There is little news in this morning’s jobs report from the Bureau of Labor Statistics. There were 175,000 jobs created in May, but the unemployment rate ticked up a notch to 7.6 percent. (The BLS euphemistically called the unemployment rate “essentially unchanged.” I doubt they would have used that phrase had it gone down a notch.)
The number of unemployed, 11.8 million, stayed the same, as did the number of long-term unemployed (over 27 weeks), at 4.4 million. The unemployment rate for teenagers (24.5 percent) and blacks (13.5) remained dismal. The rate for blacks actually went up, from 13.2 percent.
According to the jobs report released this morning, the recovery continues to dawdle along, confirming its status as the worst recovery since the Great Depression.
There were 165,000 jobs created last month, and the unemployment rate dropped another tenth of a percent, to 7.5 percent. That’s down four-tenths of a percent since January. But, again, much of the drop in unemployment has not come about through job growth but through workers dropping out of the labor force. The participation rate, the percentage of the population holding jobs, remained unchanged over last month, at 63.3 percent, but that’s down from 63.6 percent in January. It has been dropping steadily throughout the so-called recovery.
It’s a status quo jobs report this month, with little significant change in the numbers. The good news is the unemployment rate went down by a tick to 7.6 percent from 7.7 percent. The bad news is that the civilian labor force declined as well, by 493,000 people, and the participation rate, the percentage of the adult population in the labor force, declined to 63.1 percent, the lowest number in the 21st century. When President Obama took office, it was 65.7 percent. So the decline in unemployment is almost entirely due to a declining labor force, not a growing job pool. The number of new jobs in March was a mere 88,000, nowhere near enough to reduce unemployment on its own.
What is causing this stagnant job market after so deep a recession? The answer is that the amount of uncertainty in the marketplace is not declining, indeed it is growing, and there is nothing markets hate more than uncertainty. Europe’s deteriorating financial and economic situation is surely not helping, nor is the forthcoming implementation of Obamacare, with a legion of unanswered questions about how it will affect businesses from the Fortune 500 on down. When even two-thirds of Democrats think that Obamacare will either adversely impact them personally or have no effect, there is going to be a strong tendency to wait and see what happens.
The latest jobs report from the Bureau of labor Statistics was released this morning. It has some good news in that the unemployment rate fell two-tenths of a percent to 7.7 percent, and a net of 236,000 jobs were created (there were 246,000 jobs created in the private sector, while government shed 10,000).
Since 236,000 is above the rate of population growth, if it continues–and job growth has averaged 195,000 over the last three months–it would mean a slow, steady improvement. But, ironically, such an improvement might mean a short-term rise in unemployment as more people, encouraged by the number of new jobs, re-enter the labor market. The current unemployment rate is a mere one-tenth of a percent below where it was last September.
Well, another month, another mediocre jobs report. The economy added 157,000 jobs in January while the unemployment rate ticked up a notch to 7.9 percent.
Those who have been unemployed long-term remained at a dismal 4.8 million and were 38.1 percent of all unemployed. There were 8 million people working part-time who would rather be working full-time. That number might well go up in the future as companies adjust their workforces to avoid Obamacare mandates requiring health insurance (or a fine) if there are more than 50 full-time employees.
The unemployment rate fell to 7.7 percent from 7.9 in October, and 146,000 jobs were added to the economy. But the first number is from the Household Survey data and the second from the Establishment Survey data. As usual in this economy, the two surveys tell different stories.
According to the Household Survey, the number of unemployed remained about the same, at 12 million, and long-term unemployed made up 40.1 percent of total unemployed, both dismal numbers. Equally dismal was the number of underemployed, working part-time jobs but wanting full-time work, at 8.2 million.
As John Steele Gordon noted, the unemployment rate ticked up slightly last month, but it’s still just below 8 percent — a psychological barrier that would have certainly hurt Obama days before the election. Still, it’s important to remember where we were supposed to be at this point, at least according to the Obama administration’s 2009 estimates that were used to sell the stimulus package to the public. Jim Pethokoukis writes:
Back in early 2009, White House economists Christina Romer and Jared Bernstein predicted the unemployment rate would be 5.2% in October 2012 if Congress passed the $800 billion stimulus. As the above chart shows, they weren’t even close.
