The share of working-age Americans who are employed or at least looking for a job sank to the lowest rate since October 1977.+ READ ARTICLE
U.S. job growth slowed in June and Americans left the labor force in droves, according to a government report on Thursday that could tamper expectations for a September interest rate hike from the Federal Reserve.
Nonfarm payrolls increased 223,000 last month, the Labor Department said. Adding to the report’s soft note, April and May data was revised to show 60,000 fewer jobs were added than previously reported.
With 432,000 people dropping out of the labor force, the unemployment rate fell two-tenths of a percentage point to 5.3%, the lowest since April 2008.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell to 62.6%, the weakest since October 1977. The participation rate had touched a four month high of 62.9% in May.
In addition, average hourly earnings were unchanged, taking the year-on-year increase to a tepid 2.0%.
Forget abut YOLO.
We are all guilty of telling ourselves little white lies on a daily basis. Anything from “One more slice of cake won’t make a difference,” to “There’s time to watch one more episode before bed.” However, some of the lies we tell ourselves about money, especially if we’re short on it, can be very harmful.
They are the lies that keep us in debt, and stop us from living the life we really want to live. Here are 10 of the biggest lies that struggling people tell themselves week after week — and that successful people never tell themselves.
1. “I Really Need It!”
We need to separate the want from the need. Do any of us really need the latest smartphone? Do we need to dine out every Friday night? Do we need a $40,000 wedding? (No one does.) Do we need new clothes? And if we do need new clothes, do they need to be brand new, or can they come from a thrift store?
We will convince ourselves, through a series of pep talks and excuses, that we really need to have something. But often, we just want it. People who are good with money will know the difference between what they need, and what they want, and if they cannot afford it, they won’t get it.
2. “Credit is FREE Money!”
No, it’s not. Credit is actually more expensive money, if you really want to analyze it. Almost all credit comes with an annual APR, so when you borrow money, be it on a credit card, a loan, or any other form of credit, you are entering into a contract to pay back the money you borrow plus interest. Some people think that by getting out a bunch of credit cards, they are helping themselves to a ton of free money. But those bills will have to be paid at some point, and the interest will be accumulating until it’s paid off. This also leads into another huge lie…
3. “I Can Only Afford to Pay the Minimum.”
Actually, none of us can really afford to pay only the minimum on credit cards and loans. The interest quickly racks up on any debt you incur, and by paying the minimum you are spending it almost entirely on paying off that monthly interest charge. That means very little, if any, of the money we pay back on a loan gets applied to the principal. For instance, if we have $5000 on a credit card with an 11.9% interest rate, and pay $100 a month on that card, it will take 70 months to pay it off. We will have paid almost $2000 in interest. By doubling that payment to $200 a month, it takes just 29 months, and we pay only $775 in interest.
4. “I’m Never Going to Have Any Money Anyway.”
Says who? There are many examples of people who came from nothing and made fortunes; Oprah Winfrey is perhaps the most famous example of that. If we continue to tell ourselves that we won’t be successful, or we are destined to be financially challenged, then it becomes a self-fulfilling prophecy. By thinking positive, we can at least start to get out of that rut and make opportunities for ourselves.
5. “I Have to Buy It; It’s on Sale.”
There are several ways to look at sales. They can be opportunities to save money, or even make money. By all means, we should shop the sales when we are looking for a specific item. However, buying something when it’s on sale just because it is on sale is a terrible way to waste money.
If we buy something, for instance a blender, for $60 because it is reduced by $20, we think we’ve saved money. But if we didn’t really need a new blender (remember the need vs. want argument) we haven’t saved $20 at all…we’ve spent $60. It can get even worse when we buy lots of sale items simply because we like the feeling we get of saving money. We cannot fall into that trap. Unless we really need something, or can see a way to buy and sell at a profit, we should all avoid those sales like the plague.
6. “Everyone Has a Car Payment.”
