12/9/2007 6:59 AM
Thank goodness the US Labor Department has just published its last monthly employment report for 2007. The 94,000 new jobs figure announced December 7, 2007 for November 2007 was enough bad news for this year, let alone the fact that the financial media portrayed this fetid figure as “better than expected.” Of course, these media are supporting all the stock market traders, who are looking for the FED to cut interest rates again next week for still another bail out. (We recall fondly that from 1993 through 2000, the US job gains for the entire 96 months
averaged 250,000 new jobs per month).
OK, a few reporters were more honest, saying the November 2007 jobs report was “the clearest sign yet that the American economy was headed for a substantial slowdown.” Mark Zandi, chief economist at Moody’s Economy.com, said that the November job creation numbers are “indicative of a very fragile US economy that will come undone unless conditions improve soon.”
Meanwhile, the average hourly wages among rank-and-file US workers (i.e. the vast majority of us Americans) was just $17.63 last month, simply emphasizing the long-term erosion of spending power for most American workers in the last seven years. While the few Americans at the very top of the income ladder have done well (refer to the previous blog entries in this space)
, most wage gains in the last seven years have been generally weak. Even after the recession of 2001 and the economic debacles in 2002 and 2003, the inflation-adjusted hourly wage for rank-and-file workers has risen by just 1 cent over the last four years
, from $17.62 in November 2003. Over the last year, inflation-adjusted rank-and-file wages have actually fallen!
Again in November 2007, as has been the case for a long time, even the meager US job increases of recent years have come from non-wealth producing sectors in services such as health care, government, business and professional services, and the like. Construction again took it on the chin, and of course, US Manufacturing continued its long string of monthly losses by losing 11,000 jobs in November, despite the incredibly weak US dollar. The gloomy situation becomes even clearer if you leave aside hiring by the government. The private sector added just 64,000 total jobs in November 2007. As recently as 2006, the private sector was still creating 169,000 jobs a month.
An overall sense of insecurity continues, with consumer confidence dropping to its lowest level in more than two years, according to a survey released December 7, 2007 by the University of Michigan. Small wonder – the price of crude oil was down 10% this week, but gasoline prices dropped only 0.27%.
Oh yes, in its report on December 7, the US Labor Department quietly, but sharply, dropped its estimate for job growth in September 2007 to a miserable 44,000, down from an ‘original estimate’ of 110,000 jobs. That made September 2007 the worst month for job growth since early 2004. Are you paying attention here?
In 2005, the US economy generated an average of 212,000 jobs each month, weighted by service-oriented jobs as they were. Last year, the pace slowed to 189,000. In the first eleven months of 2007, the rate has dropped to less than 118,000 a month. “W” may eclipse his daddy in still another category – sporting 2 recessions during his reign vs. only one for “H.W.” But then, Daddy had only four years to serve. If only…