John Boyd Jr. speaks during an interview in Baskerville, Virginia, the United States, on May 15, 2019. John Boyd Jr., a fourth-generation farmer in the U.S. state of Virginia, has only planted about one fourth of his soybean crop so far this year.(Photo: Xinhua)
Investors are closely watching the US non-farm payrolls report for November that is scheduled to be released on Friday. However, the reading is less significant than before as an indicator of US economic activity, thanks to the prolonged trade war with China.
The US unemployment rate was 3.6 percent in October, and the Labor Department reported that the US economy added 128,000 jobs for the same period.
Some analysts have estimated that November’s non-farm payrolls will rise by 190,000, as the return of about 45,000 striking General Motors workers helped support the number. US President Donald Trump may once again brag about the US economy, with record-low unemployment rates. However, the employment picture in the US is perhaps less rosy than those figures suggest.
The agricultural sector is one of the hardest-hit industries in the trade war with China, but job losses in the sector aren’t reflected by the non-farm payrolls report.
A mix of lower employment and lower incomes is brewing in US agricultural sector. The upcoming non-farm payrolls report isn’t a good window on the impact of the trade war on the employment picture in the US.
More importantly, the non-farm payrolls report cannot reflect changes in the employment structure. The Voice of America (VOA) has reported that jobs for middle-class Americans continue to shrink, though positions at the top and bottom of the pay scale are growing. The US economy indeed keeps adding jobs, but the quality of those jobs is declining. The VOA report said the fastest-growing segment of the job market for non-university-educated workers is in personal care and services occupations. Even if there’s a rapid increase in November’s non-farm payrolls figure, this can hardly be taken as evidence that the economy will gain steam rather than lose its luster.
It’s time to calculate the impact of the trade war on the US jobs market, especially jobs in the manufacturing sector. Economic indicators released recently showed that the US manufacturing sector contracted for four months as of November as the trade war took a toll on US factories. While the manufacturing sector keeps shrinking, there are also fewer US manufacturing jobs than expected.
The trade war and tariffs will do more harm than good in driving job creation in the US. The non-farm payrolls report is always one of the most eagerly awaited economic indicators offering a window to observe the world’s largest economy, but now it is less significant. Amid the trade war, we need a new index to observe the US job markets.