The slow recovery is starting to take a turn for the worst. The rate of growth in the economy slowed last quarter, and real hourly compensation fell by 2.6%. The housing market and manufacturing statistics continue to reach to new lows. Worries over the debt ceiling are threatening investor ratings for the US.
Today’s BLS employment situation report shows little signs of improvement, as more workers appear to be leaving the job market, the unemployment rate increased from 9.0% to 9.1% and only 54,000 jobs were added. The growth pause is alarming, considering the economy has yet to recover from its previous decline. After previous recessions, the general economy tends to boom, growing faster than historical average rates. Today’s news shows that this recovery is not typical and its continuation is increasingly in doubt.
Virtually all industries were flat or down. On the upside, personal services (40,300) and healthcare (27,200) increased, while, most notably, local government decreased (27,000). Retail employment fell by 8,000 jobs, as well as decreases in leisure and hospitality decreased (6,000) – all of which signals that consumer demand for basic goods, entertainment and recreation slackened.
While one month does not make a trend, the coincidence of negative economic signals provides evidence that the US economy may be slowing from its previously lackluster rates.