NYT: “It’s milquetoast,” said Richard Yamarone, chief economist at Argus Research, referring to the labor report. “Political economists will paint the picture in their respective colors, but you cannot definitively say whether the economy is a glass half full or half empty.”
There, in a nutshell, is the headline story regarding employment: Not good enough for the incumbent to brag about, yet not so horrific as to provide assistance to the challenger.
Beneath the headline data, things are actually much worse: Finding a job is difficult, and a large swath of workes have all but given up looking for work (see chart, below). Wages are not keeping up with inflation, and the newly created jobs pay less and offer less health benefits than the lost positions.
Graphic courtesy NYT
The 144,000 payroll jobs added in August is problematic relative to arobust GDP. Note the “average monthly gain of 180,125 for the year is still too slow, some economists say, to support economic growth at an annual rate of 3.5 to 4 percent in the months ahead.”
That’s the real issue with employment in this muddled economic recovery: Its insufficient to maintain a 3.5% expansion rate. 140-150k jobs per month merley provides a stasis with population growth. For August, all we did was tread water.
Its barely been 4 years, yet everyone seems to have forgotten all about the bubble and crash. This anemic economy is fairly typical of a post-bubble environment: Too much capacity, little demand for labor, tepid growth. I suspect we will be seeing variations of this theme for the rest of the decade . . .
144,000 Jobs Were Added in August, a Bit of an Uptick
By Edmund L. Andrews
NYTimes, September 4, 2004
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