The Economy: Good News, Bad News


Image courtesy of Microsoft

The Economy: Good News, Bad News
| Published May 2, 2014 |

By Thursday Review staff

American ambivalence about the economy seems to be the only constant these days. We feel good about things, except for all those times we feel bad.

New numbers just released by the U.S. Labor Department show that unemployment has reached its lowest level since the very start of the Great Recession in September 2008. Current figures show unemployment at about 6.3%: about as optimistic a number as has been seen in over seven years.

Production and factory output increased, and as a result factories hired more people. The weather finally—sort of—improved, after months of bitter cold and snow, and that meant that home construction and business construction could begin again in earnest, along with the parallel increase in real estate and home sales. Some heavy retail layoffs already planned were deferred, slightly, which meant that some people got to keep their jobs. Of the new jobs recently created, construction added about 32,000 workers and retail added about 34,500.

Much of the sharp increase in construction hiring came as a result of spring weather and a delayed start to the traditional building season. It is not clear how deeply recent heavy rains, flooding and storm damage will affect this uptick, but one thing seems clear, potential home buyers are shopping again, at least tentatively.

The addition of 34,500 retail jobs came as a surprise to some economists and business analysts who were braced for the impact of numerous retail downsizings and layoffs, particularly by JC Penney, Target, Staples, Radio Shack, Family Dollar and other stores. JC Penney has said it will lay off as many as 2000 employees later this year, and Radio Shack plans to shut down nearly 1000 retail locations by the middle of next year.  Still other retailers were in hiring mode.

Further dampening the good news is that the majority of those new retail jobs are low paying jobs, many of them part-time, and some are without benefits. And of the over 200 thousand new jobs created in April, many were connected directly to job placement agencies and temporary agencies, indicating reluctance by employers to hire permanent workers.

The other problem with the optimistic April numbers, say a few of the pessimists, is that participation in the workforce dropped again measurably. Participation indicates the percentage of working-age people actually engaged in traditional employment—full time or part time. This could mean that millions are either not looking for work, or have chosen to work in non-traditional fields not measured by the Labor Department’s figures.

Still, as some have argued, why rain on the parade? The spike in hiring could be easily and most readily interpreted as a sign that the U.S. economy, after years of struggle through recession, is finally staggering its way back toward a solid footing.

Related Thursday Review articles:

Staples to Close 12% of Stores; R. Alan Clanton; Thursday Review; March 7, 2014.

Radio Shack’s Image Deficit; Thursday Review; March 4, 2014.