Ask around at work. Ask your friends, and family. You will find out that some people have small car payments, other have huge car payments, and some have no payments at all. The ones who don’t have a payment are smart. They either paid off their car in one lump sum, or made monthly payments until it was paid in full, and then kept the car. We all get tempted by the latest models, and as few of us can afford to drop $25,000 to $30,000 on a shiny new car, we opt for a monthly bill. But that monthly bill comes at a cost greater than money. It’s taking away from money we could be putting into a savings account, or spending on experiences like vacations or education.
7. “I’ve Earned It.”
“I worked really hard this week, I’ve earned this $5 cup of coffee.” “I worked an extra shift, I definitely earned this new outfit.” We are all guilty of this kind of thinking. We work hard, we feel like we earned the rewards that come from those endeavors. However, what are those little treats really costing us?
A $5 cup of coffee every day is around $150 a month. That’s $1800 every year. What could that money buy us, especially when we can make a decent cup of coffee at home for just pennies? What we have really earned is the chance to have a better life, and we’re cheating ourselves out of it by spending money on frivolous things just because they give us a few extra minutes of pleasure.
8. “It’s Only Money.”
That’s a little like saying “It’s only oxygen.” We need money to live (unless we have found a way to survive without it, which is rare to say the least). That kind of blasé attitude to money is what keeps poor people poor; rich people never think that way about money. It shows a complete lack of respect for the currency that we need to live on, and if we spend like there’s no tomorrow, guess what…tomorrow is going to suck. Money may not bring us happiness, but a lack of it can certainly make us very unhappy, and even unhealthy.
9. “I’m Not Gonna Live Forever.”
Add “You only live once (YOLO)” to that, and “Spend it while you’re young enough to enjoy it.” The problem with that kind of thinking is that the money runs out, the debt piles up, and we are committing ourselves to a future of worry, stress, and life without any kind of comfort. Humans are living longer lives. We may not live forever (yet) but we need to live like there’s a long future ahead of us, and save accordingly.
10. “Something Will Turn Up.”
Relying on luck to change our fortunes is foolhardy. Yes, something may very well turn up out of the blue. We may buy a lottery ticket and win millions. The chances of it happening are microscopic, but it could happen. We may also get a massive promotion at work, out of the blue. However, most of the time we create our own luck. We need to make sure that we’re working towards a way to grasp opportunities when they present themselves, or the things that “turn up” could include unexpected medical bills, unemployment, or bankruptcy.
More from Wise Bread:
Be there in a productive way
It can’t be easy watching your beloved, talented, educated money pit child walk off that graduation stage, diploma in hand…and move back home with no job prospects. Last summer when I graduated with a couple of freelance jobs but looking for something full-time, I was lucky that my parents mostly employed the strategy they had been using with me since the fourth grade: “She’s got it.” They were always supportive but never pestered me about what progress I had made that day, where I was applying, who I had reached out to, because they knew I was on top it. And guess what? Their trust in me gave me much more confidence in my job search than constant nagging would have.
Any expert and anyone who has been there can tell you that self-esteem is the thing that takes the biggest hit during unemployment. Trust me, your kids are just as eager to find a job as you are for them to have one. They know you’ve just spent thousands of dollars on their education, and (I hope) they are endlessly grateful. They desperately want to have an answer to the question, “Where are you working?” Social media is there with unrelenting reminders of what isn’t true but certainly feels like it is: “EVERYONE HAS A JOB EXCEPT YOU, LOSER.” In short, they’re downright terrified. (For confirmation on that, just read this piece I wrote last year, “Fears of a New Graduate.”) From talking to many friends who have been through this difficult situation with their parents in the past year, here is some friendly advice for being there for your child in a productive way during the job search.
1. Don’t micromanage.
You know your kid, and maybe he or she is someone who needs an extra push to get things done. But either way, trying to micromanage your adult child’s career is ill-advised. I just read a truly horrifying anecdote in Aliza Licht’s new book Leave Your Mark about an insistent mother who called DKNY repeatedly seeking a job for her daughter. She literally sent an email with the subject line, “A job for my daughter.” While I doubt that most parents reach that degree of desperation (God I hope), it is an extreme illustration of the difficulty in watching your college graduate look for a job, and your natural desire to help in any way possible. Don’t go down that path. At this point, the kids are officially raised—you have to trust they’re equipped to find a job on their own.
