May 2008 Jobs Report and Wages

Here are the job market and compensation numbers for April 2008 (based on the job report):

Net loss of 49,000 jobs in the month (revised to loss of 62,000 jobs)

  • April modified to a loss of 28,000 jobs (was estimated as a loss of 20,000)
  • Analysts expected a loss of of either 58,000 or 60,000
  • Five straight months of job losses
  • For 2008, 324,000 jobs have been cut, an average of 65,000 a month
  • The private sector has cut 411,000 jobs over 6 months (68,500 average)
  • The number of people in the workforce increased by 577,000
    • It was 173,000 in April
    • College students

Unemployment rate rocketed up to 5.5% 

  • Biggest monthly jump in 22 years
  • It is the highest its been in 3 1/2 years
  • Forecasters thought the rise would be to 5.1%
  • Some analysts believe this number will be revised down because of the flood of college students entering the workforce
    • Taking presumptive teenagers out of the mix the unemployment still rises from 4.5% to 4.8%
    • This number was 4.0% a year ago
  • Long term unemployed increased from 17.8% to 18.3% in May
  • Paul Ashworth said. “The economy has little forward momentum, employment is shrinking and the unemployment rate could reach 6 percent by the end of the year.”

Specific Segment Job numbers:

  • Construction lost 34,000 jobs
  • Retail lost 27,000
  • Professional and Business Services lost 39,000
  • Manufacturing lost 26,000 jobs (46,000 jobs lost in April – good sign?)
  • Healthcare added 34,000
  • Education and Health Services added 54,000 jobs
  • Temp workers loss 30,000 jobs
    • 150,000 lost over the year
    • Considered a bellwether for the economy because these jobs go first
  • Public sector added 17,000 jobs


  • The surge of college students created a lot of distortion on the unemployment percentage. This can be revised next month or maybe evened out in September (although no vacuum was mentioned this past September)
  • The birth/death model is fluctuating to a negative
  • Spending on fuel as a share of wage income rose above 6%. That exceeds the percentage seen during the 1974-75 and 1990-91 oil-price shocks and approaches the 7% to 8% seen during the 1980-81 price surge


  • Paul Ashworth, senior US. economist with London-based Capital Economics, noted that the pace at which jobs were being lost has actually slowed
    • In the first three months this year, job losses averaged about 83,000 monthly, but in April and May, the pace slowed to 38,500
  • Although employers have cut jobs for five consecutive months, the number of job losses has so far been mild by the standards of previous recessions
    • At the start of the 2001 recession, companies shed around 110,000 jobs each month and almost 130,000 when the 1990 recession began

Job Report Stats Page

Small Business and Energy

Yesterday I wrote a post commenting on news from the IEA that it will take $45 trillion dollars and 40 plus years to get to an energy solution that is desirable. Here is an excerpt of my post:

What the IEA is mostly talking about from an expense perspective is the
build out of the infrastructure to begin with. But much of it is built
or is unneeded entirely. There isn’t a silver bullet in the energy
revolution. It is an assortment of smaller technologies and habit

My prediction is that a few changes that seem
irrelevant to the scale of the problem will be catalysts to another
level of energy utilization. I think it will happen within 10 years and
then take another 10 years for the realization of it to peak.

Well, just reading the NY Times today provided further optimism for this stance. The piece is called Nature Gave Him a Blueprint, but Not Overnight Success and it is about a company called Pax Scientific. The company has efficiency solutions that it engineered from understanding how liquid and gas moves (non linear). This company was not growing at the rate it expected, but once its customer’s understood the implications the sales have seen a dramatic uptick.

I feel there are at least several small companies like this that are ready to see their potential realized.

Energy Cost and Investment Prediction

The International Energy Agency (IEA) is calling for an increase in investment in energy development over the next 40 plus years (to 2050). There is nothing news worthy about that statement. Oh, I forgot to mention that they named a number needed to compensate for the energy needs of that time. And that number is news worthy.

$45 Trillion Dollars

Yep, $45 trillion dollars is what the IEA came up with. I don’t believe this number, but I do like the intention. If their goal was to get the issue into major news channels (NY Times, CNN, and the like) then they succeeded and the problem is very expensive. When people talk about the amount of energy generated, the means to get it, and the amount consumed it gets to be a tricky equation, especially when you extrapolate it out for time.

