e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The Bureau of Labor Statistics released its latest U.S. Labor Market Report on Friday, covering the U.S. employment situation in July. Total nonfarm employment fell by -51,000 jobs in July. This was the same as June’s drop-off though a bit bigger than the May loss of -47,000 jobs.
Government payrolls increased by +25,000 employees last month; so private-sector payrolls dropped by -76,000 jobs, the eighth consecutive monthly decline. Only two of the ten major industry groups reported higher job counts in July. The “plus” sectors were education & health services (up by +39,000 jobs over the month) and leisure & hospitality (with an increase of just +1,000 jobs). In addition, higher job counts were reported by two “minor” industry sectors: mining (which includes oil & gas drilling, +10,300 jobs) and “other services” (+6,000 jobs). The biggest payroll declines were reported by manufacturing (-35,000 jobs), professional & business services (-24,000 jobs, partly reflecting the loss of -29,000 temporary help positions), and construction (down by -22,000 jobs over the month).
Compared with 12 months ago, nonfarm employers in the U.S. have reduced payrolls by -67,000 workers, a decrease of just -0.05%. However, private-sector employment was down substantially, dropping by -418,000 jobs or -0.4% over the year. Only a few private-sector industry groups reported higher payrolls compared with July 2007. The big job gainers were education & health services (+554,000 jobs) and leisure & hospitality (+211,000 jobs). Employment also increased over the year in mining (+53,600 jobs) and “other services” (+26,000 jobs).
On the downside, the construction and manufacturing sectors continued to bleed, with job counts plunging by -457,000 jobs and -383,000 jobs respectively compared to July 2007. Note that residential construction employment has declined by -355,000 jobs over the year; so payrolls in nonresidential and heavy construction have fallen by a combined -102,000 workers over the past twelve months. In manufacturing, over one-half of the total job losses came in just four sectors: motor vehicles & parts (-86,000 jobs and counting), wood products (-50,000 jobs), textiles & apparel (-46,000 jobs), and furniture manufacturing (-37,000 jobs).
Conditions didn’t look any better in the separate BLS survey of households. The U.S. unemployment rate rose to 5.7% in July, above the 5.5% rate registered in May and June, and well up from 5.0% in April. The nation’s jobless rate was 4.7% in July 2007; so the unemployment rate has risen by one full percentage point over the past 12 months. Among the major demographic groups, the jobless rates for adult men and women rose by +1.1 percentage point and +0.5 percentage points respectively over the year, while the rate for teenagers jumped up by +5.0 percentage points. Over the same period, the unemployment rate for whites and Asians increased by +0.9 percentage points and 1.0 percentage point respectively, while joblessness among blacks was up by +1.6 percentage points. The rate of unemployment among Hispanic workers has risen by +1.5 percentage points.
While joblessness has been mounting among all groups, younger workers have had an especially difficult time finding work. The unemployment rate for teens (ages 16-19 years) jumped from 15.3% to 20.3% between July 2007 and last month. Similarly, the jobless rate for those in the 20-24 years age group rose from 8.5% to 10.1%.
In another sign of labor market distress, some 4.2 million people were working part-time last month “for economic reasons,” because their employers cut them back from full-time to part-time work or because they couldn’t find full-time work. This group has swelled by 1.4 million workers over the past 12 months, almost as large as the 1.6 million upsurge in the number of unemployed.
Labor market conditions have been deteriorating for seven months now, and the cumulative damage is beginning to show. Employment is falling in most sectors of private industry. Since the December, 2007 peak, private employers have let go a total of -651,000 workers (a cumulative decline of -0.6%). The nation’s unemployment rate hit bottom in March, 2007 at 4.4%. By last month, the number of workers without a job had grown by more than 2 million. (Nancy D. Sidhu)
PR: http://www.bls.gov/news.release/pdf/empsit.pdf
The U.S. economy grew by 1.9% last quarter according to “advance” estimates of the Bureau of Economic Analysis. This pace was higher than the revised +0.9% pace of the first quarter and much better than the fourth quarter’s decline of -0.2%. Still, all three quarters were well below the 4.8% registered in 2q2007 and 3q2007. [All percentage changes in this paragraph are seasonally adjusted annual rates and adjusted for changes in inflation.]
