Job Growth Still Lowest of the Last 40 years

The Bureau of Labor Statistics reported:


Nonfarm employment edged up in May (+75,000), and the unemployment rate was little changed at 4.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  Employment continued to trend up in some service-providing industries and in mining, while retail trade and manufacturing lost jobs.  Average hourly earnings were up by 1 cent in May following a gain of 10 cents in April.

From Bloomberg:


The 75,000 gain in payrolls followed a revised 126,000 April increase that was lower than the government initially reported, Labor Department figures showed today. Economists expected a 170,000 increase. The unemployment rate fell to 4.6 percent last month from 4.7 percent.


A weakening of the labor market may make it harder for workers to demand pay increases. Smaller wage gains help reduce the risk of inflation and provide leeway for those Federal Reserve policy makers leaning toward an end to two years of interest-rate increases.


Economists expected payrolls to rise by 170,000, according to the median of 79 forecasts in a Bloomberg News survey, after an originally reported 138,000 gain in April. Estimates of the increase ranged from 125,000 to 250,000.


According to the national Bureau of Economic Research, this expansion started in November 2001 - not 2003 as the Bush spin team continually asserts in their employment reports.   There were 130,883,000 jobs in the US in November 2001 and 135,106,000 in May 2006 for a total gain of 4,223,000.  That's a compound annual growth rate of .70% -- and a full 1 million jobs less than the Bush administration's public claims.


The second weakest compound rate of establishment growth occurred in the 1990s, whose compound growth rate was 1.8% -- 2.5 times higher than the "Bush job machine."


Weak job growth and lower quality jobs have led to weak wage growth.  According to the Bureau of Labor Statistics, the average hourly wage of production workers was $14.70 in November 2001 and $16.61 in April 2006 for an increase of 13%.  Over the same period, the overall inflation index increased from 177.4 to 201.5 for an increase of 13.58%.  This makes the inflation-adjusted wages for production workers -.5% for this expansion.


Finally, the general emerging consensus is the economy will slowdown in the second half of 2006.  Considering the 16 straight Federal Reserve rate hikes and the slowing housing market, this seems to be a safe bet.  Therefore it is highly unlikely we will see a major improvement in either the employment or wage situation.

Tags: Economy (all tags)

Comments

4 Comments

When did retail become a "good job"?

A few things not missed by the statistics that I have noticed:

1. Manufacturing jobs are disappearing at a frightening rate.

2. Many of the people who used to do manufacturing jobs are ending up in service/retail jobs. These jobs are often less stable and offer fewer benefits.

3. Many of these jobs used to be done by young people. Unemployment figures are not picking up if a young person is displaced from a job because the young person is probably not considered part of the labor pool.

4. The decline in manufacturing is starting to have a ripple effect. I see a plague of empty stores throughout the business districts of my hometown, many in what is considered to be prime property.

These are observations that I have noticed locally. Can anyone confirm these with hard numbers?

by wayward 2006-06-02 05:37AM | 0 recs
Re: When did retail become a "good job"?

Your observations about manufacturing jobs are very important.  This economy has lost 2.8 million manufacturing jobs since 2001.

by Bonddad 2006-06-02 07:02AM | 0 recs
Re: Job Growth Still Lowest of the Last 40 years

Not only did the Clinton administration produce a lot more jobs than Bush II (or Bush I, for that matter), it actually (gasp) produced manufacturing jobs.  There is no more telling story than the weakening (and in some cases passing) of industrial giants in this country.  When Wal-Mart becomes the Bushies "made in China" job machine, it illustrates rather well what's going on.

by David Kowalski 2006-06-02 06:37AM | 0 recs
Re: Job Growth Still Lowest of the Last 40 years

In the Clinton years, IIRC, we did lose a lot of manufacturing jobs, but a lot of new manufacturing jobs were created, leading to a small net gain. The new jobs seemed to be better than the ones that were lost. I am sure that a fair amount of this shift was due to evolving technology.

The problem is not free trade. Generally speaking, trade is a good thing. Protectionism can be a job killer too. (e.g. steel tariffs help the steel industry, but higher steel prices hurt the auto industry.)

The problem is that in the global marketplace the US is losing its competitive edge.

Unlike in other countries, US employers have to pay for healthcare twice. Once for a medical plan for their employees and again in taxes for the Government programs that try to fill the gaps in our brain damaged health care system. How does this help the US compete?

As education budgets are being cut, the cost of an education is going up. Young people either go without an education, or go deep into debt to pay for it. How can a system like this compete with countries who hand out an education to anyone who has the desire and the ablity to do the work? Without adequate training, US workers cannot maintain an advantage in productivity and creativity. How does this help the US compete?

Once upon a time, the US attracted the best and the brightest from around the world. Now, thanks to Bush Adminstration pandering to the xenophobia, fear-mongering, and racism of their ignorant base post 9/11, this is less true than it once one. The bright foreign students are going home and taking their brightness with them. How does this help the US compete?

When Clinton was President, good fiscal management led to a surplus, which contributed to a strong Dollar, which meant that Americans could get more with their money. This is part of the reason why gas was so cheap in the late 1990's. Dollars were simply worth more. Bush's borrow and spend policies are a lie. Even if people's taxes are going down, the American people are still paying for Bush's spending in the form of a weaker dollar. They have the same amount of money, but due to excessive spending that money is worth less. Also, with inflation, the issues of bracket creep and the dreaded AMT (which Republicans show little interest in actually repealing) are coming into play for more and more Americans.

Republicans like to talk about taxes, and they are right that our tax code is insane. However, they will not actually ever fix it. K street will make sure of that.

When Clinton was President, the biggest issues facing America were whether the economy was growing too fast or not, what to do with the budget surplus, and if oral sex really is sex. What great problems to have.

by wayward 2006-06-02 07:48AM | 0 recs

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