Economic Calendar

Friday, January 9, 2009

Employment: Heavy Losses Continue in Changing Economy

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Daily Forex Fundamentals | Written by Wachovia Corporation | Jan 09 09 14:57 GMT |

Nonfarm employment fell 524,000 with broad declines in manufacturing, construction, and services. Aggregate hours declined for the ninth month in a row, signaling a drop of six percent in fourth quarter GDP. Jobs, like credit and output, are adjusting to the expected slow-growing economy of 2009-2010. Consumers remain challenged.

Employment Declines Signal Broad Consumer Weakness

  • Job declines were widespread with losses in manufacturing and construction - the only bright spots remaining are health care & education, which reflects demographic trends.
  • In contrast to the broad trend of declines in private sector, government employment continues to grow. What might this suggest about the changing composition of the economy?

Unemployment Up, Output Down

  • Rising unemployment rates have been driven by a loss of jobs and are consistent with weakness in consumer spending and the drop in consumer sentiment. Unemployment rates remain significantly different by education cohort.
  • The employment and wages component of personal income continues to weaken and this puts pressure on the consumer.

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