The Sunday talk shows are, not surprisingly, spending a lot of time on the fact that the Bureau of Labor Statistics reported on Friday that the unemployment rate fell to 7.8 percent. The Obama talking heads are calling it “the lowest unemployment rate of the Obama presidency.”
Just for the record, that is not strictly accurate. When Obama was inaugurated on January 20, 2009, the latest unemployment figure that the BLS had reported was 7.2 percent for December 2008. When the January unemployment rate came in a few weeks later, it was 7.6 percent. Only in February did the rate go above 7.8 percent, coming in at 8.1.
A friend who works as a very very high-level consultant writes:
One of the things my shop does is create forecasting models for clients—major firms like [BIG RETAILER] and [BIG FOOD PRODUCER]—you know, people who have to lay out big money on big decisions. We are a consumer of the data produced by the Bureau of Labor Statistics, in the sense that we use it as raw material in models. For example, we use periodic U-1, U-2, etc as predictors of forward sales.
Now imagine me, telling [BIG RETAILER] to load up several millions in extra inventory in anticipation of a sales spike in three weeks because BLS says 873,000 people got jobs last month. They would laugh me out of the room before canceling our contract.
If you think there was skepticism about these numbers in the press, you should’ve heard it at my office this morning. We are treating September numbers as an aberration, as, I am sure, is anyone who has to make an actual decision off them.
If the people who have to predict what consumer spending patterns will be like this month don’t believe the numbers, with tens of millions of dollars in sales on the line, why should the rest of us?
Something seemed awfully funny about the jobs numbers this morning and it seems I’m not the only one by a long shot who thought so. Ace of Spades for one. RDQ Economics for another. Suitably Flip for a third. The Weekly Standard for a fourth, which reported that Labor Secretary Hilda Solis, on CNBC this morning, was asked flat out if the numbers had been cooked. (Needless to say, she vigorously denied it.)
The problem is that the monthly jobs report is two separate, unintegrated reports: the payroll survey and the household survey. The latter is traditionally more volatile. The payroll survey reported the 114,000 more jobs, the household survey said total employment increased by 873,000. Both can’t be right; 873,000 would be the biggest monthly job growth in decades. Indeed, it was last reached in 1983 as the economy was rebounding sharply from the recession of 1981-82 and growing at an awesome 9.3 percent on an annual basis. The economy is growing at 1.3 percent this year.
The confusing but mildly promising jobs report today—stats say an anemic 114,000 jobs were created, but the “household survey” says 873,000 more people found work this month than last—has inspired a back-and-forth frenzy since its announcement at 8:30 this morning. The political question it raises is how much good it will do Barack Obama, reeling from his awful debate performance on Wednesday night.
Two answers suggest themselves. First, it can’t hurt, but it probably won’t help; a really bad jobs report in September did little harm, so there’s scant reason to believe an OK one will turn around his suddenly declining fortunes. Second, the political problem for the president is not the tragedy of life for the unemployed, though it is the most painful fact about the lingering economic malaise. The political problem is the condition of the employed.
It is telling that our expectations are so low these days that the latest dismal jobs report issued by the U.S. Labor Department is being viewed with some relief. It noted that the economy had added 114,000 jobs in September. That is, we are told, not so bad because that is around the figure most economists projected, even though it is below the total that is generally considered the number needed to account for normal population growth. The drop in the unemployment rate to the lowest point in the Obama presidency should not deceive us, because it is clear that many people have simply given up looking for work during what is the worst economic recovery since the Great Depression. Though President Obama may choose to highlight the 24th straight month with job growth since the end of the recession he inherited from his predecessor, with 12.1 million Americans still unemployed, a drop in the number of manufacturing jobs and temporary employment, we may be closer to the next Great Recession than to genuine recovery.
