Misery loves company

The loss of 150 newsroom jobs is bad, but don't forget the elimination of 7,000 jobs at American Airlines. The NYT reports that 8 percent of the airline’s workforce will be slashed between now and the end of the year, the result of reduced flights that are the result of higher fuel costs. The cuts appear to be twice as big as those announced by any other carrier - so far. Folks, this is shaping up to be one brutal summer and fall. NYT economics columnist David Leonhardt expects the job market to remain weak through the end of the year (employment can fall for months after a downturn has ended). But here's the thing: layoffs have little to do with the economy's problems. Really.

Since 1992, the Labor Department has been tracking something called “gross job losses,” which is the number of positions eliminated at a given office or job site. In 2007, these losses were at nearly their lowest point on record, just above the 2006 level. That’s right — last year, companies eliminated significantly fewer jobs than they did in any year of the fabulous late 1990s boom. Unfortunately, gross job gains — the new jobs created — have fallen more sharply than job losses. Companies have gone on a “hiring strike,” notes Ed McKelvey, a Goldman Sachs economist. Existing firms aren’t expanding much, and not enough new firms are starting. The country is suffering from an innovation deficit.

By the way, the June employment numbers are due out tomorrow - and they're likely to show another month of contraction. Also getting scrutiny will be the separate survey measuring unemployment. You might recall that the May jobless rate jumped 0.5 percent from the previous month, to 5.5 percent, putting many economists into panic mode. Unemployment is not supposed to increase so much so quickly. It's possible that number will be revised downward (jobless data this time of year tends to be funky). State and local employment numbers for June are due out in a couple of weeks.