| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

Analysis/Comment Last Updated: Aug 2, 2013 - 3:29 PM

Dr Peter Morici: Today's US jobs report
By Professor Peter Morici
Aug 2, 2013 - 10:02 AM

Email this article
 Printer friendly page
President Barack Obama reads a document prior to a meeting in the Oval Office, Aug. 1, 2013.

Friday forecasters expect the Labour Department will report the US economy added 175,000 jobs in July, down from 195,000 in June, and the unemployment rate will slip a notch to 7.5%.

The pace of jobs creation has been stronger in recent months; however, a noticeable shift toward replacing full-time workers with part-time employees masks a much tougher market for job-seekers. Since January, 833,000 more Americans reported working part-time, while 97,000 fewer have full time positions.

This is not surprising—a good deal of the new jobs are in the hospitality, retailing and other sectors where businesses may chop up full-time positions to avoid rising heath insurance costs for full-time employees mandated by Obama Care.

More part-time workers pushes down wages for ordinary workers and is one particularly poignant illustration of a public policy initiative intended to reduce income inequality that actually exacerbates it.

Under more normal circumstances about 360,000 additional jobs would be needed each month to pull down headline unemployment to 6%, but to attain a truly healthy labor market many more full time jobs are needed.

Adding in discouraged adults and part-timers who want full-time positions, the unemployment rate becomes 14.3%.

Slow growth is the ultimate factor behind income disparities.

In the second quarter, GDP was up only 1.7%, and has averaged a paltry 1% since President Obama’s reelection.

Despite greater optimism expressed by consumers in sentiment surveys, real consumer spending, net of autos, has softened. $200 billion in higher taxes imposed at the beginning of the year dwarf sequester spending cuts and have severely limited consumer spending on nonessentials.

Businesses remain quite pessimistic and investment remains subpar, dragging down growth. Obama’s proposal to tighten up and raise corporate taxes for more jobs programs—especially given the poor record of his targeted initiatives in alternative energy and vehicles—only adds to investor skepticism.

Long-term, the president’s proposal to further tax overseas corporate earnings, when other principal nations do not, will motivate more firms to move corporate headquarters and jobs to Ireland and other low-tax jurisdictions. Eaton, Sara Lee and many less well-known companies have already done so.

Major factors contributing to the slow pace of recovery include the huge trade deficits on oil and manufactured products from China, Japan and elsewhere in Asia—these slow demand for U.S. goods and services. Absent U.S. policies to effectively confront Asian governments about their purposefully undervalued currencies, and to develop more oil offshore and in Alaska, the trade deficit will continue to tax growth.

An artificially cheap yen will eventually undermine the auto-sectors recovery. It raises Japanese auto makers net on new cars by at least $2000, which they can pour into incentives, more features and product development. The latter will have particularly insidious consequences for Detroit’s ability to compete in the emerging hybrid and electric segments.

The recent surge in natural gas production, and accompanying lower prices, improves the competitiveness of energy-using industries like petrochemicals, fertilizers, plastics, and primary metals—as well as their consuming industries like industrial machinery and building materials. However, Department of Energy efforts to boost exports of liquefied gas will reduce the trade deficit and boost growth much less, and create many fewer jobs, than keeping the gas in the United States for use by energy-intensive industries.

Dodd-Frank regulations make mortgages, refinancing, and home improvement loans much more difficult to obtain. The recovery in housing construction, though welcomed, remains lackluster as compared to past recoveries. 

The high cost and slow pace of regulatory reviews are a constant complaint among businesses and dampen investment spending—and Washington shows no signs of listening. Government needs to subject policies to protect the environment and other regulatory goals to the same efficacy standards the market applies to commercial technologies—regulatory assessments and enforcement are needed but those must be delivered cost effectively and quickly to add genuine value.

Without better trade, energy, tax, health care, and other regulatory policies, stronger growth and the creation of enough good jobs are simply not going to happen.

Peter Morici,

Professor, Robert H. Smith School of Business, University of Maryland,

College Park, MD 20742-1815,

703 549 4338 Phone

703 618 4338 Cell Phone




Check out our new subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Latest Headlines
Disastrous 44-year War on Drugs and ignoring the evidence
HSBC & Tax Evasion: France/ Belgium issued criminal charges; UK/ Ireland nothing
Analysis: Germany world's top surplus economy; UK tops deficit ranks
Facts do not always change minds - can even entrench misinformed
Finfacts changes from 2015
Facts of 2014: Guinness not Irish; 110 people own 35% of Russia's wealth
In defence of dissent and Ireland's nattering nabobs of negativism
Dreams of European Growth: France and Italy facing pre-euro economic problems
Globalization's new normal needs permanent underclass - Part 1
MH17 and Gaza: who is responsible?
Israel vs Palestine: Colonization set for major expansion
Aviva Ireland's 'fund' runs dry and life cover to die for
We wish Martin Shanahan - new IDA Ireland chief - well but...
Ireland as an Organised Hypocrisy is in lots of company
Dr Peter Morici: Friday’s US jobs report won’t alter Fed plans to raise interest rates
Own Goal: Could FIFA have picked worse World Cup hosts?
Ireland: Spin and spending will not save bewildered Coalition
Irish Government parties set for 2-year vote buying spending spree
European Parliament: Vote No. 1 for Diarmuid O'Flynn in Ireland South
Dr Peter Morici: US April jobs report may show 215,000 added in April
Dr Peter Morici: Hardly time to call Obamacare a success
Celtic Tiger RIP: Change in conservative Ireland six years after crash
Dr Peter Morici: Five things to know about the Fed’s obsession with inflation
In age of acronym/ Google, Trinity to rebrand as 'Trinity College, the University of Dublin’
Hoeness case part of ‘painful’ change for Swiss bankers
Dr Peter Morici: The Cold War was only on vacation
Dr Peter Morici: US economy drags on Obama's approval ratings; Don’t look for changes in Washington
Dr Peter Morici: Bitcoin debacle shatters the myth of virtual money
Dr Peter Morici: US Tax Reform: Eliminate the income tax and IRS altogether
Wealth threatens the simple life in Gstaad, Switzerland
Irish journalists get cash payouts over 'homophobic' defamation claim
Irish academics get lavish pension top-ups as private pensions struggle
Dr Peter Morici: Inequality is President Obama’s highest priority, but solutions are naive
The Finfacts Troika: Better times ahead and a hangover to forget?
Dr Peter Morici: Volcker Rule arrives with the hidden jewel in Dodd-Frank financial reforms
Ireland's toothless fiscal watchdog threatens to bark
Analysis: Germany's current account surplus - - Part 2
The end of western affluence?
Bono's hypocrisy on Africa, corporate tax avoidance in Ireland
France like Ireland is run for the benefit of the old