Posted by: Michael Mandel on July 03
This morning’s employment reports show a pervasive and broad weakness in the labor market. And frankly, I think the situation is actually considerably worse than the numbers show.
Let’s take a closer look. Construction, manufacturing, retail, wholesale, transportation, information, financial activities, and temporary help services are all down in June. The industries which appear to be adding workers are natural resources, utilities, professional and technical services, education and healthcare, and leisure and hospitality.
BUT!! I just don’t believe the apparent gains for professional and technical services, and for leisure and hospitality. In the professional category, the BLS data seems to be showing that architectural and engineering firms are adding workers. No, no, no—that can’t be true.
And the household survey shows that the unemployment rate in the leisure and hospitality industry—which primarily includes restaurants, hotels, and casinos—has jumped from 7.2% a year ago to 8.9% today. 8.9%!! That’s not the sign of an industry which is adding workers.
It may be time to take a look at the role that illegal immigrants are playing in this recession. I suspect that they are getting whacked hard, but not showing up in job numbers.
Taken all together, I am convinced that we are well into an official recession, once all the revisions are done.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.