US Jobs Decline Continues

Readers want to know why I have
not reported on the

payroll jobs statistics for the past two months.
Does this mean, they ask, that the situation has turned
around and that the US economy is again creating jobs in

export and import-competitive sectors?

Alas, no. I did not write about
the past two payroll jobs data reports, because it is
the same distressing story that other readers say they
are bored with hearing.

The July report from the

Bureau of Labor Statistics lists 113,000 new jobs,
all of which are in services.

• "Leisure and hospitality"
  accounted for 42,000 jobs, most of which are
  waitresses and bar tenders.

• "Education and health
  services" accounted for 24,000 jobs.

• "Professional and business
  services" accounted for 43,000.

• Manufacturing lost another
  15,000 jobs.

In the US today, government
employs 7.7 million more people than does manufacturing.
Little wonder we have an

$800 billion annual trade deficit when the
government sector is larger than the manufacturing
sector.

American economists are yet to
face up to the fact that offshoring high productivity,
high value-added jobs that pay well and replacing them
with waitresses and bartenders is a knife in the heart
of the US economy. Charles W. McMillion of

MBG Information Services reports that compensation
is falling behind price rises and that the US economy
has been kept afloat by consumers overspending their
disposable incomes by drawing down their accumulated
assets and going deeper into debt.

McMillion reports that according
the Bureau of Economic Affairs, households outspent
their disposable incomes by 1.5% in the second quarter
of this year, a rate of dissaving equaled only by the
depression year of 1933.

McMillion also reports that
recent BLS data indicates that 25 states have lost
manufacturing jobs year over year and that 25 states
have lost jobs in the information sector.

Little wonder that permits for
new private housing are down 20.5% year over year and
that new housing starts are down 13.3% year over year.
What will we do with the millions of illegal Mexicans

when construction jobs dry up?

Wage data covering 82% of all
private sector jobs show that the purchasing power of
weekly wages today is less than it was when the economic
recovery began in November 2001. What kind of economic
recovery is it when the purchasing power of wages falls
instead of rises?

In my opinion, the recovery was
artificial. It was based on extremely low interest rates
orchestrated by the Federal Reserve. The low interest
rates discouraged saving, but the low rates reduced the
mortgage cost of real estate, inflated home prices and
encouraged consumers to refinance their homes and to
spend the equity.

The federal government has been
overspending its income also, and has wasted a minimum
of

$300 billion on an illegal, pointless, and lost war
that has turned Iraq into a terror zone.

It is unclear how much longer the
world will trade Americans real goods for pieces of
paper that the US economy cannot redeem with tradable
goods and services.

Considering the loss of good
jobs, the

high debt burden, and the dependence on imports, it
is unclear what will enable America to pull herself out
of the next recession.

Perhaps growing ranks of the
unemployed will become cannon fodder for Bush`s wars in
the Middle East.

COPYRIGHT

CREATORS SYNDICATE, INC.

Paul Craig Roberts
[email
him] was Assistant
Secretary of the Treasury in the Reagan Administration.
He is the author of

Supply-Side Revolution : An Insider`s Account of
Policymaking in Washington;
 Alienation
and the Soviet Economy and

Meltdown: Inside the Soviet Economy,
and is the co-author with Lawrence M. Stratton of


The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice. Click

here for Peter
Brimelow`s Forbes Magazine interview with Roberts
about the recent epidemic of prosecutorial misconduct.