This is hardly the sort of situation that would normally bode well for the re-election of any incumbent president. Yet since President Obama’s poll numbers went up rather than down after an even worse report last month, it would be foolish to assume these discoursing numbers will hurt him. Earlier this week, I referred to Obama as the real Teflon president, since neither the recent revelation about his past use of racial incitement nor the security screw up in Libya (and the subsequent lies about it from the White House) or even a bad economy seemed to be enough to dent his standing in the polls. Yet all it takes to burst a balloon is one sharp jab. After the president’s awful performance in the debate with Mitt Romney on Wednesday, it could be that Americans will start to view the president’s litany of disasters with less equanimity than before.
The Romney campaign made public a memo from their pollster intended to buck up the spirits of activists discouraged by the release of polls over the weekend that show President Obama emerging from his convention with a bounce in his ratings. Neil Newhouse, the campaign’s pollster tells them to “not get too worked up” about the latest numbers and dismisses the reaction to the conventions as a “sugar high” that changed nothing. He may be right about the bounce, as it is more than likely that the few points gained by the Democrats in the past few days will soon evaporate and that we will be looking at a statistical tossup within the week, if not sooner. But any Republican lulled by Newhouse’s “State of the Race” into thinking that everything’s still coming up roses for Romney may be in for a rude awakening in two months. The Obama bounce is an unexpected blow to the Romney campaign that makes it clear the challenger has an uphill slog until November.
Romney entered the conventions trailing the president, and even if the Obama bounce dissipates quickly, he will likely remain behind. Failing to gain ground over the last two weeks is troubling. But even more troubling is the fact that the president managed to pad his small lead even after the release of another terrible jobs report on Friday. Those numbers added considerable weight to Romney’s arguments that the president had run the economy into the ditch from which he cannot extract it. But if more Americans are swayed by a week of liberal rhetoric and the oratory of Bill Clinton to stick with the Democrats than are influenced by the collapse of the jobs market, then exactly how is Romney going to get to 50 percent plus one in 58 days?
The White House spins today’s grim August jobs report (which John Steele Gordon details below), calling it “further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression”:
While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007. To create more jobs in particularly hard-hit sectors, President Obama continues to support the elements of the American Jobs Act that have not yet passed, including further investment in infrastructure to rebuild our Nation’s ports, roads and highways, and assistance to State and local governments to prevent layoffs and to enable them to rehire hundreds of thousands of teachers and first responders. To build on the progress of the last few years, President Obama has also proposed an extension of middle class tax cuts that would prevent the typical middle class family from facing a $2,200 tax increase next year.
There’s something for everyone in this morning’s jobs report.
Democrats will point to the reported 163,000 new jobs last month, double June’s dismal 80,000 (which was revised downward today to an even more dismal 64,000). For the first time in quite awhile this was above economists’ estimates (they were predicting 95,000 new nonfarm jobs).
Republicans will point to the fact that the unemployment rate ticked up to 8.3 percent from 8.2. That’s the worst since February. The unemployment rate has been above 8 percent for 41 straight months now. The broader measure of unemployment, which includes part timers who would rather be working full time, also increased from 14.9 percent to 15 percent, a really bad number.
With a sinking economy and few accomplishments to his credit, President Obama has been doing the only thing an incumbent in his position can do: trash his opponent. Democratic attacks on Mitt Romney’s business record have taken a toll on the Republican candidate, but the assault on his record as an investor can only go so far. The president’s base may buy into the claims that Romney’s wealth was gained only by outsourcing American jobs abroad, but most are not that gullible. The line between throwing mud at Romney and trashing capitalism is very thin. If the president is going to go to the polls as the champion of propping up doomed businesses with bailouts as opposed to creating wealth and jobs by promoting those that can succeed, Romney will win. However, Romney’s problem is not so much his record at Bain Capital as it is the idea that he is an out of touch rich guy. And that, rather than Bain, is the real Democrat target, as today’s front page story in the Sunday New York Times rightly points out.
