Economy Watch: Mediocre Jobs Numbers, But Not All Bad
- Dec 05, 2011
Friday’s official jobs numbers by the Bureau of Labor Statistics indicated that employment continued to trend up in retail trade, leisure and hospitality, professional and business services, and health care. All levels of government employment continued to trend down, as has been the case since mid-2008. The net increase for November was 120,000 jobs, or roughly the monthly average over the last year, with the private sector accounting for 140,000 new jobs during the month.
Though mediocre overall, the BLS report did contain some spots of better news. For instance, in November the number of job losers and persons who completed temporary jobs declined by 432,000 to 7.6 million. Also, number of long-term unemployed–those bereft of work for 27 weeks and over—was little changed at 5.7 million and accounted for 43 percent of the unemployed. There were 1.1 million “discouraged workers” in November, a decrease of 186,000 from a year earlier. As defined by the BLS, “discouraged workers” are people not currently looking for work because they believe no jobs are available for them.
On the other hand, average hourly earnings for all private employees decreased in November by 2 cents, or 0.1 percent, to $23.18. The decline followed a gain of 7 cents in October. Over the past 12 months, average hourly earnings have increased by 1.8 percent.
A lot of Americans ruined by the great recession
What’s the new normal for the U.S. workers most directly affected by the Great Recession? A new report by the John J. Heldrich Center for Workforce Development at Rutgers University has tried to characterize that impact with research that began in 2009 with a cross-sectional sample of 1,202 workers who had said they had lost a job at some point between August 2008 and August 2009. They were resurveyed in March 2010, again in November 2010, and then in August 2011.
The findings aren’t particularly encouraging. Only 7 percent of those surveyed said that they had “made it back,” while 23 percent they are “climbing back.” To be back, workers have to say that they’re at least in fair financial shape, with no change in their standard of living because of the recession. To be on their way back, they have to report only a minor change in their standard of living that’s been temporary.
The largest share of respondents—33 percent—said they were “downsized,” that is, have experienced a minor change that’s permanent, or a minor change that’s temporary but which has left them in poor financial shape. Twenty-one percent of respondents were “devastated”—that is, they experiencing a major change to their lifestyle. The devastated respondents can be either in poor financial shape and think the change is temporary, or in fair financial shape but think this change is permanent. At the bottom are the 15 percent who said they were “totally wrecked.” That is, because of the recession they’ve experienced a major negative change to their lifestyle that is permanent and are in poor financial shape to boot.
Euro-Panjandrums meet this week, investors watch nervously
This week many eyes will be on Europe (again), where French President Nicolas Sarkozy and German Chancellor Angela Merkel are meeting to try to make some kind of progress in changing the rules of the euro zone. Trouble is, the two boss nations of the EU have yet to agree on just what to do, since the German position tends to be strong on order and stability enforced from the center, along with a long-term dose of austerity, while the French position looks more to a fix that involves eurozone bonds and the ECB as a Federal Reserve-style lender of last resort, and a lot less austerity. Unsurprisingly, each nation’s respective positions tend to be in the interest of that nation.
At the end of the week, Sarkozy and Merkel will take whatever compromise they cook up to other members of the euro zone to see whether the others will go along with it. Just as importantly, investors will be paying close attention. Considering the complicated and time-consuming nature of changing the fundamental rules of the euro zone, no one is expecting a solution to emerge like Athena from Zues’ head, fully functioning and ready to go. But investors are looking to see whether something workable can be proposed, and they would probably be ready to panic if real progress isn’t made.
On Friday, Wall Street, its week of exuberance at an end, barely budged at all, with the Dow Jones Industrial Average losing a negligible 0.61 points, or 0.01 percent, and the S&P 500 off 0.02 percent. The Nasdaq eked out a 0.03 percent gain.