Job growth accelerated but quality of job degraded further - sign of increasing stagnation with deflation in early stages
Peter Oberois
Jun. 2, 2007

Wall Street read it wrong. The Job Growth in May accelerated. Payrolls increased last month by 157,000, more than economists predicted. After a gain of 80,000 in April, the Labor Department said today in Washington. The jobless rate stayed at 4.5 percent. The Commerce Department reported that personal spending rose 0.5 percent in April and the gauge of inflation most closely watched by the Federal Reserve rose 0.1 percent.

However a closer loom at the whole scenario shows the number of job growth was primarily in burger flipping low wage jobs. The cheap labor scenario strengthened while the standard of living declined. It is a clear sign of increasing stagnation with deflation in early stages similar to Japanese economy in 1988. Japan suffered a severe stagnation and deflation for the last twenty years.

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