By John E. Carey
Peace and Freedom
January 5, 2008
Dark news of trouble for the U.S. economy continued to pile up at the start of 2008.
The dollar fell Friday as a disappointing US payrolls survey highlighted soft economic conditions that boosts the risk of recession and further rate cuts by the Federal Reserve.(AFP/File/Bertrand Langlois)
On Friday, January 4, 2008, a Labor Department report said the U.S. economy edged a step closer to recession in December by producing only 18,000 new jobs, its worst performance in four years, and sending the unemployment rate to a two-year high of 5 percent.
Outside government, private sector jobs actually shrank by 13,000 in December.
According to the Labor Department, lay-offs were across the spectrum of American jobs.
Manufacturers, builders, banks and even retailers laid off more than 100,000 workers at the height of the Christmas shopping season.
The construction trades shed 49,000 jobs and manufacturing lost 31,000 workers.
The housing crisis has put hundreds of thousands of people involved in the construction trades out of work. The trickle down impact is hitting furniture manufacturers and all kinds of other businesses from appliance manufacturers to curtain and carpet makers.
Gas and home heating oil price increases seem likely following reports that petroleum has now hit $100.00 per barrel. Gasoline prices impact all drivers and have already contributed to price hikes on everything from milk and eggs to FedEx deliveries.
Tightening credit, a slumping housing market, oil prices and a staggering stock market are starting to take a toll on the American housewife and wage earner.
Peter Gosselin and Walter Hamilton wrote in the Los Angeles Times, “The [job] losses were widespread, suggesting that the economy’s troubles run deep. They were compensated for by gains in only a few areas, especially health care, food service and government.”
“Economists viewed the report as the most powerful indication to date that the United States could well be falling into a recessionary downturn,” wrote Peter Goodman and Mike Grynbaum in the New York Times.
“This report raises threats” because of the way it undercuts consumers, said Stephen Gallagher, economist at Societe Generale. “Up to this report, employment gains have been seen as sufficient to support the consumer” and keep the economy afloat.
President Bush has been upbeat on the economy but he met yesterday with a host of economic advisors to hear options on how the U.S. government can jump start the economy.
“This economy of ours is on a solid foundation, but we can’t take economic growth for granted,” he said after meeting with a White House working group on financial markets.
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