April Jobs Report Shows Shrinking U.S. Economy
May 6, 2016 (EIRNS)—Again in April, according to the Labor Department’s monthly employment report released this morning, there was a net loss of goods-producing and -transporting jobs in the U.S. economy, combined with a shrinkage of the labor force as more than half a million Americans were reported to have dropped out of it and ceased seeking work.
With a total reported employment creation of 160,000—all in non-productive fields like finance, healthcare and business services or temp work—April recalled the reports of most of Obama’s presidency, in which labor force shrinkage led to 95 million work-eligible Americans being out of the work force while another 15 million were officially unemployed or forced to work part-time. That out-of-work-force population is now back over 94 million, after dropping by 2 million in the second half of 2015. Both labor force participation and the employment/population ratio fell by 0.2% in April, wiping out the late-2015 gains.
And in a continuing pattern in the non-productive U.S. economy (labor force productivity has scarcely changed in 5.5 years, total-factor productivity is negative in that time), most new employment perversely went to the oldest sector of the workforce, those 55-69 years old. This is shown in the monthly Household Survey, which interviews employees rather than surveying employers.
A report May 5 on announced layoffs in the U.S. economy, by the Challenger, Gray and Christmas firm, was a harbinger. Announced layoffs rose month-to-month in April by 35%. In the first four months of 2016, employers have announced 25% more layoffs than in the same period a year ago, some 250,000. "We continue to see large-scale layoffs in the energy sector.... However, we are also seeing heavy downsizing activity in other areas, such as computers and retail," said CEO John Challenger.
The likely next step is that an interest-rate increase by the Federal Reserve will be informally ruled out until at least late this year. The Fed has helped cause major monetary policy problems worldwide, featuring negative interest rates and talk of "helicopter money" insanity. First it raised interest rates in December into a falling trans-Atlantic and U.S. economy, and "scheduled" four more rate hikes for 2016. Then it almost immediately reversed itself, provoking sharp declines in the dollar and pushing the other major central banks into negative-interest-rate adventures to compensate.
These have failed, while China, which has concentrated on increasing national credit to business and industry and to infrastructure investments, has stabilized its high level of economic growth.