Archive for February, 2015

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By Jim Clifton, Chairman and CEO at Gallup

Here’s something that many Americans — including some of the smartest and most educated among us — don’t know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.

Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.

None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast “falling” unemployment.

There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.

There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.

Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.

I hear all the time that “unemployment is greatly reduced, but the people aren’t feeling it.” When the media, talking heads, the White House and Wall Street start reporting the truth — the percent of Americans in good jobs; jobs that are full time and real — then we will quit wondering why Americans aren’t “feeling” something that doesn’t remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.

Jim Clifton is Chairman and CEO at Gallup.

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Author: Tory Barringer

Fannie Mae Housing SurveyAfter suffering a setback in December, American attitudes toward the housing market recovered last month, with more consumers saying it is a good time to get off the sidelines.

Sixty-seven percent of American adults responding to Fannie Mae’s January National Housing Survey said now is a good time to buy a home, the company reported Monday, while 44 percent said now is a good time to sell. Both figures are up from December, when positive responses were at 64 percent and 40 percent, respectively.

Doug Duncan, SVP and chief economist at Fannie Mae, said the country’s current economic momentum played a role in January’s more upbeat views of the housing market.

“Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes,” Duncan said. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting.”

The share of respondents in Fannie Mae’s survey who said their household income is “significantly higher” than it was a year ago climbed 4 percentage points to a survey high of 29 percent, the company reported. Looking ahead, 48 percent said they expect their finances to improve in the next year, also a survey high.

Overall, 44 percent of Americans said they believe the economy is on the right track, an increase of 3 percentage points and only five points less than those saying the economy is headed the wrong way (49 percent).

That optimism spurred 66 percent of those surveyed to say they would buy a home if they had to move, a jump from 61 percent at the end of 2014. The share of those who would rent, meanwhile, slipped after three months of gains, falling to 29 percent.

“Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery,” Duncan said.

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By Margaret Magnarelli from Money.com

Money matters when searching for a mate—and it’s not just how much you have, but how you handle your cash, according to a survey released Wednesday by Ally Bank ALLY -1.05% .

Three quarters of people think it’s important to find a partner with a similar financial philosophy. Okay, that figures. But the survey also revealed which financial habits people found most appealing in a potential mate.

And it turns out that… wait for it… a strong budgeting and saving strategy is the hottest, with 55% of respondents putting it at the top of the list. The older people were, the more fiscal discipline mattered.

Surprised? Budgeting is indeed sexy.

To make yourself more of a catch, check out “How Do I set a Budget I Can Stick To?” in our Money 101 section, or start using Mint.com, which does a lot of the work for you.

Paying off credit card bills in full every month (21%) and bargain hunting (18%) were other attractive attributes. So maybe you’ll fall in love over a Presidents’ Day sale.

And since only 3% were titillated by higher credit limits and liking finer things, consider tacos instead of T-bones on that first date.