September 10, 2019

The number of jobs in August was up just 1.4 percent from last year, the smallest increase in the last two years, and down significantly from the 2 percent rate of January. Any further slowing will be the worst since the big recession.

That won’t necessarily lead to another recession – certainly not one of that epic scale – but the slowing of job growth in every major sector in the last few months suggests that an easy fix is not in the works because the economic problem is system-wide.

It’s much easier for the US economy to go into recession these days because it’s mainly a¬†service¬†economy. It’s easy for consumers to cut back on services if they feel a bit pinched. You need food, shelter, your car, your phone, some clothes – but you don’t need the extra latte, the extra movie, you can put off the trip to the Rockies, you might even delay that visit to the doctor.

Jobs in August were up 2.4 percent in healthcare, 2.1 percent in business services, 1.9 percent at restaurants, 1.3 percent in finance and 1 percent in manufacturing. Jobs were down in retail and almost flat in government.

Construction jobs increased 2.3 percent, not even half the 5 percent rate of January. A further slowing will mean that businesses are delaying new projects.