Job Market Impact on Consumer Spending

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Aug. 2 (Bloomberg) -- Center for Economic Policy Research Co-Director Dean Baker discusses the jobs report with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

What is behind the headline numbers?

Seeing the unemployment drop is good news.

One could get carried away with the numbers.

They are a bit erratic.

The most important number is the ratio of the population that is employed.

That was unchanged.

That is in act -- in fact slightly up.

It is good to see the unemployment rate dropped.

No bad side to that.

People may have to much importance to it.

The discussion also is how many americans are actually dropping out of the job search entirely at this point?

Exactly.

The ratio is a better measure.

The unemployment rate has fallen.

We are down 2.6% from that percentage points where if we look at the percentage of people who have jobs, that has risen by 0.5%. most of the reason the unemployment rate has fallen over the last three years has been people dropping out of the workforce.

It is hard to be happy about that.

For the most part, it is not people deciding they do not have to work, they are giving up looking for jobs.

Why has the pace been steady but yet so slow?

It is a qualitatively different downturn.

It was cost out of the burst of the housing bubble.

We had never seen that before.

Even a recession back in 1981, it was a bad reaction to slow the action.

They went too far.

They know how to reverse that.

You lower interest rates.

That since the economy shooting all.

That is what we saw.

If you go back to 1983, 1984, it was growing.

We are not seeing that.

The fed cannot lower rates.

It is at zero.

We do not have this demand for housing and cars like we did.

A lot of the job gains were in lowering debt load working sector.

What might that have on consumer spending?

-- were in lower paying work sector?

The july numbers, more than half of the numbers, restaurant and retail were the lowest.

Worker rangers are not growing.

They are not getting good pay.

-- worker will -- worker wages are not growing.

It is hard to support a family.

It is not a healthy pattern of growth.

They do not have the purchasing power.

It is really not the direction you want to see the economy going.

It is nothing wrong with those jobs, you want to see the economy creating a broad range of jobs.

What's you just mentioned automobiles.

U.s. automakers reported their best sales since the recession.

What does that signal about confidence in their personal financial situation?

Cars have been coming back.

That is a good sign.

One of the things that differs today is that so many of our cars are imported.

Even when people buy domestically produce cars, much of the inputs are imported.

It does not create that many jobs.

It is good that people full confident to buy just.

It is not having the same impact and that it did 30 years ago.

So many of the cars they buy is now imported.

This text has been automatically generated. It may not be 100% accurate.

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