Not a lot of people paid attention to the fact that GDP growth has had little impact on wages during the Bush Administration. In fact, CNN glossed over the fact that most families saw income and earnings decline.
Admittedly, everyone is fixated on housing and mortgages, mortgages and housing: How are Joe and Jane Average going to fare? What can be done for them? Do we need a rate cut? I mean really? Can housing really trash the whole economy? Is there precedent for that? How bad will things be for the guys holding the mortgage paper? With home sales tumbling down to 2001 levels, will commercial real estate fare any better than residential?
As for the Fed, although a lower interest rate will (at least theoretically anyway) stimulate more loans — which would be good for housing — to do so means they will have to ignore inflation. What inflation, you may say. The official numbers have been stable for quite some time. That may have to change. Food prices have been rising at the commodity level. Wheat is at a record high, milk prices have doubled in the last two years (making it pricier than gas in some areas). Other agricultural commodities are up as well. Since food is specifically not included in the “core inflation” number, economic gurus feel safe ignoring it. At some point, these rising prices must be considered by the Fed.
But the unkindest cut was barely covered outside the financial news, and frankly isn’t as obvious as the rising price of a loaf of bread and a jug of milk. Our economy only added 38,000 jobs in August, the lowest number since June of 2003 (ironically, the month I began writing ShortWoman). That’s far, far below the 150,000 jobs we would need to keep up with new people entering the job market, and even far far below the 120,000 jobs expected. These figures are admittedly from payroll processing firm ADP and not the Bureau of Labor Statistics, but it seems to me that ADP ought to have a pretty good idea of how many people are taking home a paycheck in August who weren’t in July. The ADP number is always lower than the BLS number, so there is controversy about which is more accurate (does ADP undercount, or are the BLS numbers inflated?). The BLS number is only expected to be 65,000. This is despite the fact that there were more help wanted ads in August, and despite the fact that workers actually feel comfortable negotiating better terms with their bosses.
The only bright spot is that these numbers should reflect the official layoff numbers, released monthly by Challenger, Grey, and Christmas. Corporate layoffs were up 85% to 79,000, including over 30,000 in financial services and housing, each. Yes, each. Forbes put the whole situation very succinctly: Good Luck Finding A Job.
I am planning a piece on “service jobs” in the next few days, probably after the BLS version of the job creation numbers are released. It will probably be posted over at Central Sanity with a pointer over here.
In closing: wrong house, sorry about the threatening to shoot you in the head, ma’am; a must see chart; Andrew Sullivan on banned books; the money quote is “Anyone who objects to single-payer health care on the grounds that it’s ‘bureaucratic’ is invited to navigate the phone tree at my HMO. Kafka would consider it ‘over the top.'”; new research suggests that when we are told that something is false, we only remember the “false” part for a little while; if you haven’t seen it yet, check out Pete Abel on Project Vote Smart; definition of irony; follow-up on Tony Snow; bipartisanship? Isn’t that where you kiss and make up and then act surprised to find a knife in your back? And finally, if only it were a nice Tom Clancy novel, New Book Details Cheney Lawyer’s Efforts to Expand Executive Power.