Posted on July 8, 2007
Filed Under Recruitment Industry | Comments Off on Economy Gains 132,000 jobs & 4% Rise in Wages
Credit:Washington Times, By Patrice Hill
July 7, 2007
The economy resumed healthy growth during the spring after a winter lull, an employment report confirmed yesterday, with 132,000 jobs gained last month and a nearly 4 percent rise in wages seen over the past 12 months.
Most of the new jobs were in services such as education, government, health care and restaurants, while manufacturing and retailing posted further large declines of 18,000 and 24,000 jobs apiece, the Labor Department report showed. Employment in construction ticked up by 12,000 despite the housing recession thanks to strong public and commercial building projects.
The job growth was enough to keep the 4.5 percent unemployment rate from rising, but not so much as to draw it down further. Adding to the upbeat tone of the report, job growth in April and May was substantially higher than previously reported at 122,000 and 190,000 respectively.
Stocks rallied on the news, with the Dow Jones Industrial Average gaining 46 points. Interest rates jumped in the bond market, however, as the report signaled stronger growth and inflation ahead. Scattered shortages of skilled workers helped stoke the solid rise in wages and hours and, along with surging oil prices nearing record levels in London, stoked worries that price pressures are heating up.
“You’ve got good wage gains combined with good employment gains,” said John Silvia, chief economist at Wachovia Corp, noting “that’s good for the consumer.” But he added that there are really two job markets â€” one for service professionals like doctors and accountants that is booming, and a weakening market in manufacturing and construction where jobs are disappearing.
Shortages of skilled and educated workers in the service professions are sending wage and benefits levels soaring, he said, while wages elsewhere are depressed by the decline in jobs and a surplus of workers available.
Christian E. Weller, an economist with the Center for American Progress, a progressive think tank, questioned the widespread perception on Wall Street that the job market and the economy are “strong.” He noted that average job growth this year at 145,200 a month is down more than 40,000 from last year, has fallen by two-thirds from 1990s levels, and is barely enough to keep up with the growth in the population.
“Job gains are far from robust,” he said, and average wages have not budged from the 4 percent level in the last year despite inflation that is running at around 3 percent.