Net exports (gross exports minus gross imports) were the biggest positive contributor to last quarter’s performance, adding 2.4 percentage points to the economy’s overall growth rate. Consumer spending for goods and services also was important, adding 1.1 percentage points (this spending was clearly boosted by the arrival of federal income tax rebate checks). Other sectors also generated positive contributions. Government purchases of goods and services contributed +0.7 percentage points to growth in the second quarter, and business spending for plant and equipment added 0.2 percentage points.
On the downside, U.S. businesses reduced inventories, pulling down the economy’s growth rate by a whopping -1.9 percentage points. And further declines in residential investment spending sliced -0.6 percentage points from the second quarter’s economic growth rate. Note: this was the tenth consecutive quarter of negative performance for housing.
The BEA called its release an “advance” report for several good reasons. When preparing its estimates, the BEA did not know for sure what happened to foreign trade, inventories, or construction in June and had to make some assumptions, which may or may not prove correct. Also, the information on consumer spending during June is still incomplete. We’ll get a better picture of the second quarter economy next month. However, the main headline—modest economic growth that was boosted by foreign trade and decent spending by consumers and governments but held back by de-stocking by businesses and the ongoing decline in housing—seems unlikely to change much. (Nancy D. Sidhu)
PR : http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
The Bureau of Labor Statistics released the Employment Cost Index (ECI) for second quarter 2008, which showed some moderation compared to the third quarter of 2007. The index measures total compensation costs, including wages and salaries and benefit costs, in private industries and government. The easing is expected to continue due to loosening labor market conditions.
Total compensation costs for all civilian workers rose by 0.7% (quarter-over-quarter, SA) in 2Q 2008, the same pace as the previous quarter and down from the 0.9% increase during the same period a year ago. Wages and salaries also increased by 0.7%, down from the 0.8% increases during the previous quarter and a year ago. Benefit costs rose by 0.6% during the second quarter, the same pace as the previous two quarters, and well below the 1.3% increase of the same period in 2007.
Private industry compensation costs rose by 0.6% (quarter-over-quarter) during 2Q 2008, following a 0.8% increase in 1Q 2008. Wages and salaries were up by 0.7%, following 0.8% increases during each of the past four quarters. Benefit costs for private industry were up by 0.5% last quarter, following a 0.6% increase in 1Q 2008.
State and local government compensation costs went up by 0.9% (quarter-over-quarter) during 2Q 2008, following a 0.6% increase in the previous quarter. Wages and salaries rose also by 0.9%, following a 0.7% increase during the previous quarter. However, benefit costs rose by 1.1%, following a modest 0.3% increase during 1Q 2008. (Candice Flor Hynek)
PR: http://www.bls.gov/news.release/eci.nr0.htm
Tuesday, August 12: Japan America Society - U.S. Subprime Crisis - Lessons From Japan's Real Estate Bubble Collapse
Panelists include David B. Green, CMB, Senior Vice President - Mortgage Division, Comerica Bank; Bradley A. Luster, President, Major Properties; and Mark Spiegel, Ph.D., Vice President, International Research & Director, Center for Pacific Basin Studies, Federal Reserve Bank of San Francisco.
Save the Date! Monday, November 17: The LAEDC 13th Annual Eddy Awards®
The Eddy Awards® is a cocktail, dinner, and awards gala to support fulfillment of the LAEDC mission to attract, retain, and grow businesses and jobs for the regions of Los Angeles County. The Awards were introduced by the LAEDC in 1996 to celebrate individuals, organizations, and now cities that demonstrate exceptional contributions to positive economic development in the region. Confirmed honoree: Rick Caruso, developer of The Grove and the Americana.
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