US employment growth, disposable income, weaken again

Economic growth

SHARE THIS STORY

US Jobsa Aug13

June has typically been the seasonal peak for US employment.  July’s data continued this trend, as the chart shows:

  • The July figure was 135.6m, compared to 136.8m in June (blue column)
  • It is still well below 2007’s peak of 139.1m
  • This is the first time jobs have been lower over a 4 year period since records began in 1939
  • Labour force participation rates at 63.4% are back at 1979 levels
  • Meanwhile disposable income seems to have plateaued  around $36.6k (Q4 saw a one-off rise in advance of 2013’s tax increases)

It is still too soon to be sure about the impact of the automatic spending cuts due to the sequester, which began in March.  But it seems government departments have so far focused on forcing employees to take unpaid leave.  This maintains the employment numbers and means, for example, that the Department of Defence has told 650k employees to take one day off a week until September, when its budget year ends.  But without Congressional agreement to replace the sequester and to raise the debt ceiling, job losses may eventually become inevitable.

Meanwhile, more than half of the new jobs being created are in low-wage industries such as restaurants and retail.  Thus they are not always very attractive to the 6.6m people who are actively looking for work.  So even though the jobless rate fell to 7.4%, this was not necessarily a sign of a strong economy.

Typical of those being hit is Morris Cornley, a former soldier and 57-year-old great grandfather from Kansas.  As the Wall Street Journal reports, he lost his job as a truck driver two years ago at the age of 55, and for the past year has been working as a delivery driver for a sandwich chain alongside his 21-year-old granddaughter.  He earns just $7.35/hour, and told the Journal, “its not like I’m not looking for other work. Its just that there’s not any other work out there for me.”

Equally, job creation in the key Wealth Creator 25 – 54 cohort remains relatively weak, and is still below the pre-Crisis peak.  As an analysis by the New York Times notes:

“The percentage of prime-age Americans with jobs fell sharply during the 2007-9 downturn. It did not budge from 2009 through mid-2011, before rising somewhat in late 2011. In the last year and a half, it has not risen much further.

“The fairest conclusion seems to be that the economy really is weaker than the declining unemployment rate suggests.”

PREVIOUS POST

Key China data suggest economic growth already less than 5%

06/08/2013

China’s economy is continuing to slow, as the new leadership takes power....

Learn more
NEXT POST

Australia's tax revenue forecast dives A$33bn in 10 weeks on China slowdown

08/08/2013

How has your company reacted to the clear signals from China’s new leader...

Learn more
More posts
Boris Johnson will have to disappoint someone in 2020 as the UK finally leaves the EU
15/12/2019

Finally, after three and a half years, the UK has reached “the end of the beginning” wit...

Read
ACS Chemistry & the Economy webinar on Thursday
10/12/2019

Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard...

Read
What’s next for Brexit and chemicals?
04/12/2019

The UK is about to go to the polls again to try and decide the Brexit issue.  Chemicals will be one...

Read
Global economy hits stall speed, whilst US S&P 500 sets new records
01/12/2019

Whisper it not to your friends in financial markets, but the global economy is moving into recession...

Read
Budgeting for paradigm shifts and a debt crisis
27/10/2019

It is now 8 years since John Richardson and I published our 10-year forecast for 2021 in Boom, Gloom...

Read
Paradigm shifts create Winners and Losers
20/10/2019

MY ANNUAL BUDGET OUTLOOK WILL BE PUBLISHED NEXT WEEK Next week, I will publish my annual Budget Outl...

Read
Markets face major paradigm shifts as recession approaches
06/10/2019

Major paradigm shifts are occurring in the global economy, as I describe in a new analysis for ICIS ...

Read
No Deal Brexit still a likely option if opposition parties fail to support a new referendum
15/09/2019

Canada’s normally pro-UK ‘Globe and Mail’ summed up the prevailing external view of Brexit las...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more