The Times Continues to Fret Over Recession Fears
How good (or bad) was Friday's job report? Depends on which paper you take. Reading the Times' coverage from Peter Goodman and Michael Grynbaum, "Slowing Growth in Jobs Seen as Ominous Sign for Economy" (as well asGoodman's previous reporting) one could assume that Goodman is angling to out-gloom economics reporter Louis Uchitelle as the Times' resident dark-cloud hunter.
"The nation gained a modest 94,000 jobs in November, the Labor Department reported yesterday, pulling back considerably from the previous month in the clearest sign yet that the American economy was headed for a substantial slowdown.
"But the jobs report, a much-anticipated indicator of the health of the economy, also provided some comfort that the United States had not slipped into a recession and might not be weakening as rapidly as some experts feared. With business leaders expressing uncertainty about the prospects for further growth, analysts said, a better view of the direction of the economy was not likely to emerge until next year.
"'The expansion is intact, but increasingly frayed,' said Mark Zandi, chief economist at Moody's Economy.com. The job creation numbers are 'indicative of a very fragile economy that will come undone unless conditions improve soon.'
"The unemployment rate held steady at 4.7 percent for the third consecutive month, as a survey of households found strong growth in the number of people saying they found new jobs last month.
"On Wall Street, markets barely moved yesterday, absorbing the jobs data with ambivalence. The employment picture offered assurance that the economy was not plummeting and might continue to expand, sustaining corporate profits. But those very assurances sowed worry that the Federal Reserve would feel less pressure to ease interest rates aggressively when it convened on Tuesday.
The text box read: "An expansion continues, but economists say it's looking increasingly fragile."
What you won't read in the Times is the strong weekly wage growth of 3.8% for the year, which the Times blurred by adjusting the figure for inflation.As you can tell from the bolded highlights,the Times didn't waste a single word choice when it came to painting a worrisome picture of the economy - an economy that remains strong.
"While many Americans at the top of the income ladder have done well, wage gains in the current economic expansion have been generally weak. The inflation-adjusted hourly wage for rank-and-file workers has risen by just a penny over the last four years, from $17.62 in November 2003. Over the last year, they have actually fallen."
"A general sense of insecurity continues to gnaw at the economy, with consumer confidence dropping to its lowest level in more than two years, according to a survey released yesterday by the University of Michigan.
"Consumer spending makes up 70 percent of the American economy. Economists worry that a weakening job market will translate into less spending, which could deliver a downward spiral: weaker investment as sales dry up, and less hiring.
"Though yesterday's report eased worries that such a spiral had already begun, it did little to mute concerns about the future."
"The greatest concern continues to revolve around whether the real estate downturn and the subprime mortgage crisis will ripple out to inflict damage on the broader economy. Yesterday's data lent credence to such fears."
"Yesterday's jobs number was down markedly from the revised figure of 170,000 jobs created in October. It slightly topped recent expectations, though: Economists had raised their estimates for yesterday's numbers after a separate tally, the ADP National Employment Report, showed an unexpected surge in November payrolls.
"The Labor Department sharply dropped its estimate for job growth in September to 44,000, from an original estimate of 110,000 jobs. That makes September the worst month for job growth since early 2004.
"Over all, the report reinforced a general downward slide in the labor market that has been unfolding for two years.
"In 2005, the economy generated an average of 212,000 jobs each month. Last year, the pace slowed to 189,000. In the first 11 months of this year, the rate has dropped to 118,000 a month. Yesterday's report nudged the figure down even more."
In contrast, the Washington Post story on the same subject, "Hiring, Wages Increase Modestly," was mixed but far more upbeat. Neil Irwin began:
"Companies created jobs at a moderate pace in November, the government said yesterday, suggesting that the labor market has not suffered excessively from the housing and financial market crises.
"U.S. employers added 94,000 jobs to their payrolls last month, the Labor Department said, and the unemployment rate was unchanged at 4.7 percent. That is hardly a blockbuster pace of job growth - it takes about 125,000 new jobs a month just to keep up with population growth - but it was strong enough to give economists confidence that consumer spending will not decline because people are out of work."
The Post not only cited the 3.8% rise in average weekly wages but even called it "promising news" - the sort in short supply at the Times lately.
"In other promising news for the economy, the average weekly wage for non-managerial workers rose $2.70, to $595.89, and is up 3.8 percent for the past year."