This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Not Much Hope for a Better Jobs Market

NEW YORK ( TheStreet) -- Forecasters expect the Labor Department on Friday will report the economy added 175,000 jobs in July, down from 195,000 in June, and the unemployment rate will slip a notch to 7.5%.

The pace of jobs creation has been stronger in recent months; however, a noticeable shift toward replacing full-time workers with part-time employees masks a much tougher market for job seekers. Since January, 833,000 more Americans reported working part time, while 97,000 fewer have full-time positions.

That is not surprising -- a good deal of the new jobs are in the hospitality, retailing and other sectors where businesses may chop up full-time positions to avoid rising health-insurance costs for full-time employees mandated by ObamaCare.

More part-time workers pushes down wages for ordinary workers and is one particularly poignant illustration of a public-policy initiative intended to reduce income inequality that actually exacerbates it.

Under more normal circumstances, about 360,000 additional jobs would be needed each month to pull down headline unemployment to 6%, but to attain a truly healthy labor market, many more full-time jobs are needed.

Adding in discouraged adults and part timers who want full-time positions, the unemployment rate becomes 14.3%.

Slow growth is the ultimate factor behind income disparities.

In the second quarter, gross domestic product was up only 1.7%, and on average has grown a paltry 1% since President Obama's reelection.

Despite greater optimism expressed by consumers in sentiment surveys, real consumer spending, net of autos, has softened. $200 billion as higher taxes imposed at the beginning of the year have dwarfed sequester spending cuts and severely limited consumer spending on nonessentials.

Businesses remain pessimistic and investment remains subpar, dragging down growth. Obama's proposal to tighten up and raise corporate taxes for more jobs programs -- especially given the poor record of his targeted initiatives in alternative energy and vehicles -- only adds to investor skepticism.

Long term, the president's proposal to further tax overseas corporate earnings, when other principal nations do not, will motivate more companies to move corporate headquarters and jobs to Ireland and other low-tax jurisdictions. Eaton Corp. (ETN), Sara Lee and many less well-known companies have already done so.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%
YHOO $36.67 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs