Population Grows, Workforce Doesn't

For the first time since World War II, the U.S. Gross Domestic Product has shrunk for four straight quarters (and five of the last six). Another post-WW2 first: we are completing a ten-year period with no net new jobs (see chart above). Wages and salaries, which drive recoveries in spending (not to mention tax collections), fell 4.7 percent in the 12 months through June, the biggest drop since records began in 1960. In other words, we have more dependents than ever before in a shrinking economy less able to support them.

Today brings the "good" news from the Bureau of Labor Statistics that "only" 247,000 jobs were lost in July. Numbed by monthly losses twice as large earlier this year, we are coaxed by the media to accept that a quarter-million new pink slips somehow bespeak an imminent recovery. I again remind you that the BLS data are "adjusted," and perhaps this month adjusted more than usual in order to pump up consumer and investor psychology (see Chris Martenson's take here). For now we have an Economy of Hope, but not yet one of results.

[update, September 4: Sure enough, the BLS has revised the July number to 276,000 jobs lost, a number nearly 12% uglier than the preliminary estimate. The final "official" number will not be known for another month.]