U.S. Jobs Creation = Running in Place

The equity markets were atwitter after the release of unemployment numbers on Friday, but the chief economist of the U.S. Department of the Treasury (and assistant secretary for economic policy) Alan Krueger insisted that the U.S. economy will nevertheless grow 3 percent in 2010.

July 6, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user Alex E. Proimos

The equity markets were atwitter after the release of unemployment numbers on Friday, but the chief economist of the U.S. Department of the Treasury (and assistant secretary for economic policy) Alan Krueger insisted that the U.S. economy will nevertheless grow 3 percent in 2010. “It seems to me that our forecast, which is at 3.0 percent growth this year, and then a rise in GDP growth next year, is looking pretty good,” Krueger said during a briefing after the June jobs numbers were announced.

Those numbers recorded that some 125,000 nonfarm jobs evaporated in June, but all of those and then some were because of the demobilization of Census Bureau enumerators whose hiring had bumped up the total in April. The non-Census private sector added 83,000 jobs during June, a “better than nothing” figure but not enough to keep up with U.S. population growth.

The Bureau of Labor Statistics also publishes a lesser-known employment benchmark it describes as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” That figure edged down from 16.6 percent in May to 16.5 percent in June. Employment, it would seem, is treading water for now.

U.S. Bankruptcies to Total 1.6M This Year

According to the American Bankruptcy Institute, U.S. consumer bankruptcy filings rose 14 percent in the first half of 2010, compared with the same period in 2009. All together during the first six months of this year, some 770,117 Americans filed for one or another of the kinds of bankruptcy.

Although the number of monthly consumer bankruptcy filings has been steadily decreasing since March, filings for the first half of 2010 still represent the highest total since 2005, when Congress toughed up the process at the behest of creditors. The overall June consumer bankruptcy filing total was 8.5 percent more than in June 2009, but it was a 7.8 percent decrease from the May 2010 total.

“Years of rising consumer debt and low savings rates, combined with the housing and unemployment crises, are causing bankruptcy levels not seen since the 2005 amendments to the bankruptcy code,” said ABI executive director Samuel J. Gerdano in a statement on Friday. “We expect that there will be more than 1.6 million new bankruptcy filings by year end.”

Office Vacancies Back at Early ’90s Levels

The stubbornly persistent unemployment totals affect office properties more directly than any other property type, and according to Reis Inc., the nationwide vacancy rate for offices stood at 17.4 percent in 2Q10. During the same quarter in 2009, the average was 16 percent. The rate hasn’t been that high since 1993, during the waning days of the early ’90s real estate depression.

For those tenants who are looking for space, the market is theirs. Also according to the Reis report, effectively rents in 2Q10 were down 5.7 percent from the same quarter in 2009.

Wall Street, which was closed on Monday for the Independence Day holiday, spent most of Friday declining. In the end, however, the Dow Jones Industrial Average lost 46.06 points, or 0.47 percent, and the S&P was down 0.47 percent as well. The Nasdaq declined 0.46 percent.