Job Numbers May Indicate Trouble Ahead
Posted on December 8, 2007The Labor Department reported Friday that just 94,000 jobs had been created. The numbers may have improved slightly from other months but many economists are unimpressed. Mark Zandi, the chief economist at Moody's Economy.com told the New York Times that things will have to change or the economy will "come undone."
The Times article also has a good example of what the economy is like for many workers. There are jobs but there are not many good jobs."The expansion is intact, but increasingly frayed," said Mark Zandi, chief economist at Moody�s Economy.com. The job creation numbers are "indicative of a very fragile economy that will come undone unless conditions improve soon."
The unemployment rate held steady at 4.7 percent for the third consecutive month, as a survey of households found strong growth in the number of people saying they found new jobs last month.
On Wall Street, markets barely moved yesterday, absorbing the jobs data with ambivalence. The employment picture offered assurance that the economy was not plummeting and might continue to expand, sustaining corporate profits. But those very assurances sowed worry that the Federal Reserve would feel less pressure to ease interest rates aggressively when it convened on Tuesday.
A number of market participants have urged a half-point cut in the Fed's key throttle control over the banking system, currently at 4.5 percent, but a stronger job market may make a quarter-point cut in the federal funds rate more likely.
$10 an hour is not going to be enough for most families to pay all of their bills.In Tucson, Sue Foust was sifting through options for new jobs yesterday, having been laid off from an AOL software testing site, where she worked for the last decade. Ms. Foust, 41, had been making about $65,000 a year as a software quality assurance engineer, she said. Comparable prospects seemed poor, and she was growing resigned to finding secretarial work.
"There's plenty of jobs if you want to make $10 an hour," Ms. Foust said. "I'll probably wind up taking something that pays half of what I used to."