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.
I work for everything I get and I don't spend money using "credit". I guess that makes me an entitlement fan, alright. I'm entitled to bitch about anything I choose.
Note: Hong Kong, Singapore, Ireland.
I can live without meat.
Next thing you know people will be hocking their Ipods and Xboxes to buy bread.....
Being on commission, mine goes up and down. What's hurting me is the fact that my natural gas bill was $478, I spend $340 a month to keep my gas tank full in my car. If those were like last years prices, I'd be doing better overall than last year. Since they're not, I'm about even overall.
Great answer. LOL
???? That doesn't seem particularly consistent. How could we increase manufacturing employment by 18,000 in 2005, and yet have a decline of 51,000 since last December?
And how far does beaaattcchhhing get you? I understand though.
Hey you are right..everyone has a right to gripe. It is not uncommon to feel underpaid where you are but what comes to mind when I read your words is you just have to have the willingness to leave it, to find a place that you can feel fairly compensated, and improve your situation. You know?
America has a has been economy. Corporations are outsourcing jobs Americans are willing to do. HB-1 visas allow companies to employ low paid foreign workers here in the U.S. Mexican workers flood over the borders every day. They compete with Americans for construction work. They carry forged papers and illegally obtained drivers licenses. Most of the jobs created in the past three years are low paying jobs. Most do not offer decent group health insurance. Very few pay $ 20 an hour and most pay less than $ 8 an hour.
Also we are selling our companies to foreign corporations. Most U.S. corporations are selling foreign made goods anyway. Everything we use or consume is made in China, Mexico, or India.
Yep...the sky is falling.
So, by electing Dems who will raise your taxes and lower your take home, you are better off how?
Yep...dogs and cats sleeping with each other. The economy is in the toilet and it's the end of the world as we know it. /heavy sarcasm.
AMEN.
What's worse is, you've outsourced yourself from Texas.
(What I've dared, I've willed; and what I've willed, I'll do!)
Why depend on someone else for your living? If you're dissatisfied with your current situation, change it. Look, I sympathize with you. I was in a similar situation. But I soon realized, if I want something out of life, I can't wait for someone to give it to me. You want more good things in your life? You already have the solution: dare, will and then do. Go for it!!
You want some cheese and crackers with all that whine? Get another job that has growth. Or you can whine that the gubmint hasn't done it for you.
You know President Bush inherited a recession. And the Clinton recession was made worse by Clinton's failure to deal with terrorism.
It took massive tax cuts whick should be caused revenue generators, to revive this economy. As well as the President's leadership in the war on terror.
Now if the socialists get their way we'll cut and run in Iraq. The Patriot act will dissappear. We'll have numerous terrorist attacks and the economy will implode.
As for manufacturing jobs leaving, who care we'll make the up elsewhere. As far as running a trade deficit, who care we've got enough disposable income to keep our economy strong as well as the entire worlds.
You and I are in agreement, Glenn, at least about that "blind" comment. ROTFLMAO!!!
Now if you'll excuse me, I need to go stand in the soup line. :-D
Houston
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