2. Trust their unconventional choices.
I have written about nine successful millennials who did something after graduation other than start a full-time job. Your child’s career path might not look like you expected it to. In fact it almost certainly won’t, given the rapidly changing job market. One of my friends said one of the things he appreciated most about his parents was that they never questioned his unusual career choices, in particular one summer when he took an internship at Sesame Street. This may have seemed crazy at the time, but the internship turned out to be an eye-opening experience that motivated him to go to law school. The paths to success are many, and multiplying every day.
3. Be realistic in your expectations.
When that same friend found himself applying to law schools two years later, his dad insisted that he apply to all of the Ivy Leagues, despite my friend explaining that his GPA was below the threshold they even considered. Not very productive. This goes double for your sons and daughters seeking jobs right now. Sure, it’s getting better, but it’s tough out there. You can’t expect them to send applications one week, have an interview the next, and be sitting down at their new desk the week after that. Asking, “have you heard anything yet?” every day will only make them frustrated and demoralized. You also can’t expect them to be searching for a job eight hours a day–yes finding a job is a full-time job, but other goals or even social events can be equally essential.
4. Don’t throw their financial status in their faces.
I’m not in a position to tell anyone how to parent, but I am in a position to determine whether someone is being rude. If you agreed to let your child live in your house and they are obeying the terms of that agreement, it is unfair and wrong to throw that fact back in their face if they are clearly making an effort to find a job. Yes, they live in your house again and you’re allowed to impose whatever rules you see fit. You can make them do the dishes every day, shovel the driveway, hand wash your unmentionables, whatever. But using “well you’re living here for free!” as an angry or passive aggressive jab is not only cruel but insanely counter-productive. (Pro tip: Making someone feel like a loser is not conducive to that person rocking an interview and landing a job).
5. Don’t make comparisons to “when I graduated.”
“When I graduated I had four six-figure offers…” Stop right there. You’re different people, you have different paths in life. But even if your child is in the exact same profession as you, that comparison is flat out untenable. Most millennials graduated during the worst economic downturn since the Great Depression, and this year’s graduates are still feeling its effects. During our Great Recession, the unemployment rate for those over 34 peaked at about eight percent, but unemployment between the ages of 18 and 34 peaked at 14 percent in 2010 and remains elevated. According to Pew Research we are the first generation ever to have higher levels of student loan debt, poverty and unemployment, and lower levels of wealth and personal income than their two immediate predecessor generations had at the same age. We all know it’s not the same, so don’t make the mistake of acting like it is.
6. Support them, love them…
…in the same way you’ve been doing for the past 22 years. Thanks for that by the way. I hope that I speak for my generation when I say that we appreciate it more than you know.
More from Levo.com:
The overall economy added 280,000 new jobs last month, but 77% of them were in these fields.
Despite unemployment remaining steady in May, the economy still produced 280,000 new jobs, beating the average monthly gain of 251,000 from the past year, the Bureau of Labor Statistics reported Friday. Since March, jobs have increased by an average of 207,000 per month.
Huzzah for you, job seeker. Your chance for a new gig continues to improve.
Of course, you’ll have an even better shot if you concentrate your search in these five fields‑-which accounted for three quarters of the new job growth last month:
1. Professional and business services
Jobs added in May: 63,000
Jobs added past 12 months: 671,000
Particular growth areas: computer systems design and related services, temporary help services, management and technical consulting services and architectural and engineering services
2. Leisure and hospitality
Jobs added in May: 57,000
Jobs added past 12 months: 57,000
Particular growth areas: arts, entertainment and recreation
3. Health care
Jobs added in May: 47,000
Jobs added past 12 months: 408,000
Particular growth areas: Ambulatory care services (which includes home health care services and outpatient care centers) and hospitals.
