The U.S. economy added 142,000 jobs in August, the lowest number in eight months. Although new job creation was low, the average time worked by full-time employees climbed to 46.7 hours per week, the highest since 2001-02. Salaried workers are also working longer, an average of 49 hours per week. Due to the lingering aftermath of the Great Recession, over 46 million Americans are receiving food stamps, approximately 14% of the population.
A Federal Reserve report notes that the median income of the richest Americans (the top 10%) has reached $223, 200. During the past three years, their income rose 2%, the only group whose median income increased. Income declined for every other group. For the middle 20%, median income dropped 6 % to $48,700.
The central bankers in America and Europe have spotted a worrisome labor market trend. There are indications that the labor markets in America and Europe are splitting into two segments with predominantly secure, skilled jobs in one and insecure, mostly unskilled work in the other. If not addressed, the bankers think the fragmented labor market will make it more difficult for workers to gain the skills needed to enable them to move up the job ladder.
According to the Federal Reserve, the U.S. economy strengthened moderately in all regions of the country in July and August. Consumer spending, auto sales and the tourism sector did well. Although it has been the weakest since the Second World War, the U.S. economic recovery has continued for five years. During the second quarter of 2014, the economy grew at a surprising rate of 4%.
Following a decline in June, Construction activity climbed to a seasonally adjusted annual rate of $981.3 billion in July, the highest level since December 2008. The Institute for Supply Management announced that its services index rose to 59.6 in August. It was an indication that U.S. service firms expanded at the fastest pace since the index measurement was established in January 2008.
Financial overindulgence is mostly associated with conduct of the banking and mortgage sectors that resulted in the 2007-08 financial crash. During the last 12 months, America’s corporations appear to have been overindulging in another way. They have repurchased more than $500 billion of their own stock with money that could have been invested in business expansion projects and/or research and development. The slow pace of the recovery and the ongoing uncertainty created by the political gridlock in Congress are said to be among the factors contributing to buy-back decisions.
Globalization has its good and bad economic aspects. Along with the impact of technology, the downside effects of globalization on Scotland resulted in the loss of many manufacturing and ship building jobs to Asia. This was one of the reasons prompting the Scots to consider separation from the United Kingdom. The majority of voters seemed to realize that independence was not going to be a fix for economic problems. Although the independence option was rejected by the voters, it is a reminder to governments that the downside effects of globalization need to be addressed.
In 2012, there were 14,827 reported cases of murder and manslaughter in the U.S., two-thirds of which were carried out by firearms. The 4.7 homicides per 100,000 people is the lowest rate the U.S. has seen in approximately 50 years. Although declining, the U.S. homicide rate remains higher than in other industrialized countries. In Canada, there were 1.6 murders per 100,000. In Europe, the rate is 1 per 100,000.
The botched ultra-sectarian administration of Iraq’s former Prime Minister, Nuri al-Maliki, set the stage for allowing the fanatics fighting for the Islamic State in Iraq and Syria (ISIS) to sweep out of war ravaged Syria and take over large parts of Iraq. The Obama administration is piecing together a coalition of countries that share the goal of controlling this latest terrorist development. Air strikes and other military action can degrade the fighting capability of ISIS. What is also necessary is finding a political solution that the Kurds, Sunnis and Shias of Iraq and Syria can agree on and make work. Given the regional rivalries and the increasingly deep sectarian divisions in Iraq and Syria, it will be an incredibly difficult task.