The Bureau of Labor Statistics issued its August Employment Situation Report today. It provided plenty of bad news.
From USA Today:
Employers cut 4,000 jobs in August, the first time in four years that monthly hiring contracted, the government said Friday in a report certain to boost pressure on Federal Reserve policymakers to cut interest rates.
In addition to the August job losses, the Labor Department revised down its estimates for hiring in June and July by a total of 81,000. It said 68,000 jobs were added in July rather than 92,000 and 69,000 in June instead of 126,000.
Economists polled a week ago by Reuters had forecast 110,000 jobs would be created in August, but many analysts had scaled back their expectations since then amid increasing signs the job market was coming under strain.
The surprisingly bleak August jobs report was a stark sign that a painful credit crunch that has unnerved Wall Street is putting a strain on the national economy. The last time the economy shed jobs was in August 2003, when 42,000 jobs were cut.
Job losses in August were concentrated in the goods-producing sector. A whopping 46,000 manufacturing jobs were cut, the most since an 86,000-job cut in July 2003. Construction businesses shed another 22,000 jobs, up from 14,000 that were lost in July.
Service industries added 60,000 jobs in August.
Those with jobs, however, did see modest wage gains.
Average hourly earnings rose to $17.50 in August, a 0.3% increase from July. That matched economists' forecasts. Over the past 12 months, wages are up 3.9%. Wage growth supports consumer spending, a major ingredient for a healthy economy.
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3 comments:
The financial companies alone have cut 10,000 jobs this week.We'll
see more before long.It's going to be tough on earnings for retailers this holiday season.
I wonder how many of these job cuts are simply results of efficient restructuring where the positions were simply not needed...however since the last recorded numbers of job cuts were in 2003, this cannot be an encouraging move.
I'm most concerned with cuts in two areas, manufacturing and construction. The construction job losses are understandable, at least to an extent, because of the slowdown in housing. The manufacturing job losses are a bit of a mystery, at least to me. Each month we see job losses of 15,000-40,000+ in manufacturing. That cannot be good news for a country that has already seen most manufacturuing jobs leave the country. One need only look at Michigan, Ohio, and to a lesser degree, Indiana, to see the impact the loss of these jobs has had and will continue to have on old industrial communities. Global trade is sure to have individual winners and losers, but too often the losers are being ignored. In my opinion, more programs must be offered for these former manufacturing workers to get them trained/educated and back into the workforce in similarly compensated jobs.
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