Monday, August 20, 2007

Unemployment Up Pretty Much Everywhere

Roaring hurricanes and the slowing economy, I'm a bringer of bad news all around. Can't help it. That's the facts for the day. MaxedOutMama has some news on employment and concludes with this interesting morsel:

Because of the drop in employment rate (i.e. workforce) in some states, unemployment rates and trends look better than they really are, and when one looks at the data in more detail a recent pattern of weakening is very evident. This is no doubt why the federal government has abruptly decided to enforce the laws against hiring illegal aliens. Last year employment was in a strong growth mode for much of the year. This year the trend is reversing itself. [emphasis added]
The government is trying to get rid of extra bodies so American citizens can do those jobs that Americans won't do.

Personally, I think the economy is going to get worse. My financial advisor's scorn for my "feelings" notwithstanding, I do have some reasons as to why.
  1. Home defaults are just beginning.
  2. Home values will decline forcing people to stay in homes they can barely afford.
  3. Without disposable income, credit card debt will increase, there will be an explosion of bankruptcies. Wait, that's already happening--they're up 48% over 2005.
  4. Profits will evaporate as spending stops. This hasn't happened yet, but it will.
  5. Unemployment will rise dramatically. See above.
Some see unsettling comparisons to 1987. Well, one doesn't have to be money genius to see the similarities in the graphs.

Being a good financial steward is ultimately boring, which is why no one likes to do it. Get a job. Pay your bills. Don't go in debt. Don't buy more than you need. Save for a rainy day. Diversify. Diversify. Diversify. It's advice you'd get from your Grandma.

She also says to eat your vegetables and no one does that either.

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