US employment growth, disposable income, weaken again

Economic growth


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.”


Key China data suggest economic growth already less than 5%


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

Learn more

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


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

Learn more
More posts
Pandemic redraws the map

  Companies have entered a new landscape where the coronavirus has accelerated major paradigm s...

What will happen if President Trump loses the election?

I spent from September 2015 onwards, during the last US Presidential election, trying to explain why...

Covid fears risk a Great Depression and major social unrest

Governments spent most of February/March ignoring my warnings here on the dangers posed by the Covid...

The state of the global economy in 2020

Last Wednesday, I gave the opening presentation for the ICIS PET Conference and looked at whether th...

Reality dawns for business as No Deal Brexit approaches

I warned before the June 2016 Brexit referendum that Brexit was all about politics, and Boris Johnso...

Global chemical industry – key trends for success in today’s New Normal

The chemical industry is the best leading indicator for the global economy. On Friday, I had the pri...

Oil prices signal potential end to the V-shaped recovery myth

Oil prices have moved into another ‘flag shape’ – which previously provided critic...

Bankruptcies now the key risk as hopes for V-shaped recovery disappear

Governments, financial markets and central banks all originally assumed the Covid-19 pandemic would ...


Market Intelligence

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

Learn more


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