Seen in that light, Democratic strategists had to be pleased this week when photos of a shirt-sleeved President Obama on his working class bus tour of Ohio were contrasted with pictures of Romney jet-skiing on a New Hampshire lake while on a July 4th vacation with his family. Republicans who remember the points they scored when photographers caught John Kerry windsurfing during the 2004 campaign probably winced when they saw Romney cavorting on the water. But it remains to be seen whether Barack Obama–the candidate of Hollywood elites and who recently was hosted at a gala fundraiser in New York by Sarah Jessica Parker where his candidacy was touted by Vogue editor Anna Wintour–can convince wavering independent voters he is the champion of the working class. The question for the country is not so much who’s the rich guy in the race as who is the one who is out of touch with the country’s economic dilemma. While Romney’s weakness has always been his inability to connect with ordinary voters, Obama’s is that he is the guy in charge of an economy where employment is shrinking rather than growing.
President Obama’s response to the latest dismal federal jobs report was as predictable as it was weak. Speaking on his bus tour of Ohio, he repeated the theme we’ve heard so often since January 2009: It’s not his fault. Only this time he not only heaped blame on the administration of his predecessor but also claimed the problems dated to the Clinton administration, which heretofore Democrats have spoken of as a golden age of prosperity:
“We’ve got to deal with what’s been happening over the last decade, the last 15 years.”
It’s not clear what event it was that happened in 1997 — when his secretary of state was serving as First Lady and President Obama had just begun his first term in the Illinois State Senate — whose impact was so far-reaching that even today the administration is helpless to ameliorate its effects. But whatever it was that the president had in mind when he threw out this puzzling alibi, blaming Bill Clinton is about as pointless as pointing the finger at George W. Bush, Obama’s usual punching bag. But the way things are going for the president, one more bad jobs report and he may be blaming the elder President Bush as well his son and Clinton for all of his troubles.
As even a liberal stalwart like Robert Reich pointed out today at the Huffington Post, the excuse that he inherited the worst economy since the Great Depression is “wearing thin.” In fact, it has already worn out, a fact made all too clear by the president’s obfuscations about the jobs numbers that Reich was honest enough to report.
Another month, another lousy jobs report. The June report out this morning is no worse than the May report that was considered a disaster for the Obama re-election effort, but it’s no better either. Unemployment stayed the same at 8.2 percent, but the broader measure that includes part-time workers who would prefer full-time work ticked up a notch from 14.8 percent to 14.9. While the economy created an average of 226,000 jobs a month in the first quarter, it created only 75,000 a month in the second.
Just how dismal has been the recovery that began way back in June 2009, in the Obama administration’s earliest days, is graphically (quite literally) demonstrated in an interactive chart from the Federal Reserve Bank of Minneapolis. George W. Bush owns the recession (fairly or unfairly), but the Obama administration owns this dismal recovery lock, stock, and barrel.
The unemployment numbers in May were bad, but June showed no improvement, according to the jobs report released this morning. Just 80,000 jobs were added last month (economists expected 95,000 on the lower end of estimates), keeping the unemployment rate unchanged, via BLS.gov:
Nonfarm payroll employment continued to edge up in June (+80,000), and the unemployment rate was unchanged at 8.2 percent, the U.S. Bureau of Labor Statistics reported today. Professional and business services added jobs, and employment in other major industries changed little over the month.
The number of unemployed persons (12.7 million) was essentially unchanged in June, and the unemployment rate held at 8.2 percent. (See table A-1.)
For some liberal political strategists, the focus on the monthly federal jobs report that will come out later this morning is much ado about not all that very much. The unemployment and job creation numbers are, they say, just statistics that don’t necessarily tell us all that much about the economy and perhaps even less about the sentiment of voters. To which the sensible observer can only respond: Like hell, they don’t.
The question about why we’re all so obsessed with economic statistics this summer was the conceit of a New York Times feature that served to preview the latest jobs report due out on the first Friday of every month. According to many of those quoted by the paper, the problem with the jobs numbers obsession is they aren’t a true measure of the worthiness of President Obama’s economic program. Their fear is that the latest report as well as those that preceded it and those that will follow in the coming months may merely reflect a caprice of fortune in which a few ill-timed economic statistics can ruin the chances of an otherwise praiseworthy president to gain re-election. The experts consulted seem divided between those who think the predictive power of these stats is overrated and those who think they do mean a lot but aren’t necessarily fair to the president.