Posted on 01/13/2006 6:50:55 AM PST by Willie Green
For education and discussion only. Not for commercial use.
The Labor Department reported the economy added 108,000 payroll jobs in December. The consensus forecast was 207,000, and my forecast, published by Reuters was 180,000.
Unemployment fell to 4.9 percent, mainly because fewer adults chose to participate in the labor force.
In the fourth quarter, 438,000 jobs were added, and this is consistent with GDP growth in the range of 3.0 to 3.5 percent
Economic growth appears to be moderating from the red hot numbers posted in the third quarter, and if the Fed does not push interest rates too much higher, the economy will grow at a 3.5 percent pace the first half of 2006.
Wage increases were moderate, despite fears that labor markets are too tight.
Wages were up 0.3 percent. Wages are advancing less rapidly that productivity, indicating that a tightening labor market poses little threat of igniting inflation.
In light of recent productivity gains, this moderate wage growth should dispel any notions the Fed may hold that labor markets and spiraling wages could reignite inflation.
In 2005 wages grew 3.1 percent, while inflation exceeded 3.5 percent.
It was a year of big bonuses and hefty raises for highly skilled professionals and executives but slim pickings for the ordinary working Joe.
Such tepid wage growth is particularly disappointing given the strong productivity advances posted by the private business sector over the last year.
Moderate wage growth and strong productivity growth should soon convince the Fed to end its cycle of interest rate increases soon. The Fed will increase the federal funds rate to 4.5 percent on January 31 but increases beyond 4.5 percent are less likely.
Manufacturing employment increased 18,000; however, employment in that sector has been unchanged since June and down 51,000 since last December.
Inexpensive imports, especially from China, are holding down employment in manufacturing and some service activities, clamping down on wages even as the economy grows.
The continuing competitive woes of General Motors and Ford compound the damage inflicted by the trade deficit.
Together, the trade deficit and troubles of U.S. automakers cast a long shadow over the job market.Overall, the manufacturing sector has shed three million jobs since 2000, and by this point in the recovery, two million of those jobs should have been recovered.
Paradoxically, an overvalued dollar plays a key role in slow wage growth and the inverted yield curve, which has recently captured the headlines.
To keep their currencies cheap against the dollar, China and other foreign governments buy billions of dollars of U.S. government securities. Foreign government purchases of U.S. securities drive down long-term interest rates, and these make possible inexpensive mortgages and home equity loans. However, those foreign government purchases of U.S. securities also subsidize U.S. imports and stifle the growth of jobs offering good pay and benefits.
ping
Willie Green on suicide watch!!
ROTFL!!
Who says it is hot. People I know are not seeing it. Wages are stagnant here.
Only the entire world - minus you and Willie.
You have to look at the nation as a whole...some areas are stagnant, some are on the downside, but many are up...it depends on location and industry segment.
Todays economy, you must be willing to retrain, think outside the box, and move to where the opportunities are.
The economy is good and there are jobs. I work in the Oil and Gas sector...it is crazy hot, a friend of mine works for a DOD contractor, that is crazy hot, another does work in real estate...that is booming.
Your reality aside, you must be willing to look at where the boom is to understand that there is one...and there is one.
In Hoc.
No. To be blunt about it the only economic indicator I care about is my pay stub. It is flat. And no matter how you want to sugar coat it many are feeling the same way. You can put lipstick on this pig and it is still a pig.
ROTFLMAO!!!
If you don't like what you see on your pay stub, go find a different job. There are plenty out there. If you refuse to change your career, you have no one to blame for your "stagnant" wage but yourself.
That's why the household survey shows an INCREDIBLE leap of people who are employed. Typical old-line, 19th century thinking.
Let me ask the lively minds of FR what they think of this proposal to stem manufacturing losses:
Could we not take some federal lands and set them aside as self subsistent tax free zones. Like an Indian reservation but provide incentives to woo American companies back from foreign countries. The cheap housing and cost of living within the area would allow for competitive lower salaries without lowering quality of life.
In 1905, US economy lost 51,000 blacksmith jobs!!!!
Lucky you!
Mine has steadily eroded, raises included, to pay health insurance, gasoline, home heating, cable, phone, bread, (and who can afford meat?), and most other commodity items.
Let Coop crow. Nothing can make the blind see.
Where is "here?"
You think your boy Kinky can attract businesses to Texas?
Given his anti-everything positions, just how would he go about doing that?
Or, under Kinky, would we just all hang out on Sixth Street, sip on a beer and gripe?
FWIW, Willie, I'd consider the source.
Right, and whose fault is it that you feel that way...the government?
Seriously, if you don't think you are making enough money, look around and find something that you like, can do, and pays well.
Would beat sitting around mopping that "you can't put lipstick on this pig", right?
It's the land of opportunity, but that opportunity doesnt come to you...you arent entitled to it.
And nothing can make the irrational, see rationality.
It's individual effort that matters...not sitting around complaining.
Jeeeeeeeeeeezzzz...you sure you guys are in the right forum? I mean you people sound like "entitlement" fans.
Perhaps you should forgo your next Titanium Powerbook purchase if you cannot afford meat.
"Right, and whose fault is it that you feel that way...the government?"
Amazing how some "conservatives" look to the government for everything. No raise? Damn gubmint! Cheese went up 11 cents. Damn gubmint! I am unhappy with my job and the choices I have made. Damn gubmint!
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