Railfax Rail Carloading Report June 27, 2009

Every week I watch the Weekly Railfax Report of North American Rail Freight Traffic for signs of stabilization. Year over year, there is nothing to cheer at as the following charts show.

Total US Rail Traffic



Total Industry Charts (US, Canada and Mexico)
Year over Year Percent Change - 13 Week Rolling Averages



Autos cargoes remain at depression levels and the only bright spots (on a relative basis) are coal and food. More charts in the report.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mish Weekly Mailbag 2009-07-04

I often receive many interesting emails from readers. Bear in mind that unless I specifically comment, I may or may not agree with the Emails. Here are a few from this last week.

Aircraft Repair Jobs Revisited

In response to Aircraft repair jobs sold to foreign workers, resumes not important GR writes:

Hi Mish,

Very interesting story.

I used to be a Boeing Pilot for South African Airways 40 years ago. We used to train crews from India. None of us would ever get on an Indian flight.

Very sadly, over the last 30 years, the US has allowed its FAA to degenerate badly. They are now totally minimalist to save expenses.

Aircraft mechanics are making hundreds of small decisions every day. Usually it is a no-brainer. However, one or two decisions a day are pivotal. As you know, very often a mechanic's decision can take 10-20 years to cause a disaster.

I really fear for the US because it is making only expedient short term decisions about everything. This is not like the US of my generation.

Regards GR

Radio Advertising Sign of the Time

RT writes:

As a frequent reader of both your blogs, I thought you might enjoy (if that is the right word) this little tidbit. Last night I heard on Q104.3 (a tri-state area radio station) the radio host making an announcement that in these trying economic times, finding a job can be harder than ever. That's why you can now PAY the radio station to have your RESUME read on the air.

If that doesn't tell you the true state of affairs, I don't know what will.

This is one consequence that I wouldn't have ever guessed. It's not surprising to me, but I just wouldn't have ever thought of it.

RT

Thanks RT

Your story is telling for a couple of reasons. Radio advertising has to be way down for the station to do that. Unemployed individuals cannot be paying much to have their resumes read. So the station is as hard up for cash as those unemployed individuals whose resumes it reads on the air.

True Unemployment Rate

TMK from Utah has this interesting perspective on the unemployment rate:

Mish

I am a Mormon in Utah, and last Sunday evening I was at a Priesthood Meeting (basically, all the men hold the Priesthood) with our Stake President, who presides over a Stake (equivalent to a diocese) of 5,000 members. A good statistical study group, in other words. (FYI, if you weren't already aware, the Latter-Day Saints (Mormons) keep EXCELLENT tabs on their members and are fastidious record keepers.)

I went up to him after the meeting and asked, "Are you keeping track of the number of heads of households out of work in our Stake?" "Oh, yes," he said, and then he threw out a number of the unemployed heads of households. "How does that translate into percent?" I asked. "Sixteen percent", he told me.

We talked about how this is significantly higher than what the national media is reporting.

This is in Utah County, where economic difficulties are rising, but I wouldn't consider depression-like, yet.

Nonetheless, I was amazed to read your informative blog today indicating that the more accurate count is, indeed, 16 percent.

TMK

Spanish Economy

Bran from Spain writes:

It is always hard to be objective as circumstance and sentiment is ever changing, but I will give you my feelings as to the temper in Spain.

Personally I have the sense of present/forthcoming serious economic disintegration, of social confusion and retribution. There seems no outlet to the bullishness more present in Spanish society than others, and that it may end up being almost vindictive, if not destructive in its expression.

As Spain relies so heavily on foreign participation to augment its productivity, it is not going to be a primary target for future global investment, as it is a secondary economy, and the northern economies may take several years to restock. The boom here has leveled prices with the north which due to Eurozone can't be diminished easily to invite investment.

We now have a very terrible cocktail of large immigrant populations, wealth exodus, high unemployment, end of anti-cyclic bank provisions, high public deficit, inter-regional disagreements, corruption, pre-democratic divides in power and politics, a dysfunctional legal system, large differences in expectations between young and old, past and future, poor economic education amongst the population, etc.

Maybe the only things that will maintain the fabric are family, religion, and the underground economy - not exactly inviting in business terms.

When I see such I dread to think what will be made of this country, even at the best of times they didn't quite have their act together. Remains to be seen.

All the best, Bran.

I cannot comment on Bran's take on the Spanish economy other than to say I trust his judgment. I can comment on his command of the English language and it is clearly superb. Thanks Bran.

