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U.S. Jobs Down 20,000 in April. Don’t Bring Out the Party Hats Yet |
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The economy shed another 20,000 jobs in April, the fourth monthly decline this year, further confirming that a recession is under way. However, because many economists had predicted an April job loss in the 75,000 range, news headlines and broadcasts are breathing big sighs of relief.
But an improvement in excessively low expectations does not necessarily result in good news. Looking a bit deeper into the report, more troubling signs emerge:
Employees also appear to be working fewer hours, and for less pay. Among rank-and-file workers, who make up about three-quarters of the workforce, average weekly salaries fell 0.2 percent in April, and average hourly earnings rose an anemic 0.1 percent. [snip]
In addition, some companies may be avoiding layoffs by cutting back on employee hours. The number of hours worked fell in April, by 0.3 percent among private employers, the second decline this year.
Less pay, indeed:
The average hourly wage edged up only a penny to $17.88, the smallest gain in almost two years. The slim increase in pay, coupled with reduced hours, led to the biggest drop in weekly wages in almost two years.
The construction and manufacturing sectors are especially hard hit with the roiling mortgage crisis and spiraling oil cost. Manufacturers shed 46,000 jobs in April, and construction companies laid off 61,000 workers, according to the U.S. Bureau of Labor Statistics (BLS).
The BLS also revised the number of jobs lost in March and February, worsening the job loss over those two months by 8,000.
With a four-month net loss of 260,000 jobs in 2008, even this latest report, which moved the jobless rate from 5.1 percent to 5 percent, isn’t being hailed as a turnaround by corporate economists.
“There may be a limit to the downside as to how bad the economy will get, but don’t get too optimistic here,” said John Silvia, chief economist at Wachovia.
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A newsletter called “Too Much” documents corporate excesses. This morning’s edition had a comment from Canada that also holds true for the US:
“Middle-class countries can exist only when most are middle-class. But in Canada, that’s increasingly not the case. The rich are getting richer and the poor poorer. Meanwhile those in the middle are treading water.”
Thomas Walkom, Toronto Star columnist, May 2, 2008, on new data that show only a 0.1 percent increase, after inflation, in the median Canadian wage over the past quarter-century — despite a 50 percent growth in the national economy.