Friday, August 7, 2009

"Only" 247K Jobs Lost in July

That is a marked improvement from previous months.

It's interesting that if you look at the actual BLS website report in Table A, that the civilian labor force and actual employment is shrinking and that the number no longer considered in the labor force is increasing. This indicates that people are dropping out of the job market and are no longer apparently looking for work. This would not be counted in the unemployment rate but is very real if you are one of those 637K people who dropped out in the month of July.

It looks like manufacturing was the big gainer because GM and Chrysler plants reopened. Manufacturing still lost jobs but not by as much in past months. Government, education, and health, and tourism were the only industries that actually gained jobs. It will be interesting to see over the next several months if the dribs and drabs of job losses and if private sector job creation will occur outside of the basic staples that did report job growth. In the months ahead, you should expect to see manufacturing and construction job growth due to the government credit card spending. Of course that's not real long term growth, just a wealth transfer from taxpayers via government spending. It will also be interesting to see what happens in housing now that the prime buying season is coming to an end and banks are picking up the pace on foreclosing.

We are not yet out of the recession and into recovery. We will recover when professional services, retailers, and manufacturing (not due to government spending) start to hire. It is always the private sector that leads to a recovery. Government, education, and parts of healthcare do not meet that criteria.

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