Friday, January 04, 2013

Treading water, or slowly sinking

This past month the labor market has been slowly sinking on most indicators.  A couple of bright spots are number of hours worked and pay, and the increase in Manufacturing jobs. Over the past year, the US has, at times reached the point were it was treading water, but overall for the year it has slowly lost ground, and is slowly sinking.

For all the talk of taxes in the last minute "Fiscal Cliff" negotiations, it really is spending that is killing us.  And our national debt.  Despite all the bad economic news, however, I think we will continue to tread water for another year.  Some time beyond that, though, I think we will probably sink.

This is a link to today's Bloomberg News report where I got the labor numbers, and some clippings I pulled from it.


Payrolls rose by 155,000 workers last month following a 161,000 advance in November, Labor Department figures showed today in Washington. 
“By the second quarter, we could see the pace of payrolls at 175,000 to 200,000,” provided the debt-ceiling debate is resolved, said Price 
Other reports today showed service industries, which account for almost 90 percent of the economy, grew in December at the fastest pace in 10 months, and demand for capital equipment such as machinery and communications gear picked up in November.  
The news elsewhere was less positive. U.K. services unexpectedly shrank in December for the first time in two years, clouding the economic outlook as Britain struggles to avoid a recession, figures from Markit Economics and the Chartered Institute of Purchasing and Supply showed today in London.  
For all of 2012, the economy created 1.84 million jobs, matching the gain in 2011. It’s the best back-to-back reading since 2005-2006.  
Nonetheless, the increases probably don’t satisfy Federal Reserve policy makers, who last month said they will keep pumping money into the economy until the job market improves “substantially.” (200k jobs per month)  
Central bankers on Dec. 12 expanded a third round of so- called quantitative easing and said they would hold their target interest rate low “at least as long” as the unemployment rate remains above 6.5 percent and inflation projections are for no more than 2.5 percent.  
Today’s report also showed hourly earnings climbed 0.3 percent on average in December for a second month to $23.73, beating the median forecast of economists surveyed by Bloomberg that called for a 0.2 percent increase. They rose 2.1 percent from December 2011, the biggest gain in a year. Additionally, the work week climbed six minutes to 34.5 hours.  
Factory payrolls increased by 25,000, the most since March, today’s report showed.

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