Every month, the Bureau of Labor Statistics releases information regarding the jobs numbers, which shows how the underlying economy is performing. Also called nonfarm payrolls, since they do not include farm-related employment, the jobs numbers are one of the most important data sets for trying to understand the strength or weakness of an economy. If the jobs numbers are improving, this means more people are being employed and the economy is gaining strength. If the jobs numbers are weakening, or there are outright job losses, this is an extremely troubling sign for the economy.
Old Man Winter appears to be killing the retail sector and the economic renewal. Extreme cold and nasty weather has engulfed about 70% of the country, reaching as far south as Georgia, North Carolina, and Texas, which don’t traditionally experience winter weather.
All that nasty weather means less driving to the malls and shops, which, judging by the numbers, appears to have been the case over the last two months. And if consumers don’t spend, the retail sector hurts and this translates into softer gross domestic product (GDP) growth.
Retail sales contracted by 0.4% in January, which represented the second straight month of declines following a revised contraction of 0.1% in December, according to the U.S. Department of Commerce. The poor showings were attributed to the weather.
With consumers staying at home, we are hearing whispers that fourth-quarter GDP growth could be revised downward from its initial 3.2%.
And while it’s too early to call for the economy to weaken, continued bad weather could mean just that. Now there are, of course, other reasons for the lackluster retail sector metrics.
There’s still a sense that the jobs market continues to be fragile following the creation of a mere 74,000 jobs in December that was blamed on the weather. Yet January was only marginally better with the creation of 113,000 jobs, which was well below the 185,000 estimate.
The jobs numbers are horrible, and unless they start to improve, I expect consumers to continue to feel hesitant about spending in the retail sector.
As I wrote in a previous commentary, investing in the retail sector will be much more difficult this … Read More
Last week, when the jobs numbers report was released, a new wave of optimism spurred the U.S. economy. I saw it in the editorials of the major newspapers; I heard it on the popular financial news stations. The unemployment rate in the U.S. economy dropped from 7.9% in October to 7.7% in November. (Source: Bureau of Labor Statistics, December 7, 2012.)
As the mainstream media and the novice reporters that work in it enjoy the fall of the “official” U.S. unemployment rate and the creation of 146,000 jobs in November, the underlying issues in the jobs market haven’t changed much. In fact, I believe they have become worse in some cases. What I often harp on in these pages is that the meager job creation so far in the U.S. jobs market has been in sectors where people earn lower wages.
More than 36% of the 146,000 jobs created in November were in the low-paying retail industry—in places such as clothing and accessories stores, general merchandise stores, and electronic appliances store. But it wasn’t just in November that we saw heavy job creation in the retail sector—retail jobs in the U.S. economy increased by 140,000 in the last three months, which is almost 34% of all the jobs created in the period from September through to November 2012.
Is this a big deal, Michael? Yes, it is, my dear reader.
In the U.S., one out of every seven waiters and waitresses and one out of every six bartenders have a bachelor’s degree. (Source: CBS, November 5, 2012). Job creation in the U.S. jobs market is not equal—if it were, … Read More
I was reading that Apple Inc. (NASDAQ/AAPL) would produce at least one of its computer products in the United States. Great news for job seekers, but Apple will continue to manufacture most of its products outside of the U.S. in low-cost global manufacturing regions, such as China, Asia, Mexico, Eastern Europe, and Latin America. The reality is that companies have to control costs, especially given the slower revenue growth amid corporate America.
There are 22.5 million or so Americans looking for work who are either unemployed or underemployed; about 12 million are fully unemployed. These are not good jobs numbers, as many of these people are taking minimum-wage jobs just to fight off the creditors and put food on the table. The poor jobs climate is also hindering the eurozone, which you can read more about in “Why Spain’s in for Some Hurt.”
Job growth is showing signs of wanting to edge higher, as the unemployment rate made a surprise decline to 7.7% in November with 146,000 workers managing to find full-time work, which was well above Briefing.com’s estimate of 80,000 jobs.
And while I’m pleasantly surprised with the drop in the unemployment rate and jobs numbers, the decline in the unemployment rate can be attributed to fewer people looking for work, according to the Labor Department. During Hurricane Sandy, for example, many did not search for work. We not only need better jobs numbers, but we also need stronger skilled-jobs numbers.
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