Commentary Magazine


The Dismal May Employment Figures

Only 69,000 jobs were created in May, the worst number in a year, and far below what economists had been expecting (the consensus forecast was for about 150,000 new jobs). Meanwhile, the unemployment rate ticked up to 8.2 percent from 8.1. That’s the first actual increase in unemployment in 11 months. Stock market futures, already considerably down, plunged further with the news. Gold ticked up, and the ten-year bond fell to a record low of 1.46 percent (i.e., lend the federal government $1,000 and they will pay you a snappy $14.60 in interest per year).

The recovery, mediocre at best, has now appeared to stall, especially with jobs numbers for March and April revised downward (April’s were cut from 115,000 to 77,000, March’s from 154,000 to 143,000.) Europe’s numbers were even more dismal, with euro-zone unemployment now at 11 percent, the worst since the number was first calculated in 1995.

With Europe teetering on the edge of a financial meltdown, the head of the European Central Bank is telling political leaders to do something and do it now:

In a warning to political leaders, Mr. Draghi told members of the European Parliament on Thursday that the central bank is reaching the limits of its powers and now it is up to politicians to move quickly and decisively because the survival of the euro, the Continent’s common currency, is at stake. The structure of the currency union, he said, had become “unsustainable unless further steps are undertaken.”

These numbers are a disaster for the Obama re-election campaign. Indeed, unless they improve and improve soon, and unless European leaders take Lady Macbeth’s advice and screw their courage to the sticking place—not something for which European leaders have been noted of late—a year from now a Romney administration may be talking about the difficulty of dealing with the mess they inherited.