The U.S. lost 4,000 jobs in August, spurring stories about a dreaded recession looming ever-closer. It’s the first decline since 2003, particularly grim news given experts’ prediction there would be an increase of about 100,000 jobs.
A Wall Street Journal article points out:
The timing made clear the report wasn’t a result of the market turmoil but rather a symptom of the same underlying economic problems that probably stem from the housing market. And it wasn’t the jobs that were cut — much of them in construction or housing-related manufacturing like the furniture industry — that were so worrying as the jobs that weren’t created. That’s a more difficult area to measure, and one that Fed officials will likely be wrestling with when they meet next week.
What does this mean for job seekers and the employment market?
The loss of jobs is bad news by any stretch, but it’s too soon to tell what the true impact will be.
How Will the Middle Class End Up?
A new report by Manpower suggests the hiring outlook is steady, with nearly 58 percent of employers not planning a shift in the hiring pace from the third quarter.
According to a CNNMoney story:
This is the second consecutive quarter that a majority of employers planned to hold staff levels steady. …
However, Jonas Prising, President of Manpower North America, said that "we cannot draw conclusions from this report regarding the subprime crisis, since the overall impact may not have filtered through yet." The survey was taken in July.
Prising is right–we’ll have to wait and see how the recent turmoil will shake out as far as hiring and jobs are concerned.
In the meantime, the jobs report could help kick our political leaders into high gear, as a New York Times op-ed suggests:
If there is any good news here it is that hardship may be setting the stage — in this pre-election year — for a national discussion about what needs to be done to fix the economy and help the increasingly squeezed middle class. …
Democrats, or some Republicans with a change of heart, must articulate — and Americans must demand — a program for ensuring that the middle class gets a bigger share of the economy’s spoils than it has received during the Bush era, when gains have largely been funneled to the richest Americans.
To have a fairer and more inclusive economy, workers need true mobility, which requires health care reform. And they need to see a reversal in the country’s ever-deepening inequality, which could come about through more progressive income taxes, better public education and more help for workers whose jobs are displaced by globalization.
Democrats, Republicans, Independents–politicians from each and every party–must be committed to protecting the middle class. It’s time to move beyond the partisan bickering and showmanship on Capitol Hill and the presidential campaign trail.
Our political leaders are overly concerned with getting votes and power, and not worried enough about the concerns of middle-class men and women. It’s up to us in the middle class to make sure our concerns–the job market, health care, education–are high on their to-do lists. If not, the hard-pressed middle class will only continue to wither.
Point of No Return?
Some experts say we may already be in a recession.
The Chicago Tribune reports:
The August jobs decline is a "very serious" development, which indicates "the economy is struggling and very near, if not already in, recession," said economist Mark Zandi at Moody’s Economy.com.
Merrill Lynch economist David Rosenberg offered an even more pessimistic take. "Today’s employment report was very clearly the weakest of this cycle and vividly portrays a recession-bound economy."
But others see things a bit differently, the story says.
While the employment report was disappointing, said Bernard Baumohl of the Economic Outlook Group, the economy’s resiliency over the past two years means "it’s way too premature to bet on a recession."
According to the jobs report from the Labor Department, manufacturing, construction, and local government education saw a drop in employment, while health care and food services continued to experience growth.
- The Employment Situation: August 2007 (Bureau of Labor Statistics)
- Unexpected Loss of Jobs Raises Risk of Recession (The New York Times)
- The Employment Tea Leaves (The New York Times editorial)
- Jobs data hint at recession (Chicago Tribune)
- How the Fed Must Play ‘Real-Time’ Economics (The Wall Street Journal)
- Hiring outlook steady (CNNMoney.com)
- Manpower Employment Outlook Survey Reveals Steady U.S. Hiring Plans for Fourth Quarter 2007 (Manpower.com)