As you probably heard by now, the economy created just 51,000 last month — the slowest monthly job gain since the hurricane-induced slowdowns last October and November. Retail employment was down for the 3rd time in the past 4 months — indicating that consumer spending continues to moderate.
At the same time, manufacturing production employment (that’s jobs on the factory floor) dropped by 30,000 — the largest monthly decline in over 3 years. More than a third of this drop took place in sectors closely connected with the housing sector (furniture, wood products, and nonmetallic minerals).
It’s clear that the economy is slowing down. This report should give the Federal Reserve ample ammo to keep interest rates unchanged when they meet in a few weeks.
There was some good news for workers, however. Wages are up 4 percent over the past year…the fastest pace in 5 years. Unfortunately, this has not taken place in manufacturing. Some may conclude that the reason for this is that the “good” jobs are leaving. In reality, manufacturing hourly compensation is up over 6 percent over the past year, with rising health care costs eating into the lion share of this increase. As a result, wages are up just 1.5 percent over the past year.
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