Is The U.S. Jobs Market Sputtering?

On Friday, the U.S. government announced dismal hiring results, with 115,000 new jobs being the lowest number since last October. In response, the Dow Jones Industrials fell 168 points, as government officials, economists and investors were disappointed, for it takes far higher numbers of new jobs each month just to keep up with all the people entering the work force.

But to understand what is happening, we need to look beyond those numbers. Over the last six months, U.S. employers have added an average of 197,000 new jobs each month, up from 106,000 a month for the prior six months.

From 2008 to 2010, the U.S. lost nearly 8.8 million jobs, which is more than the prior four recessions combined. And with what hiring has taken place since 2010, the U.S. is still down 5 million jobs. At the current up and down pace, it could take several years to add 5 million new jobs.

One of America's biggest jobs holes has been the housing sector. In 2008, the construction industry employed 7.5 people. Now that number is 5.5 million people, a loss of 2 million jobs. Add to that all the sales, financing, title and appraisal personnel who are out of work and it is a huge black hole of job losses.

In all, officially 13.7 million people are out of work. Reality is millions more people are no longer counted for being out of work too long, 342,000 more last month. In addition are the millions of people who have part-time work and need full-time employment.

Yet there is certainly hope. While housing prices remain weak and continue to fall in many markets, the sooner Fannie and Freddie and the major banks sell off their mountainous inventory of foreclosures, the sooner that housing markets will see a pricing bottom, and a modest rebound. In that environment, home building will increase and that will employ more people.

Even with flat wages, which is what most employed Americans endure, as more people go back to work, they will buy more goods and services, especially from small businesses, which are America's jobs engine, and that in turn will encourage them to hire more people.

Bit by bit, this is what it will take to put America back to work. As employment rises, home foreclosures slow down, more local taxes get paid, providing revenue to hire more teachers, police and firefighters, which provide more jobs, which in turn will restore the dignity of so many capable people who deeply desire productive employment.

Dick
To learn more, please see "Severity of Recession Slows Down Recovery More Than Anything Else," The Wall Street Journal," http://online.wsj.com/article/SB10001424052702303877604577383831309732816.html, "Jobs Engine Sputters Again in April," The Wall Street Journal, http://online.wsj.com/article/SB10001424052702304743704577383713904032818.html If The Wall Street Journal has truncated these stories to non-subscribers, please Google the titles to find the full stories.