Today’s Jobs Report

This morning’s jobs report was a bit of a surprise. The economy lost 4,000 jobs last month. This is the first job loss in four years. Of course, the initial jobs report gets revised again and again, but this is the first serious evidence that the economy is going into, or perhaps is already in a recession. The economy needs to produce about 150,000 new jobs each month just to absorb population growth.
Here’s a look a monthly nonfarm payroll gains. And losses.

The economy has created far fewer jobs in this expansion than in the previous one. Some observers have thought this signals underlying weakness in the economy. I wasn’t so sure. Not all economies look the same, and this current one has been marked by strong growth in corporate profits but timid job growth. Instead of making grandiose political claims, I simply think that’s the style of this recovery.
The unemployment rate stayed the same at 4.6%. I looked at the raw numbers and the unemployment actually had a teeny decline from 4.6472% in July to 4.6419 in August.
Let’s remember that we had nearly 24 straight years where the unemployment was never this low. A lot of that time was quite good for equity prices.

Posted by Eddy Elfenbein on September 7th, 2007 at 9:13 am

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