Most people who must work for a living take little comfort on this Labor Day weekend from Friday’s report that payrolls swelled by 249,000 in August, far more than expected, while the unemployment rate edged down to 5.6 percent from 5.7 percent in July.
Workers who must keep a wary eye out for right-sizers and staff pruners-and color of collar makes no difference-pay more attention to less positive developments.
The employment report, for example, showed that only 12,000 of those new jobs were in the manufacturing sector, which is higher-paying than others.
Indeed, the closely watched index of manufacturing conditions sank to 46.9 in August from 50.5 in July, which suggests contracting business conditions, according to the National Association of Purchasing Management.
A day earlier, the Commerce Department had reported that factory orders for manufacturered goods fell 1.3 percent in July, the fifth decline in six months.
Bond traders giggled with delight Friday when they found out the number of hours worked fell 0.5 percent last month while average hourly earnings eased by 2 cents, seemingly ruling out any wage inflation threat.
Adding to the traders’ euphoria, the govenment said its index of leading economic indicators, designed to predict growth over the next six months, declined by 0.2 percent in July.
We have a modest proposal to give hope to less-than-affluent borrowers: Federal Reserve policymakers, who next meet Sept. 26, should quit sitting on their hands and cut short-term interest rates again.
