Please read this nice post from sudden debt about rotten Friday job report. I’ll just add few comments.

As you know after the crash of Communism a lot of manufacturing jobs in US were outsourced to China and replaced with service jobs. The difference between manufacturing and service sector feels during downturns.

Suppose you have a manufacturer who lost 10% of sales. What he will do? He will just fire 9% of factory workers, as simple as that.

Now suppose you have an auto dealer who lost 10% of sales. Suppose he employs 10 people. Will he fire one them? No, he will switch three of them to work part-time (and cut health insurance to all three). This way he has more flexibility to cover Saturdays and evenings. Sometimes the car manufacturer has a promotion and he will give those 3 guys more hours for a week or two. If he loses another 10% of sales he will switch another three of them into part-time. As you see the payroll statistics will show no lay-offs from this firm.