Economy Watch: Employment Gains Disappointingly Meager
- Sep 10, 2012
Employment growth nationwide in August was as anemic as the corn crop in the Midwest, with a net addition of only 96,000 jobs, well below the monthly average thus far this year of 139,000 per month, and not enough in the long run (or even mid-term) to keep up with population growth. Still, some kinds of businesses are hiring.
Employment in food services and drinking places, for example, increased by 28,000 in August and by 298,000 over the past 12 months, while employment in professional and technical services rose in August by 27,000, including gains in computer systems design and related services (up 11,000) and management and technical consulting services (up 9,000).
Manufacturing employment, which has been contributing to the addition of jobs since the employment crash in 2008 and ’09, edged down in August by 15,000. A decline in motor vehicles and parts (down 8,000) employment partially offset some of the gain in that industry made in July. Auto manufacturers laid off fewer workers for factory retooling than usual in July, but fewer workers than usual were recalled in August.
Rail carloads paint mixed picture of economy
The Association of American Railroads reported on Friday that U.S. rail carloads originated in August 2012 totaled about 1.461 million, down 1.4 percent compared with the same month in 2011. Intermodal traffic in August 2012, on the other hand, totaled nearly 1.231 million containers and trailers, up 4.3 percent compared with August 2011.
In another indication that there’s some recovery in industries that use building materials, carloads of lumber and wood products were up 21.3 percent year-over-year in August 2012, while crushed stone, sand, and gravel carloads gained 7.3 percent. Other gainers on an annual basis included petroleum and petroleum products, as well as motor vehicle and parts.
Coal carloads continued to drop significantly, dragging the average down. “U.S rail traffic in August was pretty much same song, different verse,” AAR senior vice president John Gray noted in a press statement. “Weakness in coal carloadings was largely but not entirely offset by increases in carloads of petroleum and petroleum products, autos, lumber, and several other commodities.”
Decision on QE3 soon, maybe
QE3 this week? The latest weak employment numbers might have been the last straw, considering that the next meeting of the Federal Open Market Committee is dead ahead. QE3, which is really just journalists’ shorthand for the third Large Scale Asset Purchases program, in which the Fed buys bonds to stimulate the economy. Most economists are now expecting an announcement on the matter on Thursday, and perhaps word that the Fed won’t hike the funds rate until at least mid-2015 as an additional stimulus measure.
Wall Street was muted on Friday, especially when compared with the spike the day before, but didn’t lose any ground. The Dow Jones Industrial Average gained 14.64 points, or 0.11 percent, while the S&P 500 and the Nasdaq were up 0.4 percent and 0.02 percent, respectively.