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Von Aldo

Belt Tightening?

As professional financial advisors, imagine telling a client --- who is suffering a severe drop in income --- to cut his spending by 0.0027 percent. Well, that's what Obama is essentially doing in asking his cabinet to find $100 million in spending cuts. That's right, in the private sector, citizens and businesses must adapt to economic forces. Whereas private payrolls are shrinking (since the recession started in December 2007, 5.1 million jobs have been lost), about 22.5 million people are employed by a government agency of some kind --- that's up by about 169,000 new government jobs, see a Bureau of Labor Statistics spreadsheet here. The BLS also points out that the federal government is the country's single largest employer, by the way.

Oh, and since we're on the subject of employment, the BLS reports in its April 3 report that employement in the "financial activities" sector has been taking a big hit (surprise). The report says, "Employment in financial activities continued to decline in March (-43,000). The number of jobs in this industry has dropped by 495,000 since an employment peak in December 2006. More than half of this loss occurred in the past 7 months. In March, job losses occurred in credit intermediation (-15,000); real estate (-12,000); and securities, commodity contracts, and investments (-7,000)."

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