The genius of American business for doing more with less has been evident in the parade of earnings reports showing profits improving far more than the revenue that produces them. The secret: Productivity soared at a 9.5% annual rate in the third quarter, a stunning increase that was nearly half again as much as economists had projected. Business cut labor costs at a 5.2% annual rate, with total hours falling at a 5% pace. Fewer workers worked fewer hours.
But for the laborers, it's been another story entirely. The unemployment rate shot up to 10.2% in October, the highest since 1983, when we were coming out of what had been the worst recession of the post-World War II era. Even the doleful double-digit rate understates the joblessness; more folks are dropping out of the labor force or are among those having to work part-time involuntarily. If you add them to the army of the unemployed, you get what the bean-counters euphemistically call an "underemployment rate" of 17.5% last month, up a full half-percentage point from September.
...the sunny-side-up contingent is quite willing to ignore the storm clouds apparent to everybody else. As they see it, "only" 190,000 workers were offloaded from payrolls in October, less than a third of the sackings early in the year. The payroll data come from a survey of businesses, different from the household survey that produces unemployment numbers. But the household survey has found about a half-million folks lost jobs in each of the past three months, more than twice as many as the establishment survey.
--- RANDALL FORSYTH, Barrons, 11.09
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