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Thread: 824,000 US jobs will 'disappear' this Friday ( 2/5 )

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    Default 824,000 US jobs will 'disappear' this Friday ( 2/5 )

    (snip)" When the gov't releases Friday's unemployment report, nearly a million jobs could be erased. The change won't show up in the monthly report. Rather, the expected drop will show up in the gov'ts Revised Job Losses from April 2008 through March 2009"(snip)

    (snip)"The revision comes every February. But this one, originally projected by the Labor Dep't to be minus 824,000, will be the biggest in 18 years.

    Blame the 'birth / death" model for the revisions"(snip)

    (snip)"Despite the big revision stemming from the birth / death model, the Labor Dep't says 'there are no changes to the current modeling technique scheduled at this time"

    That leaves economists and the rest of us to wonder what the error rate is from April 2009 onward - numbers that won't be revised until February of 2011. What we do know is the birth / death model has generated hundreds of thousands of jobs since April of last year - jobs that may get revised away in the final analysis"(snip)

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    Default Re: 824,000 US jobs will 'disappear' this Friday ( 2/5 )

    ^^^ and while the above news story deals with the 'errors' in official US gov't unemployment statistics, the following news story deals with the reality of future US employment opportunities.


    (snip)"The latest moves are accelerating the U.S. manufacturing economy's longer-term shrinkage, as well as its shift away from heavy sectors, such as automobiles and basic chemicals, toward higher-tech products like super-fast computer chips. In some cases, as with auto makers, companies are stripping down to adjust to diminished U.S. demand or investing in smaller, more-efficient facilities. In other cases, as with chemical makers, they are relocating labor-intensive operations to countries where wages are cheaper.

    During 2009, the nation's capacity to produce motor vehicles and chemicals fell 4.4% and 1.7%, respectively, the largest such declines since at least 1949, according to Federal Reserve estimates. Its capacity to produce semiconductors, by contrast, grew an estimated 10.4%. Overall, U.S. industrial capacity fell by an estimated 1% in 2009, the largest year-to-year decline on record, while goods-producing businesses shed more than 2.3 million jobs.

    As a result, economists expect unemployment to remain high for many years as millions of American workers in the hardest-hit sectors struggle to find new jobs. And while some economists see the restructuring as necessary to make U.S. industry leaner and more profitable, others worry that the sheer scope of the cutbacks could doom companies that ought to survive.

    "The earthquake that we felt was so big, and the aftershocks so strong, that we could easily destroy perfectly good manufacturers that are crucial in the supply chain," such as auto-parts makers that supply the entire industry, said Diane Swonk, chief economist at Mesirow Financial in Chicago. "That's the great danger, and it's still a risk."

    The restructuring now under way offers insights into what kinds of goods the U.S. should produce, and in what volumes. In industries such as automobiles, housing and appliances, the move to shed capacity is at least partly correcting distortions that built up over many years of easy credit and profligate consumer spending. Now, companies are adjusting to lower demand.

    Whirpool's Mr. Fettig, for example, said his company will "take out more" capacity in 2010, after shutting down some five million units in yearly capacity over the past 15 months -- including a factory in Evansville, Ind., that produced refrigerators and ice makers. Ford Motor Co. Chief Executive Alan Mulally forecast total U.S. auto and truck sales at between 11.5 million and 12.5 million units in 2010, far below their recent peak of 17.5 million in 2005.

    For chemical makers, the recession has intensified an exodus from the U.S. that has been going on for at least a decade, amid rising energy costs, environmental concerns and growing demand in developing countries. In the past year, Dow Chemical, has closed, or announced plans to close, six plants producing ethylene-related chemicals in Louisiana and Texas.

    "The chemical industry is leaving the United States, and it won't be back," said Peter Huntsman, chief executive of Texas-based chemical giant Huntsman Corp., which plans to report fourth-quarter earnings on Feb 19. "When demand picks back up, they'll build new capacity overseas -- in the Middle East, Singapore and China."

    Huntsman, he said, is expanding its capacity in the Mideast and China to make chemicals used in products like insulation and high-speed railway construction. It now has about a third of its capacity in the U.S., down from more than four-fifths a decade ago. That capacity is increasingly focused on producing more-specialized chemicals, such as epoxies that can be used in building airplanes.

