“A lot of them are gone for good. The age of the U.S. and world economy being driven by the U.S. consumer may be in the past. We need to become more of a nation of producers rather than a nation of consumers.”
– Nigel Gault, chief U.S. economist for IHS Global Insight
Rex Nutting points out that the huge job losses recorded by BLS are not evenly distributed. This recession has hit the retailers particularly hard:
“Recessions aren’t equal-opportunity unemployers. Usually, the pain of job loss is felt most acutely among factory workers, while the vastly larger number of people who work in services, such as banking, retail or health care, are much more likely to retain their jobs.
But this recession is showing America something new: For the first time ever, more private-sector services jobs have been lost than goods-producing jobs have been lost. Since the recession began in December 2007, 1.94 million service jobs have been eliminated compared to 1.80 million in manufacturing, construction and mining.
Many of those lost jobs were in retailing, which has seen its largest job losses since the data collection began in 1939. Through January, 570,000 retailing jobs were gone, representing a record 3.6% of retail jobs. Retail companies have stepped up the pace of layoffs since the horrible holiday sales season ended. More than 50,000 job cuts have been announced since Jan. 1 by major retailers such as Circuit City, Home Depot, and Macy’s. On Thursday, the chains reported that sales were weak again in January, results that are likely to prompt even more layoffs.
Some economists say many of those jobs will never come back as Americans wean themselves from the easy credit that’s fueled their consumption for the past 25 years.”
If the US consumer is no longer the engine driving global economic growth, what will replace them? Can China or India become mad gadget loving consumerists? Or, are we on the path to a much slower growing global economy — at least for the foreseeable future?
Biggest job loss ever for retail sector
MarketWatch, 12:42 p.m. EST Feb. 6, 2009