Wednesday, November 3, 2010
By: Michael Pento
The employment picture in the U.S. continues to get much worse. The headline number from the ADP report for October showed the economy added just 43k private sector jobs. However, the details of the report showed that the economy lost 34k jobs in the goods producing sector. Therefore, not only are we not creating enough jobs to keep up with the increase in the workforce but we are also still losing jobs in the sector of the economy that is best at creating real wealth.
Service-sector jobs rose by 77,000 last month, while factory jobs fell 12,000. This means job growth is coming from new hires that help sell foreign made goods to U.S. consumers. It also means that we are borrowing more money and will not have the productive output generated to be able to pay it back.
In another report released today on the labor condition of the U.S., employers announced job cuts totaling 37,986 during the month, 2.2% above those planned in September, according to global outplacement firm Challenger, Gray and Christmas, Inc.
The truth is that job growth is anemic and what little private sector hiring that actually occurred came from the service sector of the economy. Therefore, the conclusion can only be that the outlook for the economy is bleak.
Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.