Sunday, January 30, 2011

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Black Economic and Business News

State of the Union Review: An adult speech for difficult times

An adult speech for difficult times

The president’s state of the union address was a refreshing discussion of economic truth in these tough times. America is facing a changed economic environment: the rate of innovation and technical change have slowed while the globalization has moved manufacturing and IT jobs overseas. He chose these tough times to discuss the america’s economic future in three broad categories: Innovation, education and infrastructure investment. Mr. Obama liked all of these ideas under the theme: “Winning the future.”

He opened with remarks on the shooting in Tucson. He then moved on to talk about bi-partisan cooperation. He referenced the success of the lame-duck session in passing several pieces of legislation. Then, getting down to business, he described the changing the jobs climate the American worker faced. “The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business.” The US is completing in a globalized world against India and China.

We need to out-innovate, out-educate, and out-build the rest of the world. (Applause.) We have to make America the best place on Earth to do business.
He hinted that we must compete for jobs and industries which in the past would have been handled by US industry.

So how will the US win the future ? President Obama proposed programs in there areas.
Encourage American innovation with new programs for biomedical research, information technology and clean energy. The new investments will be paid for by eliminating subsidies for the oil companies. An additional goals is by 2035 , 80 percent of the America’s energy will come from clean energy.

Educate our kids. Prepare 100,000 teachers in science, technology, engineering and math. And reform immigration to keep educated kids in the country
Thirdly, rebuild America – Repair crumbling bridges and roads. Invest in high speed rail.

He proposed several miscellaneous programs…

1. Improve the business tax system by eliminating loopholes and deducations.
2. Have congress pass the Korean free trade agreement. Add new free trade agreements with Panama and Columbia.
3. Reduce the deficit. Freeze domestic spending for five years . However, he noted, he would affect on only 12 percent of the budget. Real budget reductions require cuts in domestic spending, defense spending, health–care spending and reducing tax subsidies.
4. Reorganize the federal government

And some programs he opposed…

1. He continues to oppose to extending tax cuts for the rich.
2. He restated that he is unwilling to change the healthcare bill, “so let’s move on.”

He discussed the war in Iraq and Afghanistan.

Nearing the end of his speech, he covered some real life examples of American perseverance. Then finally, he ended with a call for the US to move forward. To loosely paraphrase the president, “We have work ahead, but we do big things.”

Sunday, January 16, 2011

Black Economic and Business News

The Evil Black Economist Blog has a sister blog, Black Economic and Business News, with links to the news paper and research articles used for commentary.

Please visit Black Economic and Business News.

Friday, January 14, 2011

ADP December jobs report

ADP, the largest payroll processor in the United States, released its’ employment report on Wednesday, Jan 5th, 2011 which showed an increase of 297,000 jobs created between November and December. September showed a gain of 29,000; October gained 79,000 and November increased 92,000. Most of the increase, 270,000 jobs was in the service sector. ADP also provides data by firm size: Firms with more than 500 employees added 36,000 workers; firms with 50 to 499 employees added 144,000 and firms with fewer than 50 employees added 117,000.

There are some interesting points here.

One, how can the difference between the BLS and the ADP report be so large.

Two, The job growth is mostly in the middle sector.

Another worrisome jobs report: Unemployment drops for the wrong reason

The US Bureau of Labor Statistics announced on Friday, January 7th, 2011 the results of the December household and establishment employment survey. The general unemployment rate dropped unexpectedly to 9.4% of the labor force. Non-Farm payroll grew by 103,000 jobs. The biggest gains were in health care and leisure and hospitality.

The lower rate was based on 123,000 workers who have dropped out of the labor force in December. The labor participation rate was 64.3% overall down from 64.7 a year ago. Between December 2009 and December 2010 the working age population increased from 236.9 million people to it was 238.9 million: about a 1.95 million increase. However the number of people participating in the labor market increased only 500K a difference of 1.45 million. In other words 1.5 million people dropped out of the labor market.

The economy grew less than expected adding only 103,000 jobs. Many economists expected around 140K – 150K jobs. In addition, most of the jobs came from the retail section which is heavy influenced by seasonal trend. Private payrolls added 113,000 jobs while government dropped 10K.

Here us a graph of Non-Farm Payroll since the recession.

The economy is still "short" 7 million jobs from the beginning of the recession.

While the the general unemployment rate dropped 0.4%, the Black Unemployment rate was little changed at 15.8%. The rate for Hispanics was 13.0%.

The Non Farm Payroll employment numbers showed an increase of 103,000 jobs. Job gains in private services were slighty offset by a 10,000 job decrease in the government sector and a loss of 2,000 in manufacturing.

Average unemployment duration also increased. The average was 34.2 weeks and increase of 0.3 weeks and the median (half under / half over) increased 0.7 weeks to 22.4 weeks. 6.4 Million people (44% of the total) were out of work for more than 27 weeks. The figure also represents a jump of 113,000 in the long-term unemployed.

There are other revealing statistics: The number of people working part time for economic reasons was approximately 8.9 million. The number of discouraged workers increased from 1.28 million to 1.32 million (about 40,000). Discouraged workers have increase 389,000 since the same period last year. Discouraged workers are people who have not looked in the past 4 weeks because they believe no work is available, could not find work, lack training or employer discrimination. Part-time for economic reasons” workers dropped by 29,000.

Of related interest, ADP, released it’s employment report on Wednesday, Jan 5th, 2011 which showed an increase of 297,000 jobs created between November and December. Economist believe employment must grow by 150,000 jobs to keep up with population growth. However, most models have fixed labor participation rates.


Monday, January 3, 2011

Reverse 90 Campaign by Philly African-American Chamber of Commerce

The Philadelphia African American Chamber of Commerce is promoting Black Businesses to Black consumers. The program is name for the 90 percent of African Americans who do not patronize Black businesses. The official website is here.

The site advertises businesses that agree to give discounts and deals to customers offered though the website. I counted five restaurants and and thirteen retail shops currently listed.

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