April added 88,000 jobs last month, but where were most of the jobs created? More over, where are the jobs being lost that are dampening this already anemic economy? Is the housing recession that was thought to be totally separated from the 70% of the economy harmless?
CNN.com has the Dow, again, as its top business story. Of course, the stock market is important, as many (myself included) have stock. However, and this is a large however, if American workers are continuing to feel unemployment and income pains, the stock market is the very least of our economic problems. Indeed, these past few weeks have really demonstrated something: that Wall Street is completely DETACHED by whatever goes on at Main Street. The GDP grew 1.3% from January through March, exceedingly worse than than the 1.8% that was predicted, but the markets rallied anyway. Going back to what CNN reported,
The Dow Jones industrial average squeaked out another record high Friday, making this the longest bull run in 80 years, as investors cheered tame inflation numbers, talk of big mergers and a jobs report that appeared just right.
...
"It's pretty much playing out according to the plan that [Fed Chairman] Bernanke laid out for a soft landing," said Douglas Roberts, managing principal at Channel Capital Research.
The jobs report Friday seemed to support the so-called soft landing scenario, Roberts added.
Employers added 88,000 jobs in April, the smallest monthly number in more than two years and short of forecasts for 100,000 jobs added. Employers added an upwardly revised 177,000 jobs in March.
CNN reported
Oh here we go again. So here's the problem. Um, the job report was NOT "just right." In fact, it was lower than expected, just like the economic growth. Guess which direction Wall Street went! (As for March, it was not "upwardly revised", as the original report said 180K jobs were created, which means it was revised down by 3K.)
Yes, Wall Street rose again, for the 23rd time in 26 days. And this superficial response is getting more press coverage than the fact that:
a.) Job cuts in manufacturing continue a 10-month skid and have accelerated for the 3rd month in a row
b.) 11,000 jobs in the financial sector were lost, the worst since July 2004.
c.) 26,000 retail jobs were lost
So... to make this more organized, the usual suspects are creating the gains.
Education/Health services: +53,000 (!)
Government: +25,000
Professional services: +24,000
Leisure/hospitality: +22,000
Other services: +13,000
Wholesale trade: +12,500
Information: + 3,000
Mining: + 2,000
Utilities + 900
Transportation 0
Construction: -11,000
Finance: -11,000
Manufacturing: -19,000
Retail: -26,100
Now, what is significant about the fact that the financial and retail sectors are declining is that it contrasts what has been said for months by the Federal Reserve and many economists: the housing recession will NOT spread into the other sectors outside of housing. Well, in April we see finally a net loss of 37,100 jobs in two sectors not involving the manufacturing of products. For months, job declines were mainly secluded to construction and manufacturing. It has now infected the service sector, worth 70% of the economy. If it's the case that job losses are reaching other sectors, including huge ones like financial and retail, the next few months could be very dire. Not only will there continue to be losses in manufacturing and constuction, this bleak economy may drown down the rest of the crew with it.
You are not as likely see a decline in government or education/health service jobs, which makes this jobs report more vicious than it appears. For a "soft-landing", these job numbers are pretty crummy. Even in the 1995 soft landing, most months saw a pitiful 200,000 jobs being created.