This morning the Labor Department annouced that another 533,000 jobs were lost in November and admitted that September and October losses were worse than previously announced by 199,000. This brings year-to-date losses to almost 2 million jobs.
And never mentioned in these reports from the Labor Department is that, thanks to population growth, the labor force grows by about 150,000 per month. That means that, year-to-date, the economy has fallen short of what’s necessary to keep unemployment rising by 3.65 million jobs. That represents the entire labor force of Alaska, Wyoming, Montana, North Dakota, South Dakota, Vermont, Washington DC, Delaware and Hawaii – combined!
Remember when we were told that we needn’t worry about the loss of all of our manufacturing jobs to the trade deficit because our economy would transition to a service-based economy?
Service-providing businesses alone shed 370,000 jobs in November, or two-thirds of the overall job declines, following a loss of 153,000 jobs the month before.
That meant labor market weakness has now shifted over from the goods-producing sectors of the economy to the far more important services sector, which delivers almost 80 percent of U.S. output.
I would argue that the manufacturing sector is far more important than the services sector but, certainly, the services sector is so much larger now because we gave away most of our manufacturing sector. So I suppose that using sheer numbers of jobs that are left is the measuring stick for defining the “most important” sector. Never mind that manufacturing jobs typically pay five times the amount of service jobs, which are far more likely to be miniumum wage jobs.
Oh, by the way, what happened to economists’ prediction that the falling dollar would cut the trade deficit and restore manufacturing jobs in the U.S.?
Employment in manufacturing dropped by 85,000, while construction payrolls shrank by 82,000 jobs. Construction employment has declined for 17 straight months, and factory jobs have declined 29 straight months.
These are the worst job losses since 1974, and they’re growing exponentially. And if you think this is bad, just wait until after the holidays when retailers who have been hanging on by their fingernails, hoping for a good holiday season to save them, come up short and have to start closing stores.
This is the aftermath of the collision that I warned of with Five Short Blasts – the rising unemployment and poverty brought on by falling per capita consumption (as the global economy tried to absorb more grossly overpopulated nations) colliding with rising productivity. America accelerated the collision by attempting to trade freely with such badly overpopulated nations like China, Japan, Korea, Germany and a whole host of others where sky-high population densities and terrible over-crowding have emaciated their domestic markets. Oh, sure, we were able to mask the effects for a while by loosening lending standards and maxing everyone out on foreign-supplied credit, but that scheme came to its predictable end when people started defaulting. Now, both jobs and credit are gone with the wind. The odds of this recession deepening into a full-blown depression are growing with each passing day as the government does nothing to address the trade deficit, and as mounting job losses and falling consumer spending feed on each other in an economic death spiral.
Nothing will improve until the government takes drastic action in the form of tariffs to halt the overseas flight of jobs and restore an economy characterized by rising incomes.