Commentary Magazine


A Double Dip Recession?

This morning, the Labor Department reported payrolls rose by 117,000 workers in July after a 46,000 increase in June. The jobless rate also dropped from 9.2 percent to 9.1 percent – but that’s because more Americans left the labor force. Some 193,000 people left the labor force last month while the number of unemployed dropped by 156,000. (As a reference point, payrolls need to increase about 125,000 a month to keep the jobless rate steady and about 200,000 a month in order to bring the unemployment rate down a percentage point over a year.) And the so-called underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — decreased to 16.1 percent from 16.2 percent. But here’s the most eye-catching data point of all: The share of the eligible population holding a job declined to 58.1 percent, the lowest since July 1983.

White House chief economist Austan Goolsbee said today’s figures are “encouraging news,” which shows you the degree to which we’re defining encouraging news these days. A more pessimistic, and perhaps a more realistic, appraisal comes to us courtesy of Floyd Norris, chief financial correspondent of the New York Times, who today writes, “Double dip may be back. It has been three decades since the United States suffered a recession that followed on the heels of the previous one. But it could be happening again. The unrelenting negative economic news of the past two weeks has painted a picture of a United States economy that fell further and recovered less than we had thought.”

Heading into an election year, a Democratic president (or his party) doesn’t want to have the New York Times speculating about a double dip recession. But that’s where we are – and by the admission of his own top aides, this economy is one President Obama owns.