Economists Base Their Rosy Predictions On Selected Statistics

Many economists have been using our historically low unemployment rate (4.5) as proof positive that the trade deficit or that the massive offshoring effort by the country’s largest companies, is having no effect on the outlook of the American economy. Ron Scherer and Simone Baribeau wrote in a Christian Science Monitor that the entire job growth, experienced this year in the U.S., has been compliments of the service sector. The service sector has added 815,000 in the first half of this year while the economy, as a whole, has added 709,000. Without the service jobs that have been added, we would have lost 106,000.

What was missed in this equation, from the BLS The Employment Situation Report for June, is that Medical Services added 371,000, Government added 347,000 and Food & Beverage added 387,000 this year. That means that all other sectors combined, lost a total of 396,000 jobs this year.

This “good economy” is not broad based nor is it reaching most people, as written about in Earning Power And The American Dream the average American worker is earning $5,000 less a year, in purchasing power, the he did in 1974. The only reason family wages have increased is that the average family has more working members.