THE US economy has seen 7.6 million jobs destroyed since the US and worldwide slump began, and then deepened, after the crash of the major US banks, especially Lehman Brothers in September 2008.
One year after that collapse, the US economy lost 263,000 jobs in September 2009, far more than had been expected, according to the official non-farm payrolls figures.
The US jobless rate for non-farm industries has now risen to a 26-year high of 9.8 per cent in September, compared to the August figure of 9.7 per cent. The number of non-farm workers in employment has now fallen for 21 consecutive months.
The US trade unions are insisting that even a fraction of a per centage point increase in GDP, which the US administration is expecting, will mean nothing, as the jobs crisis is continuing to go from bad to worse, sinking millions of workers, and their families, into poverty.
Since the start of the slump in December 2007, the number of people out of work in the US, not counting the farm sector, has risen by 7.6 million to 15.1 million.
The US is not alone in seeing rising unemployment. The 16 nations that use the euro announced on Thursday that their seasonally adjusted rate rose to 9.6 per cent in August, putting the number of people without a job at 15.2 million, virtually the same number as the USA. In Japan, the number of workers unemployed has hit a six-year high of 3.61 million.
The effect of growing unemployment, and September’s further decline in output, has seen Wall Street shares plunge below the 10,000 points level. When Friday’s Wall Street session finished, the market had fallen to 9487 points!
However, the US Commerce Department reported last Thursday that consumer spending rose 1.3 per cent in August, the largest rally in nearly eight years. Analysts dismissed this ‘rebound’, stating that rising unemployment and tighter credit conditions will quickly curb any upward spending trend.
Falling auto sales reports on Thursday added to capitalist concerns about a ‘sustainable recovery’. Major automakers posted big drops in September sales following the government’s Cash for Clunkers incentive programme.
General Motors Co. and Chrysler Group LLC reported the biggest slowdowns during the month. GM’s sales plunged 45 per cent to 155,679 vehicles in September, compared with a year earlier. Chrysler sold only 62,197 vehicles last month, down 42 per cent.
Ford Motor Co. had the smallest decline among major manufacturers, falling 5.1 per cent to 114,241. Japan’s Toyota Motor Corp. said sales fell 13 per cent while Nissan Motor Co. said its sales fell 7 per cent. Honda’s sales fell 23.3 per cent to 77,229.
The effect of this crisis on the UK was to see the FTSE 100 index tumble below 5000 points as the city feared that the reported ‘recovery’ was over. As soon as the US unemployment figures were published the City of London’s trading screens turned red.
Philip Shaw, economist at Investec Securities in London, remarked: ‘The extent of job shedding in the US has been staggering in the past year.’ The FTSE index finished at 4,998.7 on Friday, a loss of a 93.5 points over the week.
Meanwhile, the International Monetary Fund (IMF) has stated that the UK’s NHS and pensions systems will have to be completely ‘reformed’ ie obliterated, since next year Britain’s debt will have reach 81.7 per cent of GDP, while it predicted that, even taking into account the government’s plans for cuts, the debt will rise to 98.3 per cent of GDP by 2014.
The message from the US, the EU and the UK is that the crisis of capitalism is deepening, and can only be resolved by the victory of the world socialist revolution, replacing bankrupt, out of date capitalism with socialism on a world scale.