As a nation we already spend too much, and employ too many people, in these industries. Our current economic problems will not be solved by hiring more teachers and medical technicians. Our ultimate recovery must be led by a resurgence in manufacturing, which according to today’s numbers, continues to spiral lower. –Peter Schiff, Euro Pacific Capital
The worst of the contraction may be behind us but the economy is still in consolidation and will be through year end. Specifically, the 467,000 decline in payroll jobs was about 100,000 more than the Street had been anticipating. The composition of the job loss was also well balanced with goods producing firms cutting staffing levels by 223,000 as service producing cut employment by 244,000. –Steven Ricchiuto, Mizuho Securities
Job losses and the weak average hourly wages data suggest weak consumer incomes and thereby consumer spending. The second half gain in GDP will be dominated by federal spending. The test will be if much of the transfer payments are saved, not spent. In the personal income data released last week you saw that most of the money was saved. –John Silvia, Wachovia Economics Group
The green shoots in the job market are hard to find. Businesses are determined to trim costs by cutting payrolls. Expecting sluggish recovery in demand in the foreseeable future, employers want to make sure that a sustained economic recovery is here before hiring. The job market will become the Achilles’ heel of the coming recovery. –Sung Won Sohn, Smith School of Business and Economics
The details of the June employment report show a distressing degree of slack in the labor markets and a significantly weaker track for personal income. These trends will continue over coming months, and the process of reversing them will be a lengthy one. –Richard F. Moody, Forward Capital
OK, we know employment is a lagging indicator and there have been some positive signs in other metrics so let’s not slit our wrists. At the same time, we are digging a hole that is so deep that crawling out of it is going to take years. All of these people do have to find jobs again sometime and I suspect, as do many others, that the numbers understate the extent of the problem. There are a lot of people working for ten of twelve bucks an hour that used to make multiples of those numbers. That’s what you do to survive. So as we all probably know intuitively, the truth is worse than the picture the numbers paint.
