Indications have emerged that job market growth may have cooled considerably in January, or that layoffs may have surpassed job additions. If so, it would be the first time in more than a year the economy has lost workers.
Two new polls from Gallup indicate the seriousness of the problem.
In the first, the research firm reports:
The U.S. Payroll to Population employment rate, as measured by Gallup, is trending downward in January and is lower compared with a year ago. Unemployment is also worsening, but is still better than in January 2012.
And in the second:
One in four Americans say now is a “good time” to find a quality job — more than have said so since March 2008. However, the large majority, 70%, still says it is a bad time.
It is difficult to argue that, despite progress, 70% is a good number.
The Gallup data indicate that unemployment could rise to 8% when the federal numbers are posted in early February.
The Fed’s Beige book hinted that, although the economy has improved slightly in all regions of the country, job additions are still sparse. Perhaps that can be blamed on fiscal cliff problems. Just as likely, the upcoming battle over the budget cap and federal expense cuts could cause employers anxiety. Or, the tiny recovery has run its course because, among other things, businesses and individuals continue to have relatively high levels of debt leverage. Stronger business and consumer activity may have run its course late last year, as buying activity increased leverage once more. Financially, America could have become exhausted again.
Gallup may try to spin the improvement in American’s perceptions about whether it is a “good time to find a quality job” as positive compared to the recent past. But the truth is that most people believe they are trapped in jobs that will not pay them more in the future than the past, if real income improvement over the past decade is an indication. Anxious people make poor consumers. And poor consumers cripple many businesses, and eventually most of the U.S. economy.
January may be a turning point in the U.S. economy, but not a good one.