The ‘Surprise’ Job Report This Morning Spell Serious Trouble For Stock Market

Part-timers surge to 8.6 million

AP: Still, many of the jobs the economy added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 percent to 8.6 million, the most since February 2009.

Rate Plummets to 4.3% — For Govt Workers

CNS News: The best news anywhere in the U.S. economy over the past three months has been in the government sector, where unemployment has dropped dramatically from 5.7 percent in July to 5.1 percent in August to 4.3 percent in September, according to the Bureau of Labor Statistics.

The decline in unemployment rate is due to new hire, good news? not so fast. Many of the jobs the economy added last month were part time. I assume that they are making an average of $12 dollar, so 12x20x4= 960 x (.85) = $816 after taxes. Even better, let’s say that they are making as much as a full time worker with minimum wage ($1,068 a month in average). Can they survive in US? Perhaps.

What is minimum wage?

In the U.S. the current minimum wage rate is $7.25 (it may have changed depending on when you’re reading this post so check the post date). Based on that pay rate let’s do a little math.

In a given year full time workers put in approximately 2,080 hours. Multiply that by minimum wage and they’ll be pulling in $15,080 yearly ($1,257 monthly) before taxes. The tax rate for someone in this bracket is 15% for federal, state taxes will vary, we’ll simply use the 15% here to estimate on the low end. That means take home would be $12,818 a year, or $1,068 a month.

What can you buy with that?

How far your money goes will depend on where you’re living of course. In any part of the country you can probably find a decent place to live, most likely with roommates, for about $400-$500 a month. You can also fit in groceries for about $150, and your utilities will be about $40-$50. You may also have a small clothing allowance of $20-$30 a month if you thrift. Using a high estimate you’ll spend about $750 a month on expenses, which will leave you with $300 a month in disposable income. What you do with that will be above and beyond what it necessary to survive so things like eating out or recreation.

How to Live on Minimum Wage

It is possible to live on minimum wage.^[1] For most people, however, it’s not likely to be very much fun. Whether you’re forced to live in this situation, or you want to know that it’s an option, this article will show you how it can be done, assuming you bring home $1000 USD a month after taxes.

Find a place to live within walking or biking distance to your job and for less than half of your income.

Spend no more than $200 USD a month on household necessities (food, toiletries, cleaning supplies, etc).

Consider dedicating $100 a month for leisure.

Cut cellular and cable costs.

…

Comments: The new hires won’t have any extra money to spend on shirts, eating out and so on. $12.00 hr vs Unemployment, Welfare check, Food Stamps Card, living off the state may look like a better career. This spells worrisome to stock market as nearly 70 percent of our economy depends on consumption. This surprise job report will signal a big decline in consumer spending in the months ahead.

U.S. Dependent on Consumption to Survive

The American economy, in its current makeup, is utterly dependent on consumption to survive. Nearly 70 percent of our economy depends on people going out and buying goods. With nearly two-thirds of these purchases coming from foreign-made or foreign-owned products, the net result is an outflow of cash away from the domestic economy and into the rest of the world.

When our domestic consumption grew by 0.3 percent in February 2010, two-thirds of that growth went overseas to stimulate economic recovery in Japan, China, the E.U. or elsewhere.

On top of the fact that our consumer dollars flow overseas and out of our economy, there is the looming problem presented by low savings and stagnating income. Incomes in the United States has been out of touch with inflation for nearly a generation. There are working professionals in the United States who have not gotten a real “raise” to their pay in 20 years – any raises they did garner were trumped by overall monetary inflation.

Read more at http://investmentwatchblog.com/the-surprise-job-report-this-morning-spell-serious-trouble-for-stock-market/#Gb3gm7Aig7UaKb7p.99