The US economy is undergoing a slow and jobless recovery. Whatever recovery has been achieved so far, it is reportedly driven by strength in manufacturing which in turn was boosted by rebound in global trade and rebuilding of inventories that were cut during recession. But manufacturing has started declining giving rise to doubts about the recovery signs.
The Institute for Supply Management (ISM)'s index of nonmanufacturing activity declined to 53.8, compared with 55.4 in May while numbers over 50 do represent growth
(The Wall Street Journal of July 7, 2010). As we are aware, services nearly account for two-thirds of US Gross Domestic Product. Unfortunately the service side hasn’t fully engaged as lamented by the economist Ethan Harris of Bank of America. Recovery in the Service sector hss slowed down in June compared to May, 2010.ISM report showed that more service firms cut jobs than added them in June in view of the fact that service businesses alone employ more than four of every five private sector workers. In other words they added 91000 jobs in June, 2010 but 20000 of which were at temporary staffing agencies whereas many temps actually work for manufacturers.
The temporary lesson one learns from this development is that manufacturing esp. the small and medium enterpries producing goods do play a direct and definite role in creating jobs.
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