America gets laid off, Goldman Sachs employees get a raise

The June jobs report is a serious bummer, but "the good times continue to roll" on Wall Street

By Andrew Leonard
July 2, 2009 7:09PM (UTC)
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Thursday brings us a rare labor market two-fer: Both the non-farm payroll report for the month of June, and the weekly new jobless claims data. An incurable optimist might be able to find some room for encouragement in the jobless claims report -- both new and continuing claims appear to be continuing a downward trend, but you'd have to be Doctor Pangloss to feel anything resembling happy: The Department of Labor reported 614,000 new jobless claims in the week ended June 27. That's still a very big number, and a bad omen, going forward.

As for the non-farm payroll report -- the consensus expectation of economists was that the number would come close to last month's 345,000 jobs lost. The consensus was wrong. The Bureau of Labor Statistics pegged June's job losses at 467,000. By every meaningful measure -- hours worked, temporary employment -- the report is a big disappointment to "green shoots" seekers, as corroborated by an immediate stock market plunge. The number of unemployed people in the U.S. has risen by 7.2 million since December 2007.


And that's not all. Look around the Web and you will you find news reports with headlines suggesting that the ongoing cratering of U.S. car sales is beginning to slow. Not really points out  UC San Diego economist James Hamilton.

Some analysts seemed to take comfort in the fact that the decrease in auto sales from June 08 to June 09 was more modest than the year-over-year decline for earlier months had been. But that's primarily a reflection of the fact that June 08 had been a significant deterioration relative to earlier months of 08.

Americans bought fewer light vehicles in June 09 than they did in May 09, and that holds for every category -- car or light truck, domestic or import. You'll have to look elsewhere for your latest "green shoot" fix.

Continued bad employment numbers will put further pressure on the housing market -- as proven by yesterday's news that homeowners with "prime" mortgages are beginning to fall behind on their monthly payments in increasing numbers.

But there is some good news. If you are employed by a Wall Street bank, your salary is likely getting a big boost.


The Wall Street Journal's Aaron Lucchetti reports:

Business is back on Wall Street. If the good times continue to roll, lofty pay packages may be set for a comeback as well.

Based on analysts' earnings forecasts for 2009, Goldman Sachs Group Inc. is on track to pay out as much as $20 billion this year, or about $700,000 per employee. That would be nearly double the firm's $363,000 average last year, and slightly higher than the $661,000 for the average Goldman employee in fiscal 2007, according to analyst estimates reviewed by The Wall Street Journal.

If the good times continue to roll?

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Goldman Sachs Great Recession How The World Works Unemployment U.s. Economy Wall Street