    The situation is different for semiconductor makers, which saw U.S. demand recover sharply as computer makers scrambled to catch up with a spurt of business investment toward the end of 2009. Intel, which produces chips in Chandler, Ariz., Rio Rancho, N.M. and Hillsboro, Ore., boosted its capital investments to $1.08 billion in the fourth quarter, up 15% from the previous quarter and part of a two-year, $7 billion program to upgrade its U.S. plants.

    A large chunk of semiconductor production takes place abroad, but many companies still prefer to produce in the U.S., particularly if their manufacturing entails little human labor or is highly complex. Being close to the U.S.-based design centers of major chip users like computer maker Dell Inc. and consumer-electronics maker Apple Inc. also can be an advantage.

    "This is a kind of manufacturing that will make sense to do in the U.S. for a long time to come," said Tim Peddecord, chief executive of privately held memory-module producer Avant Technology, which recently opened a new 50,000-square-foot plant in Pflugerville, Texas. The new plant will boost the company's capacity to 800,000 modules a month from 500,000.

    Mr. Peddecord said his company is bulking up after a shakeout that drove many rivals out of business. Manufacturing in the U.S., he said, allows Avant to turn around U.S. orders in 24 hours, an advantage in an industry where demand is volatile and clients try to keep inventories low. In addition, the reduced freight costs, compared with shipping goods from China, can offset the added cost of U.S. labor, since labor accounts for less than a hundredth of his average sales price."(snip)

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    Default Re: 824,000 US jobs will 'disappear' this Friday ( 2/5 )

    Rats ! You beat me to it again. I was just about to add to the "Real Unemployment Rate" thread when I saw this.

    With regard to your second post it's even worse. Thanks to Obama and the Dems and their dumb energy policy, a lot of jobs will never be created. Oil-drilling is fairly labor intensive but Interior Secretary Salazar won't expand drilling on Federal land. Nothing has been done to further the "Pickens Plan" which would create thousands of jobs installing wind turbines. Nuclear power plants require hundreds of construction workers. Not a single new one has been approved. Refinery expansion ? Forget it. Any plans to require that new Federal vehicles run on natural gas ? Nope. How about state and local vehicles bought with Federal stimulus money ? Not yet.

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    Default Re: 824,000 US jobs will 'disappear' this Friday ( 2/5 )

    Plenty of plans to punish people for using their vehicles though. Increasing tolls, plans to eliminate free parking, congestion charges, etc.

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    Default Re: 824,000 US jobs will 'disappear' this Friday ( 2/5 )

    Actually I was more surprised to hear about the latest 'strategy' by private sector companies i.e. chemicals, auto etc. being spelled out in detail. They are closing US facilities to keep pace with falling US / regional demand, but are positioning themselves to meet recovering demand via new facilities in China, Singapore etc. They also spelled out in detail two reasons for the US plant closing ... high mandatory US labor costs, and high environmental compliance costs.

    It was partially encouraging to read that some very high value added products will continue to be made in the USA ... or even expanded. However, they spelled out very clearly that this was the direct result of US labor content being a tiny fraction of the total product cost ( i.e. the 1% labor content example re the chipmaker ). This does not bode well for the future employment of some 60% of Americans who are unqualified for such jobs ... and who arguably lack the math / science basics to even be trainable for such jobs given a reasonable amount of time and effort on the part of prospective high value added employers. It also does not bode well for those US businesses who are not in a position to be able to borrow millions and millions of dollars at near zero interest rates to purchase the high tech labor saving capital machinery necessary to lower the US labor content requirement of their end product to the point where manufacturing in the USA is economically feasible.

    As to current gov't policy that might have allowed the creation of high paying but less than high tech qualification jobs re new oil and gas wells, re new nuclear plant construction, re new refineries etc. this is not the least bit surprising. After all, these industries are privately owned, privately financed, profitable, and actually create more 'value' in their end product than the input costs necessary to produce it !

    However, we WILL get new jobs related to gov't funded and gov't subsidized (until eternity) high speed light rail extensions of Amtrak !

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