Jobs added: 31,000
Jobs added past 12 months: 288,000
Particular growth areas: automobile dealers
Jobs added: 17,000
Jobs added past 12 months: 273,000
Particular growth areas: none specified
More from Monster.com:
A look at the monthly employment reports and what they mean.+ READ ARTICLE
The unemployment rate can often be used as a measure of how tough or easy it may be to get a job at a certain time. That one number, however, paints a picture that’s a little too simplistic. The unemployment rate fails to include people who have given up looking for work and those who consider themselves underemployed. To get a clearer picture, look at the employment growth number and the unemployment rate together.
A big chunk of workers are yearning for more hours, raise or no raise.
More than one-third of American workers would be willing to work longer hours without a raise, according to a new Federal Reserve report.
The report, which surveyed nearly 6,000 individuals about their financial well-being, found 36% of respondents would prefer to work more hours at their currently hourly wage. Another 58% of respondents said they are happy with the number of hours they currently work, while 5% wished they could work fewer hours.
While those who took the survey were not necessarily hourly workers, a Federal Reserve spokesperson said the question is a general proxy for whether employees would be willing to work longer for higher pay.
As Bloomberg notes, the Federal Reserve’s findings may help explain why inflation-adjusted wages have remained essentially flat, even as the economy has improved.
“When [Federal Reserve Chair Janet Yellen] says that the unemployment rate probably does not fully capture the extent of slack in the labor market, this is exactly what she’s talking about,” said Thomas Simons, a money-market economist at Jefferies LLC, in an email to Bloomberg. “Until workers perceive that there are more opportunities available that offer higher wages, they will be content to work for the same rate rather than take a risk for more.”
But the numbers from March are far worse than expected
U.S. employers added 223,000 jobs in April, just 3,000 more than economists had anticipated, but signaling a labor market rebound following a poor showing in March that was dented by poor weather.
The Labor Department published April’s employment figures Friday morning, with the report showing job gains for professional and business services, health care, and construction. While it is encouraging that job growth last month exceeded Wall Street’s expectations, March was even worse than anticipated. Revised figures showed U.S. employers added just 85,000 jobs in March, far worse than the original reported figure of 126,000 and the smallest since June 2012.
Here are the highlights from this morning’s jobs report.
What you need to know: April was the 55th straight month of employment gains in the U.S. The growth last month also returned the U.S. labor market to +200,000 territory. The economy had been on a 12-month streak of gains above that threshold until it was derailed by a poor showing in March.
Hourly wages climbed just 3 cents to $24.87, and over the year average hourly earnings grew by just 2.2%. The wage gains in 2015 have so far fallen short of the 3% annual wage growth that was seen prior to 2007. That weakness comes even as many major retail and restaurant chains have issued splashy announcements proclaiming promises to hike up wages for their lowest paid employees.
The big numbers: The nation’s unemployment rate slipped to a near seven-year low of 5.4% in April from 5.5% the prior month, matching the expectations of economists surveyed by Bloomberg. The number of long-term unemployed was little changed at 2.5 million.
What you may have missed: A few industries reportedly fairly balanced job growth last month. The professional and business services sectors led the charge, but health care and construction job gains weren’t too far behind.
A notable laggard was mining, which the Labor Department reported saw a drop in employment of 15,000. Much of those losses were for mining and oil and gas extraction. Muted energy prices have pressured that industry, resulting in job losses for a sector that had until recently been a star performer.
But you don't have to let it
Anybody who’s ever lost a job knows it’s a miserable experience, but a new study shows that the aftereffects of being laid off last far longer than you probably suspected.
Research on 7,000 British adults by social scientists at the University of Manchester finds bad feelings that erode trust and lead to cynicism linger for a full 10 years, even if people have moved on in their careers.
“Even a single experience of redundancy can lead to depressed trust and what is particularly concerning is that people reported less willingness to trust others even after they got another job,” says James Laurence, the study’s author. The problem is especially acute for people whose identity is strongly tied up in their work.
