In all of its terribleness. The press would be more willing to take the White House to task for paltry and pathetic job growth if a Republican currently lived in 1600 Pennsylvania Avenue.
Is This the Best We Can Do?
The painfully long and slow recovery of the American economy stumbled last month as employers added a disappointing 162,000 jobs, the government reported on Friday, leaving uncertainty about the timing of the Federal Reserve’s plans to begin tapering its extraordinary efforts to revive healthy growth after the financial crisis that hit the world five years ago.
The unemployment rate, which comes from a different survey, gave a more encouraging signal, edging down to 7.4 percent from 7.6 percent in June. But the improvement was only partly a result of more people getting jobs. More people also dropped out of the labor force. The unemployment rate refers only to people who are actively looking for work.
While the jobs report was lackluster, particularly compared to expectations that the economy might add closer to 200,000 jobs, many economists said the latest data was unlikely, on its own, to cause Federal Reserve officials to back away from plans to begin easing its stimulus policies. Ben S. Bernanke, chairman of the Fed, has said that the central bank would start reducing its monthly purchases of Treasuries and mortgage-backed securities “later this year.” Many Wall Street analysts have interpreted that comment as pointing to action as early as the Fed’s meeting in September.
“The payroll numbers were a little disappointing, but the Fed has said it’s more interested in the unemployment rate than the payroll numbers,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He noted that the Fed’s own forecasts put the unemployment rate around 7.2 to 7.3 percent at the end of this year, not far below the July level. Referring to inflation, he said, “If anything, today’s numbers would harden my view if I were a hawk and persuade me to become more hawkish if I were wavering.”
Not everyone agreed with that view, with several analysts suggesting the Fed might wait until December to take its first step. The mixed signals from July’s jobs report will most likely focus even more attention on August’s jobs snapshot, the last before the Fed’s next meeting, scheduled for the middle of September.
“The committee needs to see more data on macroeconomic performance for the second half of 2013 before making a judgment on this matter,” James Bullard, president of the Federal Reserve Bank of St. Louis and one of the members of the Fed committee that sets interest rates who is more dovish on inflation, said in a speech on Friday.
Other indicators also painted a somewhat darker picture of the economy and the job market than was evident from reports earlier this year, with both average hourly wages and the length of the private sector workweek shrinking modestly in July. The job gains reported on Friday were concentrated in retail, food services, financial activities and wholesale trade, according to the Labor Department. Manufacturing gained 6,000 jobs, the first improvement since February, although economists caution that the timing of auto plant shutdowns in the summer can distort the numbers.
Or, to put matters more succinctly:
In Some Blog Posts, I Don't Even Have to Offer Editorial Comments
Link:
In order to ensure Americans understand how to access the benefits available to them when many provisions of the Affordable Care Act go online October 1, the Obama administration announced last month that it is setting up a call center that will be accessible to Americans 24 hours a day.
One branch of that call center will be located in California’s Contra Costa County, where, reportedly, 7,000 people applied for the 204 jobs. According to the Contra Costa Times, however, “about half the jobs are part-time, with no health benefits — a stinging disappointment to workers and local politicians who believed the positions would be full-time.” The county supervisor, Karen Mitchoff, called the hiring process “a comedy of errors” and said she “never dreamed [the jobs] would be part-time.”
Health Care “Reform” and a Revealing Quote
Remember the Obama administration's decision to delay the implementation of the employer mandate section of Obamacare? Sure you do. Now, check out the following quote from Democratic operative Chris Lehane on why the delay is a good idea for the Obama administration and for Democrats:
"You’d have preferred to avoid this. On the other hand, you potentially go into the midterms now in a situation where people are getting savings, and you’re not going to have the potential peril of some small businesses or restaurant owners making people part-time,” Lehane said.
(Emphasis mine.) Yeah, let's not worry about small business or restaurant owners making more and more workers part-time. Let's worry about those calamities after people have voted in 2014, and let's take them off the table for now so that the people don't vote against Democrats next year. That's the important thing.
Note, by the way, that Lehane doesn't even try to deny that as a consequence of health care "reform," we will increasingly see full-time employees moved to part time status in an already weak economy. And other Democrats don't really try to deny it either.
Incentives and Disincentives Matter
I am shocked--shocked!--to find rational economic decisionmaking going on here:
The world’s largest retailer delivered an ultimatum to District lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law.
A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega-retailer’s Arkansas headquarters, walked the halls of the John A. Wilson Building on Tuesday afternoon, delivering the news to D.C. Council members.
The company’s hardball tactics come out of a well-worn playbook that involves successfully using Wal-Mart’s leverage in the form of jobs and low-priced goods to fend off legislation and regulation that could cut into its profits and set precedent in other potential markets. In the Wilson Building, elected officials have found their reliable liberal, pro-union political sentiments in conflict with their desire to bring amenities to underserved neighborhoods.
Mayor Vincent C. Gray (D) called Wal-Mart’s move “immensely discouraging,” indicating that he may consider vetoing the bill while pondering whether to seek reelection.
If you raise the price of a commodity--including labor--you are going to get less of that commodity. Who woulda thunk it?
The Latest Job Numbers Are Bad. Again.
Another story I am late to, but one worth highlighting:
The headline numbers for the May jobs report are about what you would expect for a New Normal economy stuck in 2% growth mode: 175,000 net new jobs last month, the unemployment rate ticking up to 7.6%. No broad signs of acceleration; just the opposite, in fact. As Barclays bank points out, the three-month average increase in nonfarm payrolls through May is now 155,000 vs. a first-quarter average of 207,000. (And at May’s pace of job creation, it would take another 58 months to get back to 5% unemployment.)
In addition, hours worked grew at a 1.9% annualized rate in April and May versus the 3.6% growth seen in the first three months of the year. This downshift reflects a slowing in GDP growth. The bank’s tracking estimate for real GDP growth in the second quarter stands at 1.2%, down from 2.4% in the first quarter.
And what kind of jobs are being created? As economist Dean Baker of the Center for Economic and Policy Research points out, job growth was again narrowly concentrated, with the restaurant sector (38,100 jobs), retail trade (27,700) and temporary employment (25,600) accounting for more than half of the job growth in May. Baker: “These are all low-paying sectors. It is worth noting that the job growth reported in these sectors is more an indication of the weakness of the labor market than the type of jobs being generated by the economy. The economy always creates bad jobs, but in a strong labor market workers don’t take them.”
Indeed, restaurant jobs make up just under a tenth of total US nonfarm jobs, but they accounted for more than a fifth of the jobs created last month.
Another sign of internal labor market weakness: the underemployment rate of 13.8% — which includes part-timers who would prefer full-time work — remains more than six percentage points above the “real’ unemployment rate. Before the Great Recession, that gap was typically less than four points. Indeed, 5.7% of US nonfarm workers are now “part-time for economic reasons” — either their hours were cut back or they can only find part-time gigs — vs. 3.2% precession.
It's all very depressing. Even more depressing: We are likely to see a lot more such reports before the economy starts to pick up some real momentum.