The job report is out for July and the sky is falling according to mainstream media. The report reveals that there were massive job losses during the month. The question, however, is whether the numbers are as brutal as they seem or we are talking about much ado about nothing.

At first glance, the employment numbers for July are pretty ugly. They show a drop of over 130,000 jobs for the month excluding farming jobs. That kind of figure is enough to definitely create a headline or two. A closer look, however, reveals that the numbers aren’t all they seem. 

The first thing to understand is the job loss figure includes the termination of 140,000 temporary census jobs. The government must take the census every 10 years per the constitution. To do so, it hires a massive number of people for three to four months. Once that period ends, they are let go and they count against the unemployment numbers. In short, the numbers are skewed. 

So, where do we really stand with jobs when census workers are taken out of the equation? The news is not dire, but it also isn’t exactly good. We are seeing flat job growth. For all the fear of inflation, deflation, double dips and the like, the economy seems to have simply stalled out. We have very minor growth, but for all the world are more akin to a sailboat sitting on a flat sea with not a gust of wind anywhere to be seen. 

Will jobs pick up soon? There is no guarantee. In fact, there may be another hurdle coming up that could make the numbers look pretty bad. The problem is with the states. They are facing huge budget deficits, which means they are terminating employees in huge amounts. There are some estimates that states may terminate as many as two million jobs in the next year as they struggle to meet budgetary restrictions. They are currently cutting more than 200,000 jobs a month, which gives you an idea of how this will play out over the next year.

The Great Recession has brought forth a lot of pain and change. One of the real keys to it is the fundamental change that is our economy is undergoing. Huge government payrolls are being gutted and the idea of leveraging one’s home for material purchases is a thing of the past. 

What does all this mean for you? The answer is simple. The economic situation in the United States is undergoing fundamental changes. Government involvement is going increase dramatically and already is. The government, both state and federal, needs money to pay for its efforts. This means you should be planning for tax increases and not small ones. We could be looking at developments like massive increases in income tax rates, the termination of the mortgage interest deduction and the creation of a new value added sales tax. You must plan ahead to avoid being eaten alive financially by these changes. Contact us today at (800) 341-5433 or via this contact form to learn how.