(ThyBlackMan.com) Looking at February’s unemployment rate, a good question comes to mind…Is this the beginning of an upward trend of the national unemployment rate or is this number an aberration? With the announcement of the national unemployment rate of 6.7%, the Bureau of Labor Statistics also revealed another number of equal importance. The number of jobs created by the national economy in February was 175,000. The talking heads on cable television hailed these two numbers as being good news. Incredible as it may seem, an increase in unemployment and the creation of 175,000 jobs when this economy needs to create 250,000 to 300,000 jobs monthly is considered good news.
It appears now that up is down and down is up. The talking heads said these numbers are a harbinger of good things to come and the economy is entering a stage where it is ready to take off. They highly anticipate April and May will be the months to look toward when the economy will create 250,000 to 300,000 jobs. Note, they are saying this even as the Federal Reserve Bank (Fed) is withdrawing easy money from the economy, after having provided low interest rated money since 2008, through its Quantitative Easing (QE) program (https://thyblackman.com/2014/01/30/easy-money-being-drawn-out-of-the-economy/ ).
Looking back over the years of 2013, 2012, and 2011, with easy money in vogue, the Fed’s QE program never generated an average of more than 
194,000 jobs monthly in any of those given years, and this is after the numbers were revamped to reflect increased job creation. Additionally, corporations used the period of low interest rates to shore up their balance sheets and buy back stock (less stock in the market means higher priced stock) rather than invest in new equipment and hiring. Therefore, you have to ask yourself, with easy, cheap money being withdrawn from the economy and corporations not investing in new hires, what is going to be the origin of the up-tick in job creation to 250,000 to 300,000 monthly? Are these new jobs suddenly going to materialize out of nowhere?
The fundamentals are not in place to support such a theory of expansion. With the continued withdrawal of cheap money from the economy, interest rates will inevitably move higher, even though the Fed has pledged to keep interest rates low. After all, the QE program is credited with keeping long-term interest rates low. That program is now slowly going away as the Fed’s bond purchases of $85 billion dollars a month is reduced at a rate of $10 billion dollars monthly. The tapering started in December, and those who are knowledgeable about the Fed’s operations have said it will continue its withdrawal in spite of the up-tick in the unemployment rate.
Corporations see no problems with slightly higher interest rates. They are prepared. Most are in better shape financially than they were prior to the 2008 downturn. Moreover, most households are too, as those who could, refinanced their high interest rated mortgages and credit card debt to lower interest rates. The next three months are critical in revealing who is right and which way the economy is going to go.
What will the Fed do if the 250,000 to 300,000 jobs do not materialize (https://thyblackman.com/2014/01/14/tough-economic-times-aheadand-not-just-for-blacks/)? Can it afford to continue to print more money to buy bonds without losing credibility? Will it stop tapering?
In the meantime, the unemployment rate for black men moved higher to 12.9% from 12.0%. Black women saw their rate drop to 9.9% from 10.4% in February. The 9.9% number places black women in single digits and is the lowest rate of unemployment for black women since the Great Recession ended in June, 2009. The overall rate of black unemployment decreased to 12.0% from 12.1%, while the overall rate of white unemployment ticked up to 5.8% from 5.7%. Go to http://www.Jobcreationnow.com and click on the topic “Behind the Numbers” to get full and complete details about the February unemployment numbers. And so it goes…
Staff Writer; James Davis
More information about JD and his Deficit Neutral Stimulus Plan Can be founded at http://www.sslumpsum.com.
One may also pick up this “brother” latest book which is entitled; Hey…God’s Talking To You The Study Book.
