Friends, today's Bureau of Labor Statistics July jobs report revealed that the private sector added 71,000 jobs. The good news is that this marks 7 consecutive months of job growth and the July increase may signal that the June lull or pause (+31,000) could be over. We will know next month.
Should we worry about the weakness of these numbers? On one hand no. This pattern happened after the 2001 and 1991-92 recessions. At the start of these recoveries, we got several strong months of job creation, followed by a lull, and then a return to stronger growth. Assuming we don't get bumped by breaking news, you can hear me talk in more detail about this issue on this weekend's Your $$$$ on CNN.
Further, because of the weak job creation and declining prices (yes, declining), many fear we are headed to a period of deflation. For what this means and should we be concerned, listen to my interview on NPR's The Takeaway:
http://www.thetakeaway.org/2010/aug/06/start-conversation-your-personal-jobs-report/#commentlist
On the other hand, yes. These job creation numbers are not strong enough to reduce unemployment and part-time employment. The impact of the $787 billion stimulus has started to wane and the economy clearly needs help standing on its own two feet.
Several months ago, I participated in a small discussion with the Speaker of the House and her committee chairs. We talked about ways to create jobs. I offered the idea of a tax credit and/or wage subsidy to nonprofits like the United Way who hire unemployed and/or part-time workers. These Americans would work for 3 to 6 months on specific projects (e.g., resource development), helping to rebuild their lost capacity.
Do you have any ideas on how to provide incentives to create jobs? If so, please share them with me and if promising I will pass them on to the Speaker and friends in the White House. Yes, I will give you credit. I look forward to hearing from you.
Friday, August 6, 2010
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