MAKING SENSE -- September 2, 2011 at 9:37 AM EDT
August Jobs Numbers Spell Bad News for Long-Term Growth
Photo by Jeff Kowalsky/Bloomberg via Getty Images.
Not good. Friday's job numbers, that is. Yes, there was an extenuating event: 48,000 or so Verizon workers walked off the job during August, and they're in the data as job losses, it seems. But the consensus forecast, even with the Verizon strike taken into account, was that the economy would add 65,000 jobs last month. It appeared to add zero instead.
And according to the household survey of 60,000 Americans, just as many of us were unemployed this month as last: around 14 million. But reminding us again that any given month's numbers are not to be heavily relied upon, the number of people saying that were employed increased by 331,000. How can the unemployment rate have held steady, then, at 9.1%. My guess is a whole slew of retirees -- 331,000? -- keeping the labor force constant. But I've looked at these numbers long enough never to bet on them.
Caution is further reinforced by the fact that the jobs -- added numbers from earlier in the summer were revised downward by about 60,000. So none of these numbers are to be fully trusted. On the other hand, the long-term trends mean something. When the payroll survey of organizations that do the hiring reports no gain for the first time in a year, watch out.
And watch out for Friday's market reaction, which could be brutal. Our old friend the US 10-year bond, is now back down to yielding 2.06 percent, near its all-time low -- a reliable sign that, at the moment, investors are scared, AND not anticipating much growth in the U.S. economy.
Finally, our Solman Scale of under-- and unemployed rose from 18.09 percent to 18.29 percent. That means 29,286,000 Americans say they want a full-time job, but don't have one.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions. Follow Paul on Twitter.
