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Charles McMillion thinks the recession is accelerating and we have a
diminished ability to recover. Read his remarks by hitting "read
more."
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2/1/08
Two economic reports today show the deeply
indebted US economy is in a decline that is likely to stretch into a
recession that could be quite severe.
The BLS jobs report shows a loss of -17,000 jobs in January, an even
sharper -0.3% loss in total hours worked and a decline in average
weekly wages even before considering the effects of inflation. Annual
revisions to data back to 1990 that are included in today’s report,
shows the economy had -376,000 fewer jobs in December than previously
estimated. Only 994,000 new jobs were created over the past year and of
these, only 809,000 were created by the private sector.
With today’s downward revisions to total paid hours worked, the current
74 month period since the end of the recession in November 2001 is,
even more than before, by far the weakest comparable period on record
for expanded payrolls. This includes even those periods such as the
deep, double-dip “supply side” recession of the early Reagan years.
Total hours paid for manufacturing jobs are now shown to be down a
record -8.9% since November 2001 – even worse than in the early
(foreign) “supply side” period of debt dependency when the country
first began producing less than it needed and began to suffer chronic
manufacturing trade deficits. (my updated graphic is attached)
Again in January, run-away private health and education bureaucracies
piled-on another 47,000 jobs with bars and restaurants adding another
15,000 jobs. These generally low wage jobs failed to offset the loss of
-30,000 jobs in state/local public education, the loss of -28,000
manufacturing jobs and the loss of -27,000 construction jobs. With
state and local governments now facing reduced sales, income and
property tax revenues, this important recent source of job growth has
been lost. (my industry-by-industry jobs table is also attached)
A Census report on Construction spending today shows that December
marked the third consecutive monthly decline in the nominal value of
construction put in place. Along with continued steep decline in the
value of residential construction, public construction also suffered a
near across-the-board decline in December offsetting the slowing growth
in non-residential private construction.
Along with other recent economic indicators, today’s reports confirm
the wisdom of the Federal Reserve’s recent aggressive rate cutting. The
economy appears already to be in a decline that is likely to stretch
into a long and deep recession.
Best,
CWM
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