Friday, April 01, 2011

Jobs Report follow-up

Highlights:

Jobs +216k

Unemployment down slightly to 8.8%

Professional & Business services led the surge with big additions in temporary help (we're all temporary workers now) and business services.

Participation rate is still at 25 year lows - 64.2%

Our old favorite, the Birth/Death model kicked in an extra 117k jobs to the black box.

One of the better pieces of work I read this morning pointed out what I've been saying for years. All jobs are not created equal. In the late 90's when low-end tech jobs started to move overseas they were replaced with finance, mortgage bankers and real estate agents. Today's new jobs seem to be concentrated in temporary help, retail and leisure/hospitality. These are historically low paying jobs. So when a software sales rep takes a job as a Walmart greeter that person has added 1 job to the economy. It's a wash right? Unfortunately, it will take 15 Walmart greeter salaries to equal their old pay scale.

This is evidenced by the falling rate of Social Security taxes paid into the government in Q1. We're down almost 5% in collections as the number of employed persons continues to climb (I know the payroll tax holiday accounts for some of that decline but not all of it). So, maybe more people are employed but we are earning less than we did as a nation last year while everything around us costs 20% more (gas, food, heating). That's not a great long-term trend but these headlines will work wonders for a re-election campaign.

Cheers!

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