Monday, October 15, 2012

Peter Schiff: We are losing the jobs we need and gaining the ones we don’t

American investment expert Peter Schiff made an analysis of the jobs numbers for September that the US government has published recently. According to the financial guru, the situation with the unemployment in the States is not as bright as the authorities try to prove.

The US gained 114,000 jobs on the month, but 10,000 of them were government positions while there was a loss of 16,000 manufacturing jobs in September. "We are losing the jobs we need and gaining the ones we don’t," commented Schiff and added that the USA do not need more people working for the government, as they derive their salaries from the private sector.

Peter Schiff explained that the increase of the government jobs is not that good, because these are non-productive and they actually make USA poorer as a nation because they add to the overall tax burden and trade deficit. According to Mr. Schiff, the government employees create an imbalance in economy. The reason for this is that they do not produce anything, which will force the jobs to be lost when the economy restructures. And the reasonable question is in that case, how was the unemployment rate able to fall so rapidly?

According to a household survey, 873,000 jobs were added in September. These numbers are the largest of its kind in nearly 30 years. Schiff adds the caveat that a large number of these were part-time employment. Mr. Schiff goes on to rather bluntly hypothesize that the massive jump in part-time work came from those who have finally used up unemployment and were forced to go out and find some kind of work.

The U-6 unemployment rate, a much more effective measure of our actual employment, was virtually unchanged for the month, staying a tick under 15%. Just another reason that we all need to take official unemployment numbers with a grain of salt. With the approach of the holiday season, part-time work will spike and could potentially decrease the unemployment figure even further, which is not a real indicator of the unemployment rates fall.

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