AMERICAN BUSINESSES STILL HIRING
MUNCIE, Ind. -- Recent gyrations on Wall Street and the near economic collapse by several Asian nations have had an unsettling effect on America consumers and businesses, lowering confidence about future economic growth, says a Ball State University economic analyst.
But U.S. employment growth in August, as reported by the Bureau of Labor Statistics, should give that sagging confidence a much needed boost, said Patrick Barkey, director of the Bureau of Business Research.
Partly as a rebound from July's UAW strike against GM, the U.S. economy added 365,000 new jobs in August -- a 0.3 percent gain -- the largest since last year, the report said.
"The report serves as a much-needed reminder that, despite the smoke signals coming from abroad, nothing has arisen yet that threatens the job security that is at the core of our individual economic well-being," Barkey.
The fact that 95,000 new jobs were added in manufacturing in August was not surprising, given that more than that number were involved in the labor dispute against General Motors alone, he said.
Barkey believes the gains in manufacturing would have been more dramatic, except for an accelerated decline in several non-auto related, non-durable manufacturing industries. Particularly hard hit were the apparel industries, whose competitive position has seriously eroded from the strength of the dollar in recent years. Employment in those industries was down 2.3 percent from July, and has now shrunk by 8.3 percent, or about 68,000 jobs, from August of 1997.
For the durable manufacturing economy, things seem to have returned to their pre-strike levels of health. Aside from the 13.4 percent gain in motor vehicles industries, primary metals and stone, clay and glass industries showed the largest monthly increases, Barkey said.
The report also said the services-producing side of the economy, which accounts for four out of every five jobs, grew slightly faster in August than in the previous month. Leading the way were jobs in services industries, which added 135,000 jobs in that month alone.
"Particularly heartening was the strong rebound in hiring for the business services category, which saw a 0.7 percent gain in August," Barkey said. "This kind of hiring makes it clear that talk of the very real problem of labor shortages, especially in skilled occupations, is not going to go away just because the stock market is capturing all the headlines."
"While it is difficult to ignore the events occurring in Asia and Russia, much less those on Wall Street, the August employment report makes it clear that these events have not yet hit Americans in their pocketbooks," Barkey said. "Until job growth, and the income growth it creates, slows markedly, the vital signs for the American economy should continue to look good."
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(NOTE TO EDITORS: For more information, contact Barkey by E-mail at [email protected] or by phone at (765) 285-5926. For more stories visit the Ball State University News Center on the World Wide Web at http://newscenter.bsu.edu) Marc Ransford 9/9/98
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