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The August job numbers are out. The economy lost another 216,000 jobs. Bear in mind, this is a first estimate number and will likely rise in the next month or two as more data come in. This is what happened for June and July,
The change in total nonfarm payroll employment for June was revised from -443,000 to -463,000, and the change for July was revised from -247,000 to -276,000.
To date 6.9 million jobs have been lost since the recession began in December 2007.
Now while the overall number of jobs lost has been trending downward over the last few months, the unemployment rate (U3) actually increased from 9.4% in July to 9.7% in August. At the same time the more complete U6 number which measures un- and under- employed jumped from 16.3% in July to 16.8% in August. Number of hours worked per week although not final held steady at 33.1 hrs/week in July and August.
What we need to remember is that July and August are periods of high economic activity and are about the best months Obama, and the rest of us, have to look forward to. Even so, we see job related indicators worsening during them, although at a slower pace than previously. So if this is what the best looks like, it looks like we will be in for a cold fall and winter. Predictions of an end, even a technical end, to recession in the third quarter of 2009 are looking increasingly dubious, especially if the NBER attaches the same importance to job loss for dating the end of the recession as it did in fixing its starting point.
For most Americans, such a call will be irrelevant however. They are and will remain in recession. Indeed many already are and will remain in depression. The story that some economists have been selling is that things were really bad but now they have gotten a little better although they could get worse again in the future. What we are actually seeing is somewhat different from this: Things were really bad, and now they have gotten less bad for a few months, but it looks like they will get considerably worse again.
Breaking down the numbers and taking a somewhat longer view, we have gone from 24.543 million goods producing jobs in January 2001 to 18.571 million in August 2009. This is a 24.3% decrease. I am using January 2001 as the base period for the obvious reason that this was the beginning of the Bush era which we are seeing continued in the Obama Administration.
In manufacturing, 17.114 million in 1/01 down to 11.771 million in August 2009 or a 31.2% loss.
In construction, 6.824 million in 1/01 down to 6.093 million in August 2009 or a 10.7% loss. Construction jobs actually peaked in January 2007 at 7.737 million and the decrease from that point is 21.2% to August 2009.
Similarly, in financial activities, there were 7.755 million jobs in 1/01 and 7.706 million in August 2009, a decrease of just .6%. But these jobs peaked in July 2007, the month before the housing bubble burst, at 8.317 million. The decline from this point is 7.3%.
These numbers tell a very different story, or rather two stories. The first is that we have been losing our industrial base and this has been going on throughout the Bush-Obama period. That is what the goods-producing and manufacturing jobs are telling us. The second is that construction jobs peaked in January 2001 just at the time that the first mortgage writing companies were going bankrupt. These were two of many danger signals that went unheeded in the run up to the housing bubble bursting in August 2007. And while the financial sector started losing jobs with the bursting of the bubble, and despite all the bankruptcies and mergers since, and all the stories about job losses in this area, the actual job losses have only been about a third of what we have seen in construction. The trillions in bailouts have decidedly cushioned job losses in an industry that otherwise would have been expected to see much heavier downsizing.
So what is the take home message? The August job numbers indicate that the policies of Obama and his economic team of Geithner, Summers, Bernanke, Orszag, Romer, and Goolsbee are not working. They have expended vast resources and have only managed to slow temporarily the rate of our economic descent into depression.
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I should add that unemployment is a lagging indicator for recovery. But when we look at other economic data and see that it is neutral to negative and add in unemployment which remains negative, it is very hard to justify calling an end to the recession at this point.
It amazes me that so many people can be without jobs and millions are under employed and the wall street types say the recession is about over. It was said to me the other day that the recession is over and I decided to quote that famous person who posts under the handle of “Hugh” by saying “wait until 2011 when we will be in a depression”.
Thanks Hugh,recommended. I was going to write a diary about this but your’s does just fine.
And here’s some more fodder for others to consider.
“In the past twelve months, the U.S. economy has lost 5.9 million jobs, the largest annual job loss in records dating back to 1970.”—-sorta puts Obama’s job creation numbers for ‘green jobs’ etc. to shame.
“”While many investors are convinced the recession is over, real-time indicators show the economy has not yet bottomed, let alone started to recover,” said Biderman.” —-and while Obama touts the ‘wall st. recovery’ aiding peoples 401K’s ,etc., “Consumers are yanking record amounts of money out of savings vehicles as they cope with the worst economic slump since the 1930s,” noted Biderman. “The report from the Bureau of Economic Analysis that the savings rate was 4.2% in July is dead wrong.”
I got blasted for calling Obama an ‘Uncle Tom‘ before he was elected but nothing has happened that would change my mind.
Thanks, Hugh. You are great, as always.
My take: Everyone here should direct his or her energy toward overthrowing the current system.
The current system is corrupt.
Put energy into the current system. Get more crap output.
Wow! Bush’s service economy plan just keeps on giving.
I’ve decided that if they ever need proof that trickle down does not work the past three GOP administrations prove it.
Americans have to take back their economic opportunites. Government is not going to do anything and neither is the republican lead monopolies. They want Obama and the Democrates to fail. They have their economic washout almost swept into the dark hole. The only thing left is for them to send out a Marie to tell us all to eat shit.