May Jobs Report Shows the Economy Isn’t Improving
If you were to peruse the market section of your newspaper from this past weekend, you might think things are looking up for the United States economy. Last Friday, the Department of Labor released its May jobs report, which showed that 175,000 new jobs were created last month—that’s 10,000 more than some analyst were expecting. As a result, the Dow Jones industrial average shot up 207.5 points, its second-largest single-day gain this year.
While investors may have renewed confidence in the strength of the market, the details of the report give a different picture. Although more jobs are being produced, they are not the types that are going to put more money into the economy.
The first thing to notice in the report is the kind of jobs that aren’t being created: the goods-producing jobs. These are jobs like construction, manufacturing or mining, which produce tangible objects or have some part in it. In May, the U.S. lost 1,000 of these jobs. While there was an increase of 7,000 construction jobs, the manufacturing sector lost 8,000 jobs. This manufacturing sector produces goods the U.S. can actually export to buyers around the world.
The other thing to take notice of is the kinds of jobs that are being created. The vast majority of the jobs created were service-providing jobs. Over half the jobs created last month were limited to the restaurant sector, retail trade and temporary employment. As economist Dean Baker of the Center for Economic and Policy Research said, “These are all low-paying sectors. It is worth noting that the job growth reported in these sectors is more an indication of the weakness of the labor market than the type of jobs being generated by the economy. The economy always creates bad jobs, but in a strong labor market workers don’t take them.” There may be jobs being produced, but they aren’t the ones that are going to move an economy forward very quickly.
The report also showed that the unemployment rate isn’t improving. In May, the unemployment rate rose by 0.1 percent to 7.6 percent. The unemployment rate figure can be a tricky thing to understand because of the way it is calculated. When the official unemployment rate is calculated, it does not take into account those who aren’t actively looking for work. The unemployment rate rose over the past month because people who previously weren’t looking for work started searching again, increasing the total number of people looking for work, which increased the unemployment rate.
America’s economy is not in recovery. Despite what the stock market seems to indicate, things aren’t looking up. The recent quarterly report from ucla’s Anderson School of Management showed that gdp growth is still 15.4 percent worse than it would have been if the great recession had not struck. Over the past four years, the economy has grown at a 2.1 percent rate. Pre-great recession, the economy averaged 3 percent growth. To catch up, the economy would need to grow at 4 percent for 15 years, 5 percent for eight years or 6 percent for five years. Not very likely.
“It’s not a recovery,” said ucla Anderson Forecast director Ed Leamer. “It’s not even normal growth. It’s bad.”
In his book The United States and Britain in Prophecy, Herbert W. Armstrong explained how America got to the point that we see it at today:
[W]hen our peoples deserved nothing from God, He suddenly bestowed on us national blessings unparalleled in history—the unconditional promise to Abraham was kept! No longer is God obligated by His promise to continue our undeserving peoples in world prestige, wealth and greatness. Once we had been given such unrivaled position, it was up to us whether we should keep it.
Because America has refused to keep God’s commandments, God is not obligated to provide us with the national blessings we once enjoyed. Today, we see many of those blessings being removed. To understand the significance of America’s economic decline and how to protect yourself from it, be sure to read The United States and Britain in Prophecy and The Financial Law You Can’t Afford to Ignore.