Thursday, June 15, 2006

Unemployment rate plunges in May to 6.0 percent
Eye-popping drop. But, if these numbers are always coming out with qualifiers- what good are they? It seems every month there is always a reason as to why "this number really isn't true".

LANSING, Mich. (AP) -- Michigan's unemployment rate plunged in May to 6.0 percent, the lowest rate since February 2002 and a major drop from April's rate of 7.2 percent, state officials said.

But economists warned against reading too much into the numbers released Wednesday, saying Michigan's economy remains weak as the domestic auto industry continues its contraction.

"(I) wouldn't take any encouragement from this unemployment number. I think it's just a badly measured number this month," said Dana Johnson, chief economist for Comerica Inc. in Ann Arbor.

Michigan State University economics professor Charles Ballard said he thinks the actual state unemployment level is somewhere between the April and May rates, at about 6.5 percent or 6.6 percent.

"It's not completely surprising, given that you have this long-term decline ... in the relative size of manufacturing," Ballard said. "Michigan is heavily into a sector of the economy that's been shrinking."


From the comments- Kathy points out a piece of this story I missed.

Charles Ballard, professor of economics at Michigan State University, said that month-to-month fluctuations in the unemployment rate are often due to a "weird blip" in the survey data rather than solid evidence of change.

In reality, he said, the state's jobless trend "wasn't that bad in April, and it didn't improve so much in May."

Michigan's ailing labor market has emerged as the top issue in this year's campaign for governor. The race pits Gov. Jennifer Granholm against Republican businessman Dick DeVos.

But Ballard said neither candidate could rightly claim to have any magic solutions for Michigan's hard-hit manufacturers. He pointed out that the state's job losses began under former Gov. John Engler, a Republican, and continued under Granholm, a Democrat.

"If Dick DeVos had been elected four years ago, the Michigan economy would look very much as it does now," Ballard said. "The percentage of the economy that's in manufacturing has been declining for half a century. That's not a blip, that's a trend. And if you're in a state like Michigan, which is much more involved in manufacturing than the average state, that's going to cause problems for you."


Speaking of shrinking- the Detroit papers are reporting a disturbing story about Ford planning a huge expansion in Mexico. This is basically speculation at this point, a "wish list" as it were, and that is reflected in the varying accounts between the two papers. The News story emphasizes scary figures (150,000 jobs in the next decade!) in their usual sensationalist way, the Free Press doesn't go into as much detail. The UAW fight, talk of a southern US plant, all key components in both stories. Go read- you figure it out.

The one thing that struck me out of both these stories is the hint of attempting to influence the Mexican presidential election.

From the News-

In addition to postponing any public discussion of the plan until after the UAW convention, Ford also planned to time its announcement with an eye toward Mexican politics.

Mexico's presidential election is scheduled for July 2. Some within Ford wanted to announce the plant deal before that date to provide a boost to Felipe Calderà n, the candidate of the ruling National Action Party candidate and incumbent President Vicente Fox's hand-picked successor. The conservative Calderà n is locked in a tight race with leftist candidate Andràs Manuel Là pez Obrador, who is seen as less friendly to U.S. corporations.

However, others in Ford worried such a move could provoke a backlash against the company if LÃ pez Obrador wins, and the company decided to hold off until after the election. That may not be possible now.

From the Free Press-
Because of the sensitivity, Ford hoped to announce the new investment after the UAW convention in Las Vegas, which ends today, and before the Mexico presidential elections on July 2, according to the document.

If the announcement were made before the union elections, the Ford-UAW relationship "could be jeopardized," the document says.

And if Ford waits until after the Mexican elections, the grants being offered to Ford, which are valued at between $500 million and $1.4 billion, could be threatened.

I can't begin to wrap my mind around what this might mean, but in a very simplistic way it comes off as, "Elect the right guy, we give you lots of money."

Perhaps this has always been done by America and American corporations to a certain extent, but ever at the expense of so many American jobs?

This all goes down, and they build a plant in the southern US as opposed to Michigan, I'll never buy another Ford again. I promise. Oh, and my Mom? Huge Ford consumer. They have had a total four Escorts and currently have a Ford pick-up. I'll do everything in my power to dissuade them from Ford also. (Besides, I think I have them sold on Saturn now.)

Ask me if I've eaten at Domino's in the past 20 years- I stick to my boycotts. :-)