The job numbers remain grim:
Showing the labor market’s considerable strain, the number of people collecting state unemployment benefits reached yet another new record, jumping 122,000 to a seasonally adjusted 5.56 million, the Labor Department reported Thursday.
The four-week average of these claims rose 123,750 to stand at 5.33 million — in itself a record high since the U.S. began compiling these statistics — also as of the week ended March 14.
And for the week ended March 21, first-time claims for benefits rose 8,000 to 652,000, a level that’s fully 78% higher than the same period in the prior year. The four-week average of these initial claims fell 1,000 to 649,000.
The claims report shows that businesses are laying off workers at a rapid pace and that finding replacement employment for those people out of work is ever harder. Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
Consumer spending has led to economic recovery in the past, but so long as jobs continue bleeding out people will likely not be spending much. And however generous the government housing bailouts may be, unemployed people generally can’t make their mortgage payments.
It is peculiar in the extreme that the Obama team has focused so little on jobs and job creation. Yes, they have an ever-shifting made-up number of jobs to be “saved” by the stimulus, but with so much spending allocated beyond the first eighteen months, we aren’t getting much bang for our billions.
Moreover, the president rejected ideas that might have halted job losses immediately – e.g., a payroll tax cut. (On the contrary, Democrats have been pushing items like card check that scare off jobs.)
All of this has budgetary ramifications (i.e., higher unemployment means great expenditures and reduced revenues) and political ones. The president can concoct whatever silly estimate he wants about “creating or saving” jobs, but if unemployment hits double digits Americans are going to conclude that his stimulus is a failure. Pity the poor incumbents in state and federal races, either in 2009 or 2010, who have to defend a record of rising unemployment.
And then, of course, there is the populism problem. The public-private toxic asset-plan will make some hedge-fund managers extremely wealthy. Try explaining that to someone who’s been unemployed for a year.
Perhaps if the president had incorporated some of his critics’ ideas, the prospects of job creation might be less bleak today. At the very least, he would have some cover. Now he and the Democrats own the jobs outlook. They better hope it brightens.