Jobless recovery

As the economy slides from recession to recovery, new employees are not coming along for a ride - as evidenced by the loss of another 216,000 payroll jobs in August. And the folks who still have jobs aren't all that well off either - employers kept working hours near a record low in August. Here's a summation from Bloomberg:

The preconditions for gains in payrolls, including giving the army of part-timers longer hours and taking on additional temporary employees, weren't met last month. At the same time, with economic growth forecast to resume this quarter, the figures set the stage for a surge in worker productivity and drop in labor costs that will stoke corporate profits.

Friday's jobs report had very few surprises - and in a way, that was the disappointing part. Perhaps we were looking for signs that the recovery will not be as halting as most economists believe. "It's great for business and terrible for households" for coming months," said JP Morgan economist Michael Feroli.

Here's a telling stat: There were almost 9.1 million Americans working part-time last month who would rather have a full-time job. That's up 278,000 from July and is among the highest levels since records began in 1955.

From the NYT:

Most economists see recent signs of improvement as more about pulling away from the disaster of last fall -- when the investment banking giant Lehman Brothers collapsed, spreading fear throughout the financial system -- and less about moving toward vigorous growth. After years of borrowing against the soaring value of homes, tapping abundant credit cards and harvesting stock market earnings to live in excess of their incomes, millions of households are being forced to pare spending. That casts a shadow over consumer spending, which makes up 70 percent of the nation's economic activity.

Here's what Millan L. B. Mulraine of TD Securities has to say (from Real Time Economics):

The continued moderation in the pace of job losses does offer some encouragement on the state of the U.S. labor market. Nevertheless, with the soft economic backdrop, we are likely to see further job losses in the coming months as U.S. businesses continue to adjust their payrolls in the face of weak demand, which will likely limit the extent to which consumer spending can be depended upon to power the eventual recovery. It is important to note, however, that the labor market is generally a lagging indicator of economic activity.