Artificial Recovery; Real Job Losses

Readers want to know why I have not reported on the payroll jobs statistics for the past two months. Does this mean, they ask, that the situation has turned around and that the US economy is again creating jobs in export and import-competitive sectors?

Alas, no. I did not write about the past two payroll jobs data reports, because it is the same distressing story that other readers say they are bored with hearing.

The July report from the Bureau of Labor Statistics lists 113,000 new jobs, all of which are in services.

“Leisure and hospitality” accounted for 42,000 jobs, most of which are waitresses and bar tenders.

“Education and health services” accounted for 24,000 jobs.

“Professional and business services” accounted for 43,000.

Manufacturing lost another 15,000 jobs.

In the US today, government employs 7.7 million more people than does manufacturing. Little wonder we have an $800 billion annual trade deficit when the government sector is larger than the manufacturing sector.

American economists are yet to face up to the fact that offshoring high productivity, high value-added jobs that pay well and replacing them with waitresses and bartenders is a knife in the heart of the US economy. Charles W. McMillion of MBG Information Services reports that compensation is falling behind price rises and that the US economy has been kept afloat by consumers overspending their disposable incomes by drawing down their accumulated assets and going deeper into debt.

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