With rising inflation, stagnant wages, a dwindling housing sector and a shaky stock market, how could the most recent numbers from the Bureau of Labor Statistics be anything but disappointing? The unemployment rate rose from 9.0 to 9.1, and only 54,000 non-farm jobs were added -- that's the lowest number in eight months.
We hate to be harbingers of doom, but June is not exactly shaping up to be one of the recovery's brightest months. As California's traditional "June Gloom" starts to sweep the country, remember that these numbers will change next month, and no one knows which direction they'll head. Still, you might want to tighten your belt a bit. There's no doubt that the recovery has lost some of its steam, and it's affecting pretty much everyone.
It's almost impossible not to feel it in some way. CNBC reports that real hourly wages have dropped 2.1 percent on an annualized basis over the past six months, a rate of decline not seen in 20 years. A consumer survey from the Conference Board, which reported earlier this week that the proportion of consumers expecting their incomes to increase was below 15 percent in May.
A study conducted by The Research Intelligence Group (TRiG), and commissioned by Al Angrisani, former U.S. Assistant Secretary of Labor and president of Angrisani Turnarounds, LLC, shows that, in general, the average American worker is not in a good place. The report found:
- Seventy-one percent of unemployed job seekers are feeling less encouraged about their ability to find jobs than they were when they started their searches. Older job seekers (age 35+) were more discouraged than younger workers (under 35) by a substantial margin.
- Fifty-eight percent of respondents reported that companies are not hiring, while 54 percent said that prospective employers are telling them that their skills are either not adequate or do not match the job requirements.
- When asked why they are looking for jobs, 32 percent of job seekers said they are unemployed and need a job, while 36 percent reported that their current jobs do not pay enough.
- Overall, 32 percent of American households have at least one member of the household actively seeking a new job, and 16 percent of the households have at least one member officially unemployed.
Angrisani says these findings suggest that while the economic recovery will turn 2 years old next month, it still is not strong enough to generate enough jobs -- especially enough high-paying jobs -- to substantially reduce unemployment in America.
He adds that the fact that half of all employed job seekers are looking for new jobs to increase pay may be a sign that the jobs that have been created during the recovery are low-paying. Without sufficient income in the hands of American workers, consumer spending could slow down, and potentially weaken the recovery.
"Corporate America and small businesses remain unconvinced that this recovery, largely built on the free money policies of the Federal Reserve and government deficit spending is sustainable," concludes Angrisani. "So they do not appear to be investing in the creation of new jobs at the same rate as in the previous recoveries."
Before you despair, however, keep in mind that this month's numbers were affected by Japan's earthquake and tsunami, which has put a dent in the automobile industry's recovery. Analysts don't expect the flooding and tornadoes in the U.S. to have a measurable effect on the economy.
As a matter of fact, the U.S. manufacturing industry is actually doing OK, considering the hit it took from the Japanese auto industry. The Society for Human Resource Management's (SHRM) Leading Indicators of National Employment® Report, shows that although 5,000 jobs were cut last month in that sector, over half of manufacturers (54.2 percent) plan to hire in June, while only 7.2 percent intend to cut jobs, barring any more natural disasters.
There are a few other bright spots: Private-sector employment overall continued to trend up (adding 83,000 jobs), although by a much smaller amount than the average for the prior three months, when private sector job increases averaged about 244,000 per month. In May, job gains occurred in professional and business services, health care and mining.
There's still a demand for numbers-crunchers and high-tech specialists: Employment in professional and business services continued to increase in May, up 44,000, with notable job gains in accounting and bookkeeping services (+18,000) and in computer systems design and related services (+8,000).
Some analysts are inclined to believe that the latest numbers are merely a temporary "soft patch." But many who are dissatisfied with the current administration in Washington are pointing to these numbers as proof of weakness and ineptitude. Regardless of political leanings, expect major efforts and attention to be focused on refueling the economy. No one wants this June Gloom to last.
Next: Companies Hiring
Stories from Readers Digest