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America’s Still-Weak Economy

Friday’s job report, which showed that 165,000 jobs were created in April and the unemployment rate dropped to 7.5 percent, was greeted by many news outlets as wonderful news. It’s not clear to me why.

I’ll happily concede that the jobs report indicates that the economy is not in immediate danger of lurching into another recession. And it’s true that the stock market is doing very well, with the Dow having crossed 15,000 for the first time. 

At the same time, we’re now nearly four years after the recession officially ended. Historically, the worse the recession, the better the recovery. But not in the age of Obama. Over the last year we created substantially less than 200,000 jobs a month (173,000). In addition, the number of hours worked in April declined–an indication that we’re seeing a rise in part-time, not full-time, jobs. (This phenomenon may well include the effect of the Affordable Care Act on small businesses.)

Moreover, (a) the civilian workforce participation rate remained at a 34-year low (63.3 percent); (b) last week the U.S. home-ownership rate fell to the lowest in almost 18 years; and (c) growth is anemic. As I mentioned in a previous post, Jeff Cox, a CNBC senior writer, earlier this week wrote, “In terms of actual growth, this is … the worst economy in 83 years. GDP growth is in the midst of its longest sub-3 percent annual growth rate since 1929, the beginning of the Great Depression.”

We are now almost four years after the official end of the recession, and over the last year the economy has grown at less than 2 percent (1.8 percent). In addition, as James Pethokoukis points out, the U.S. lost 8.8 million private sector jobs during the Great Recession. Since the beginning of the jobs recovery, we have gained back 6.8 million, leaving a gap of about 2 million. 

On Friday we received a mediocre jobs report that is indicative of a mediocre economy. What is unfortunate is that this is the best that President Obama can claim after more than four years in office.