What I don’t like about reports like this is the unavoidable assumption of linear adoption or usage. But that hardly happens. For instance, think about the cell phone. Cell phones became much more consumer oriented in the late 1990s. This is after 10 years or so of being on the fringe. The infrastructure wasn’t built. But once they became semi affordable the adoption rate took off and the prices further plummeted. It is now about 10 years later and everyone has a cell phone and some people have two. There were two innovations that made this happen: the cell phone components became small and cheap enough to lower the cost and the financing of the phone units themselves became subsidized by the carrier with contracts. What the IEA is mostly talking about from an expense perspective is the build out of the infrastructure to begin with. But much of it is built or is unneeded entirely. There isn’t a silver bullet in the energy revolution. It is an assortment of smaller technologies and habit changes.

My prediction is that a few changes that seem irrelevant to the scale of the problem will be catalysts to another level of energy utilization. I think it will happen within 10 years and then take another 10 years for the realization of it to peak. Who ever invests in this turn will get very very rich. To the point of overtaking Bill Gates as the world’s richest man.

GDP Revised, Consumer Spending, and Productivity Stats for early 2008

Some new stats:

US Productivity grew at 2.6% in the first quarter of 2008

2.5% was expected by analysts
2.2% was the original prediction

Annual output is 0.7% (previously reported as 0.4%)

Worker hours reduced 1.8% (US economy in a funk)

  • Third quarter in a row that saw declines in worker hours

Unit labor costs rose by an annual 2.2%, faster than 2.0% estimated

  • 4.7% for the final quarter of 2007 – inflation concern

GDP revised to 0.9% from the original number of 0.6% for the first quarter of 2008

Consumer spending rose 0.2% in April ’08

Income growth was also 0.2%

  • Would have been 0.1% if not for the stimulus package

Businesses have cut jobs for four straight months

The personal savings rate is 0.7%

Ideas, Genius, and Perspective

Genius, obsession, serendipity, and epiphany. These are words Malcolm Gladwell used in a writing called In the Air to explain the algorithm of invention. But as he writes, he goes on to say that although these can lead to invention, they aren’t the only means to get there.

In an earlier post called Types of Intelligence and Challenge Approaches I mention a study completed in the 1960s that determined humans use four types of approaches to solve challenges: analytically, procedurally, relationally (collaboratively), and innovatively. The human brain sometime prior to adolescents abandons two of the approaches and focuses on the other two. My guess is the emphasis on deductive and inductive reasoning in the world today means that analytical and procedure approaches are the two that persist in most people.

But another article I’ve commented on is by Daniel Pink called What Kind of Genius are You? and it’s premise is there are two types of genius – Conceptualists and Experimentalists. Conceptualists create their acclaimed art early in their lives and Experimentalists continually improve their craft to an eventual apex.


Many geniuses peak early, creating their masterwork at a tender age …

The Great Gatsby
F. Scott Fitzgerald
Age 29

Les Demoiselles d’Avignon
Pablo Picasso
Age 26

Citizen Kane
Orson Welles
Age 26

The Vietnam War Memorial
Maya Lin
Age 23

The Marriage of Figaro
Wolfgang Mozart
Age 30


… while others bloom late, doing their best work after lifelong tinkering.

Huckleberry Finn
Mark Twain
Age 50

Château Noir
Paul Cézanne
Age 64

Alfred Hitchcock
Age 59

Frank Lloyd Wright
Age 70

Symphony No. 9
Ludwig van Beethoven
Age 54

But you’ll notice that this list is made up of artists. Maybe even of people who are relational and innovative challenge solvers. These people use a different part of the brain. Not a literal part, but rather an emotional part.

Many people remember the movie Good Will Hunting. The lead character is Will Hunting, a genius. The story is a very entertaining illustration of the imperfections a brilliant mind can have. But lets get back to Gladwell’s writing In the Air. He wants people to realize that many leaps in invention happen one way or another. It isn’t a touch from God. It is a coming together of ideas. What is most important is having a multitude of idea experience at your disposal. Someone like Will Hunting or Alexander Graham Bell have it all accessible as their mind arranges information, but others get there by having friends, acquaintances, and coworkers who fill that void for them. Most of the time all that comes from it is idle day dreaming. But there are people who take the ideas and move them forward – be it a scientific discovery or the telephone. What is more amazing is that there are usually at least two people doing this. Here are some examples behind the observation of “multiples”:

  • Newton and Leibniz both discovered calculus
  • Charles Darwin and Alfred Russel Wallace both discovered evolution
  • Three mathematicians surmised decimal fractions
  • Joseph Priestly and Carl Wilhelm Scheele discovered oxygen a year apart
  • Charles Cros and Louis Ducos du Hauron invented photography
  • John Napier and Henry Briggs in Britain and Joost Burgi in Switzerland invented logarithms

What this proves, along with many other examples, is ideas are not exclusive, but rather a race against time. And unless you are one of the few people who uses collaborative and innovative challenge solving methods, I suggest you take your idea to the US Patent Office as soon as you can. Chances are someone else is already there.