September 7, 2007 (Jobs Byte)
Economy Loses Jobs for the First Time in Four Years
Jobs Byte by Heather Boushey
For Immediate Release: September 7, 2007
Contact: Alan Barber, (202) 293-5380 x115
The one bright spot in today’s report is that average hourly wages
grew at an annual nominal rate of 4.5 percent over the past quarter,
putting wage growth slightly above inflation.
The economy lost 4,000 jobs last month and prior months’ job gains were
revised downwards, raising the possibility that the economy may be at a
turning point. Employment grew by only 68,000 in July and 69,000 in
June, a downward revision of 81,000 jobs relative to initial estimates.
The Bureau of Labor Statistics (BLS) uses a statistical model to
predict how many new firms are established and how many go out of
business each month, but when the economy turns from expansion to
contraction, these models tend to overstate the number of new business
and understate firms closing, which is what appears to be happening
The report shows that the crisis in the housing sector is fanning
out to the rest of the economy. Employment losses were concentrated in
manufacturing, construction, temporary help, and local-government
education, while job growth continued in health care and food services.
Construction, manufacturing and temporary help have all been showing
job losses for some time, but the job losses are over twice the typical
monthly losses that these industries have seen over the past year.
Construction lost 22,000 jobs in August, with most of the jobs lost
in residential specialty trade contractors, which fell 18,000 last
month. Over the past year, construction has lost 90,000 jobs and the
job declines in August were nearly three times as large as the monthly
average. Manufacturing employment dropped 46,000 in August, a much
larger dip than in prior months. Over the past year, manufacturing has
lost 215,000 jobs, with losses spread across industries within