“Losing a job often feels like a violation of trust because it meets all the right conditions, seen through the lens of ordinary human relationships. We build trust by making commitments and keeping them,” says James Jeffries, director of career development at Bard College at Simon’s Rock.
Jeffries says it’s not surprising that people whose sense of self depends on their job are more affected by job loss. “The more serious the relationship, the deeper we sense betrayal and the harder it is to recover,” he says.
But career experts say you’re not necessarily consigned to a year of giving other people the side-eye. There are coping tools that can help you recover without having to wait a decade.
Develop a more well-rounded sense of self. “In the U.S., so much of our ego and self-esteem tied into the work we do,” says Elene Cafasso, founder and president of executive coaching firm Enerpace. When that’s taken away, it leaves a void. To keep that from taking over your life, she says you need to engage in activities that can help you reclaim your identity as a person outside of a job.
“Focus on what gives you energy – working out, dancing, singing, volunteering, spirituality, time with friends – whatever does it for you, get more of that,” she says.”Focus on what you can control and… find an area where you can make an impact.”
Embrace the desire for concrete answers. “Their eroded trust will result in a desire to gain additional security in interactions,” says career coach Todd Dewett. People who have been laid off are less likely to accept general assurances about future career advancement and will seek out specific, concrete answers, which can be useful when looking for a new job offer or a promotion down the road. “Dealing with huge setbacks can be a catalyst that pushes people to more actively process… difficult feelings,” he says.
Don’t pull the plug on your professional life entirely. “Stay current in [your] skills. Keep doing something to revise, expand and update your resume,” says Patricia Malone, executive director of the Corporate Education and Training and the Advanced Energy Training Center at Stony Brook University. “Use volunteer work to boost your transferable skills on the resume,” she suggests. This has the dual benefit of forcing you to engage with — and re-learn to trust — other people in a professional setting.
Spend some time with other people who have been laid off. One of the biggest hazards of job loss is the emotional isolation that can lead to unproductive ruminating on your loss. “[Join] a group of peers who are in the ‘same boat,'” suggests Ofer Sharone, an assistant professor at the MIT Sloan School of Management. Yes, the networking might be helpful, but it’s more than that: They know what you’re going through like nobody else does, so you can drop the “game face” sometimes.
“Not only getting together for networking, where you have to present your ‘best self,’ but getting together to share the hard emotional stuff as well,” is an invaluable way to rebuild that broken trust, Sharone says.
But don’t spend all your time with them. “Do not spend all your networking time with others in transition,” Cafasso says. “Go where folks have a job.” She suggests attending professional association events, joining community service groups, participating in religious organizations and the like.
Think about where trust still does exist in your life. “Most of this advice asks a person to stop thinking in generalities and relentlessly pursue the details that make up a productive life,” Jeffries says. “It’s tempting to revel in cynicism and grief after losing a job until the wound becomes a scar,” he says, but he warns that wallowing will ultimately come back to haunt you. “If you’re feeling cynical, chances are you’ve become blind… to all the ways your life still depends on well-placed trust.”
Unemployment filings jumped by 31,000 last week, taking many economists by surprise.
Initial jobless claims last week increased by the highest amount in roughly two years, according to the latest data from the Department of Labor. The numbers, released Thursday, show those filing for unemployment last week jumped by 31,000 compared with a week earlier, pushing up the total number of individuals reporting to 313,000 from 282,000.
The news comes as unemployment is broadly improving. The U.S. economy added 257,000 jobs in January, continuing a 12-month streak in which employers hired more than 200,000 workers a month. As a result, a sharp rise in jobless claims seemed to take economists by surprise. A Bloomberg survey of 49 economists predicted jobless claims would rise by only 8,000.
However, as the Associated Press notes, more unemployment filings probably isn’t a cause for alarm. Short-term surveys of the employment market can be uneven, and the 4-week moving average showed an increase of just 11,500 jobless claims, significantly less than the week-by-week numbers. Other employment indicators, like wage growth and gross domestic product, have also been increasingly positive, suggesting the job market will continue to broadly improve.