If you listen to the mainstream financial media then you don’t have to worry about the health of the labor market or health of the country’s economy.
The latest economic data shows that the U.S. labor market continues to expand with ADP saying that private companies created 172,000 jobs in June. However, you shouldn’t just listen to mainstream talk; take a look at the data for yourself because it is obvious that the labor market and the national economy is in trouble.
Yes, the latest data shows that 172,000 jobs were created last month but if you look past the headline number, three major sector saw significant losses last month.
Pretty much, the only companies that are hiring are in the service sector. Yep, you can get a job at Wal-Mart, McDonalds or Starbucks but good luck raising a family on a minimum wage paycheck.
The construction sector lost 5,000 jobs, the manufacturing sector shed 36,000 jobs and the good-producing sector lost 36,000. This is actually the second consecutive month that the good-producing sector and manufacturing have seen job declines.
These losses are disconcerting because these sectors have some of the highest paying jobs. On average, the hourly wage in the manufacturing sector is $20.41 an ounce. Let’s compare that to the retail sector, which has an average mean hourly wage of 12.67 an hour.
Unless these three high-paying sectors see a boost in employment, I would suspect that domestic demand will take a big hit as families have less disposable income.
Not only is domestic demand at risk but this latest report should add concern to the general health of the economy.
The fact that construction companies laid off people in what should be their busiest season does not bode well for the future of the housing sector. The construction sector should actually be hiring people.
Not only do these three sectors have some of the highest paying jobs but they also have the biggest impact on U.S. economy. Construction in the housing sector, which has been a source of growth this year contributes on average 3% to 5% to the National GDP. The manufacturing sector accounts for about 11% of GDP.
But at least we can be thankful McDonald’s is hiring. At least until those workers are replaced by robots.
