Jobs in surveyed companies dropped by 93,000 last month. However, the number of employed people increased by 147,000. These statistics are consistent with the trend for the whole year. How can this be?
First, the surveyed companies are typically large and new ones aren't added that often. Therefore, the employment trends are really loss of jobs in large corporations (probably due to outsourcing overseas and outright production decreases) but small businesses that are off the radar are hiring and new small businesses are being created. The large businesses also depend on foreign consumption, so they need to wait for a truely global recovery before committing to expanding production (and their outsourcing will help improve the prospects of that). The small businesses are being helped by tax incentives allowing them to write off more equipment purchases than they were allowed before. The large businesses are also trying to get more productivity out of the workers they do have, allowing them to distribute more in dividends, which are now taxed at a lower rate by Bush's unpopular tax cut. They can also spend that money on buying services and products from the new small businesses when there are unexpected increases in demand. Looks like the economy is following typical recovery patterns. Let's hope Greenspan doesn't do anything stupid to quash it.
Edit: my source for this news is "Jobs Data Hint at Small-Business Growth" By Tony Crescenzi at realmoney.com
First, the surveyed companies are typically large and new ones aren't added that often. Therefore, the employment trends are really loss of jobs in large corporations (probably due to outsourcing overseas and outright production decreases) but small businesses that are off the radar are hiring and new small businesses are being created. The large businesses also depend on foreign consumption, so they need to wait for a truely global recovery before committing to expanding production (and their outsourcing will help improve the prospects of that). The small businesses are being helped by tax incentives allowing them to write off more equipment purchases than they were allowed before. The large businesses are also trying to get more productivity out of the workers they do have, allowing them to distribute more in dividends, which are now taxed at a lower rate by Bush's unpopular tax cut. They can also spend that money on buying services and products from the new small businesses when there are unexpected increases in demand. Looks like the economy is following typical recovery patterns. Let's hope Greenspan doesn't do anything stupid to quash it.
Edit: my source for this news is "Jobs Data Hint at Small-Business Growth" By Tony Crescenzi at realmoney.com