Latest Jobs Report Not Exactly Awe-Inspiring
The July jobs report that was just published is another sign of the underwhelming continued growth of the economy. While economists predicted a gain of 193,000 jobs, the actual number was only 157,000, a pretty large miss. And while much of that was chalked up to a one-time hit from the closure of bankrupt toy retailer Toys R Us, that should have been anticipated and built in to mainstream projections.
One aspect of the jobs report to look at is the educational status of the workforce. As the job figures show, the seasonally adjusted labor force participation rate has been increasing for workers with less than a high school education (45.7% to 46.9%) and for those with a high school diploma but no college (57.1% to 57.9%), while it has been falling for those with some college (65.6% to 65.4%) and those with bachelor’s degrees or higher (74.2% to 73.4%). That means that much of the job creation that has occurred over the past several months can probably be chalked up to a rise in low-wage jobs.
That in turn doesn’t bode well for the prospects for overall wage growth as well as overall productivity. While it’s long been known that many of the rosiest jobs reports have been those that result from an increase in waiters and bartenders, the fact that the trend now continues to be towards hiring of lower-skilled lower-wage workers while employment of highly-educated skilled workers is declining means that the economy could be headed for a slowdown.
It’s yet another indication to investors that they need to be aware of a multitude of factors when looking at the economy. Whether it’s stock markets, employment, GDP, etc., investors need to look behind the numbers to see what’s actually going on. Take any spin put on economic data with a grain of salt, and do your own homework. When it’s your savings and your retirement that’s on the line, you owe it to yourself to do that. If you don’t, and you fail to take the necessary steps to protect your savings, you could end up costing yourself a lot of money.