Employment: Heavy Losses Continue in Changing Economy

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. Wachovia Corporation http://www.wachovia.com Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.