Independent Contractors and the Unemployment Rate

DAL Writes:

The day after I retired (in 1993) I went back to work as an independent contractor or consultant. I've since retired for good, but here's a question...

During the 1990s and up until 2008 there were a huge number of ICs employed. The IC pays his/her own Social Security and Medicare taxes, files tax returns as self-employed. There hae been literally millions of ICs.

During layoffs a company will simply let ICs go. No fuss, no muss, just tell them to stop showing up for work. No problems with unlawful discharge suits, no severance pay. Nothing. And, by the way, since they are self-employed they do not qualify for unemployment compensation, so they do not show up on the government books.

If from 5 million to 7million people have been let go - "officially" - since the beginning of the downturn, how many people on IC status are simply out of a job and out of luck? Is there any way of finding out? My guess is that unemployed independents may at least equal the number of people counted on the roles.

Something to think about.

DAL

Thank's DAL, you are correct. I have commented on this many times but I do not know how to total it up. It is far worse this go around because of all the mortgage broker and Realtors who are still officially working but who have not had a paycheck for months.

This is another reason the reported Birth/Death job numbers are absolutely bogus. Many small independent business are no longer in existence yet the Birth/Death model showed net job expansion through the entire recession. The BLS model is a total fabrication of reality.

From Jobs Contract 18th Straight Month; Unemployment Rate Hits 9.5% :

Birth Death Model Revisions 2008



click on chart for sharper image

Birth Death Model Revisions 2009



The BLS should be embarrassed to report such nonsense.

Mish

Obama's "Cap and Trade" Energy Plan Will Cost Jobs

A quick look at the details of the Energy Plan working its way through Congress shows that Obama's energy plan will cost jobs. Please consider Energy job losers could get windfall.

Workers who lose their jobs if the pending climate change legislation becomes law could get a weekly paycheck for up to three years, subsidies to find new work and other generous benefits -- all courtesy of Uncle Sam -- under a little-noticed provision of the bill.

Touted by its House Democratic authors as a jobs engine, the bill offers extraordinary compensation for those who would lose their paycheck as a consequence of its passage.

Adversely affected employees in oil, coal and other fossil-fuel sector jobs would qualify for a weekly check worth 70 percent of their current salary for up to three years. In addition, they would get $1,500 for job-search assistance and $1,500 for moving expenses from the bill's "climate change worker adjustment assistance" program, which is expected to cost $4.2 billion from 2011 to 2019.

The bill passed the House a week ago in a hotly contested 219-212 vote, with supporters arguing that a principal reason to support the bill is that it would create millions of new jobs. But analyses from the political left and right argue that potentially millions of jobs in industries tied to traditional fossil fuels would be lost and, at least initially, not enough "green" jobs would be created to replace them.

"Can you name another jobs-creation bill that was so concerned about its potential impact that it preemptively included a benefits' program for the millions of workers it expected to displace?" asked Chris Tucker, a spokesman for the Institute for Energy Research, a pro-oil industry independent think tank.

While the analyses assume displaced workers will eventually find jobs, the liberal-leaning Brookings Institution predicts a net job loss of 0.5 percent over the first 10 years that carbon reduction legislation, called "cap-and-trade," is in effect. The conservative Heritage Foundation found that by 2030 net job losses would top 1.1 million, while the Coalition for Affordable American Energy, an industry group, estimates that more than 3 million jobs would be lost by 2030 as a result of the cap-and-trade system.

All Pain, No Gain

Government interference like this always costs jobs. The plan is a complete boondoggle. The provision to give displaced workers 70% of their salaries is downright disgusting. Who else gets guarantees like that?

Moreover, the plan is ripe for graft. Anyone who loses a job for any reason will be blaming the "cap-and-trade" legislation. At 70% pay, many will be hoping they lose their jobs.

Inquiring minds will want to investigate an excellent writeup on the subject called Cap and Trade and the Illusion of the New Green Economy on Prison Planet.

Contact Your Senators

"Cap-And-Trade" legislation has already passed the House. The only hope at this point is the Senate. There is a Senate Contact List in Speak Out - Audit the Fed, Then End It! You can also get Phone, Fax, and Email numbers from the Online Directory for the 111th Congress.

Please contact your senators today and stop this boondoggle. Tell them you do not support this bill outright, and you especially do not support 70% pay for those who lose their jobs. If the bill is supposed to gain jobs such provisions are not needed and will be ripe for graft.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List