The Sky is Falling!

By Andrew Paparozzi
In April 4, 2008

That’s the cry we’ll be hearing more of following release of March employment data by the Bureau of Labor Statistics. But, is it? No doubt, we may be in the early stages of a recession. At best, we are in a period of very anemic growth.

The data show that the economy shed 80,000 nonfarm payroll jobs in March, bringing the job loss for the first quarter of 2008 to 232,000. (Both January and February were revised downward from earlier estimates of -22,000 and -63,000, with each month now showing a decline of 76,000.) Not exactly the picture of an expanding economy. Declines in construction (-127,000) and manufacturing (-129,000) were the main culprits in the overall job loss during the first three months of the year. Other major sectors showing sizable declines for the period included: retail (-74,700), professional and business services (-95,000), and financial activities (-24,000). These declines were partially offset by gains in education and health services (131,000), leisure and hospitality (47,000) and government (54,000). So, in the midst of these challenging times, it seems that we’re still trying to learn, take care of our health, and have fun.

The unemployment rate rose to 5.1% in March and averaged 4.9% for the first quarter of the year. For all of 2007, the jobless rate averaged 4.6%. Since labor markets tend to be a lagging indicator, we can expect the unemployment rate to move higher throughout the year. Following the 2001 recession, the unemployment rate peaked at 6.3% in June 2003. The latest consensus forecast from Blue Chip Economic Indicators has the jobless rate peaking at 5.5% in the fourth quarter of this year and essentially remaining at that level in 2009. Is the sky falling? No. However, we are in a correction that needs to run its course in order to undo excesses that developed in recent years, particularly in housing and easy credit. We’ll break down print’s employment picture in our next posting.

Joseph V. Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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