Poof! That was the sound of approximately 62,000 jobs vanishing from the U.S. economy last month. June marks the sixth straight month of job losses. As for the month of May’s half percentage point spike in the unemployment rate to 5.5 percent – it stayed the same for June as well. Whaddya know? That huge percentage jump in unemployment wasn’t just a statistical fluke after all – it really was due to the economy getting slammed from the bursting of the housing and credit bubbles.
They revised May and April’s job destruction numbers, too. Turns out 438,000 jobs vanished during the first half of 2008, over 52,000 jobs more than the government originally estimated.
The construction, manufacturing and temporary-help sectors took the heaviest losses. Payrolls in the construction trade declined by 33,000, factory employment fell by 43,000 and temporary employment agencies shed 30,000 jobs. The retail and financial sectors cut staff as well.
But wait – there’s more! If you had a job, on average you brought in less money in June than you did a year ago. Hourly earnings rose a whole 6 cents, or 0.3 percent – the slowest pace of growth since September, 2005. Over the past year, wages increased 3.4 percent while prices went up 4.2 percent. So, Americans are experiencing falling wages in real terms, which drains purchasing power.
With all this, though, the economy hasn’t experienced a quarter of negative growth as what economic growth it’s making is being supported by exports and government stimulus checks. That is really quite sad. The American economy will not survive on exports, and the boost provided by the stimulus checks has already come and gone.
This pathetic report should lay waste to the idea that the worst is behind us and that brighter days are ahead. The bursting of the housing bubble and the credit bubble is sending shock waves through the real economy, causing job losses to mount. Over the past several years, America lived the good life on borrowed money that supported consumption and therefore economic growth and job creation. We are now experiencing the hangover – job losses and falling wages – from a wild and reckless orgy of debt accumulation, and this will not fade with a few doses of aspirin.