By Joe Palumbo
There are those of us who remember that old song: “Yes! We Have No Bananas.” We are getting the same kind of double talk from Washington in the latest employment report figures.
Here is what Washington is telling us: July marked the sixth straight month of decline for the U.S economy in jobs with July banging in at an additional loss of 44,000 jobs.
With the very same breath, Washington says the nation’s unemployment rate also declined to an approximate 6 1/4 percent. Isn’t that amazing!
Our unemployment rate is going down despite the fact that more jobs continue to be lost. So how can that be you may ask? It’s because the government is conveniently blotting out those who have reached such a point of frustration in the inability to find employment that they have just stopped looking.
If you factor in the many discouraged who have stopped looking, the unemployment rate in June for example would be over 10 1/2 percent. Corporate America appears to be geared toward squeezing more out of its remaining workers in lieu of hiring. It’s actually great for productivity and profits but it will have an inevitable consumer backlash effect. With less jobs will come less discretionary spending leading to lower sales.
Competition will heighten for market share leading to lower prices and lower earnings. And we know what lower earnings did to Wall Street over these past three years. And what about jobs right here in Queens? Jacky Clyman of Avirex in Long Island City says there are no openings there. Graceann of British West Indian Airways in Forest Hills said the airline not only had no openings at this time but also had to let some people go. Jimmy of Maria's Trattoria, a restaurant in Bayside, said there were no openings.
One bright side was Mike the Glazier in downtown Flushing. Lance Lerner told me that they have no openings but will always make room for experience. If you are a good installer, do see Lance.
So how's business relative to the job market? An aggressive and serious concern must be taken in halting the decline of jobs in this country. It’s a real dangerous Humpty Dumpty issue leaning over the wall. And without priority given to this existing danger all the king's horses (tax cuts) and all the king's men (low interest rates) will not be able to save Humpty Dumpty. Failure to both address and rectify this issue may make a reality of the joke that Humpty Dumpty was pushed!
Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718 461 8317.
