claims averaged 543,000. They peaked at 695,000 in October 1982, and never were less than 434,000.
Today, 4,429,000 Americans are collecting unemployment benefits, compared to an average of 2,725,000 over the last 20 years. Looking back again to the early ‘80s, we see that continuing unemployment claims averaged 3,862,000 and topped out at 4,713,000 in November 1982.
Times were different then, and the enemy was rampant inflation. The Federal Reserve and the Treasury moved more slowly and less aggressively. But the message is that bad times are not going away soon. Keep an eye on weekly unemployment claims, released every Thursday morning for an early clue to a turnaround.
Tags: community development, economic predictors, financial crisis, green banking, ShoreBank, triple bottom line, unemployment rate
Posted in Banking Industry | 2 Comments »
