Rep. Maloney: Widespread Private Sector Job Losses Indicate Housing/Credit Spillover
WASHINGTON, DC – January 4, 2008 – Congresswoman Carolyn B. Maloney (D-NY), Vice Chair of the Joint Economic Committee, issued the following statement today regarding the Bureau of Labor Statistics’ December 2007 employment situation:
“Employers have hit the brakes on hiring in the face of the mortgage crisis and credit crunch. With the unemployment rate rising and widespread job losses throughout the private sector, the contagion has clearly spread to the labor market. Too many American families have lost ground in the Bush economy and are working harder than ever just to keep up with rising living expenses. The President may finally be waking up to the realities that American families face daily, but he’s still not ready to act. We need to take steps now to get the economy back on track and to strengthen the safety net for workers.”
Highlights from the BLS December 2007 employment situation:
Unemployment rises. The unemployment rate rose from 4.7 to 5.0 percent and the share of the population with a job fell from 63.0 percent down to 62.7 percent. The employment losses were concentrated among men: the male employment rate (the share of all men aged 20 and over with a job in December) fell from 72.9 percent to 72.5 percent, while the female employment rate fell by only 0.1 percentage point, from 58.1 to 58 percent.
Job losses were widespread across the private sector. Private-sector employers shed 13,000 jobs in December, while government added 31,000 jobs. Manufacturing lost 31,000 jobs, for a total loss of 212,000 for the past year. Retail trade lost 24,000 jobs last month. Declining employment occurred alongside a drop in hours for production workers.
The effects of the housing collapse are being felt throughout the labor market. Construction lost 49,000 jobs last month, for a total of 195,000 jobs over the past year. Losses occurred in both residential and non-residential construction. Over the past year, non-residential construction had continued to add jobs, but it appears that this sector has now has finally succumbed to the same downward spiral as residential construction. “Credit intermediation,” which includes mortgage brokers, lost 7,000 jobs last month, for a total of 75,000 over the past year. Temporary help services, often a leading indicator of employers’ willingness to hire, added no jobs in December.
December’s wage growth was far below the pace of inflation. The annualized quarterly rate of wage growth in December was 3.3 percent, far below the last reported quarterly inflation growth of 5.6 percent in November. The failure of wages to keep pace with inflation should give the Federal Reserve room to continue to lower rates.
Jobs have become harder to find. The share of the unemployed who are “permanent job losers,” that is, they were fired or laid off and their employer indicated that they have no intention of rehiring them, has increased sharply over the past year, from 35.7 to 40.1 percent. Over the past year, the share of part-time workers who would prefer to work full-time but can only find a part-time job has risen from 17.4 to 19.3 percent.