July jobs report – job creation leveling off

Posted by AzBlueMeanie:

GOP austerity economics and their self-destructive sequestration policy are a drag on economic recovery and job growth, as any credible economist could have predicted. “Sequestration — and its unrealistic and ill-conceived discretionary
cuts — must be brought to an end,”
said Hal Rogers, the Republican chair
of the House Appropriations Committee on Wednesday. GDP grew at only 1.7 percent in the second quarter, which we are told was better than expected. U.S.
Growth Beats Forecasts Despite Federal Cuts
. I'm sorry, this is lowering expectations: this GDP number is not nearly enough to create job growth. GOP economic policies are sabotaging the economy.

There were projections by private sector economists earlier this week that the job market was improving. Which
makes today's underwhelming report from the Bureau of Labor Statistics
that much more disappointing. Steve Benen breaks ot down in U.S. economy created 162k jobs in July, unemployment rate dips:

The U.S. economy added 162,000 jobs in July,
below expectations. In a rare sight, public-sector layoffs were not a
drag on the overall totals — the private sector added 161,000 jobs,
while the public sector added 1,000 jobs. (In recent years, the public
sector ordinarily sheds several thousand jobs per month). The overall
unemployment rate dropped to 7.4%, but largely because of people leaving
the workforce.

Even more discouraging were the revisions from the
previous two months — May's totals were revised down from 195,000 to
176,000, while June's totals were revised down from 195,000 to 188,000.
Combined, that's 26,000 jobs we thought were created, but weren't.

JulyJobs

Looking at the report in the larger context, what we see over the last year or
so is a job market that's effectively just staying the same — it's not
getting better, but it's not getting worse. We're steadily adding jobs
every month at rates above population growth, but we're seeing neither a
hiring boom nor a deteriorating employment landscape. It's just …
leveled off.

If our political process were sane, lawmakers would
be looking for ways to give the job market a boost in order to
strengthen a larger economic recovery. Alas, that's not going to happen
Republican leaders remain committed to sequestration cuts that are
holding back job creation on purpose, and are focused primarily on spending bills that punish those already struggling
.

All told, so far in calendar year 2013, the economy has added 1.34 jobs overall, and 1.37 million in the private sector.

Here's another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

JulyJobs

Ezra Klein is even more pessimistic in his assessment. A
terrifying recession graph
:

The core issue here is that the unemployment rate only counts people
actively looking for work. That means there are two ways to leave the
ranks of the unemployed. One way — the good way — is to get a job. The
other way is to stop looking for work, either because you’ve retired, or
become discouraged, or begun working off the books.

From the Center on Budget and Policy Priorities:

Unemployment-vs-share

The yellow line on the left shows the official unemployment rate since 2008. It’s fallen from over 10 percent to under 8 percent. But the red line on the right shows the actual employment rate — that is, the percentage of working-age adults with jobs. What should scare you is that the red line has barely budged.

At the beginning of 2007, the employment rate was 63.3 percent, and the
unemployment rate was 4.7 percent. By the end of 2009 — so, after the
worst of the recession — it had fallen to 58.3 percent, and unemployment
was up to 9.9 percent. Today, it’s 58.7 percent, even though
unemployment has fallen to 7.6 percent. That means a lot of the people
who’ve left the rolls of the unemployed haven’t gotten a new job.
They’ve just left the labor force altogether.

Some of that’s natural. The population is aging, and the labor force was
expected to shrink. But it wasn’t expected to shrink this much. The
economy is a lot worse than a glance at the unemployment rate suggests.
And instead of doing anything to help those people get back to work,
Washington canceled the payroll tax cut, permitted sequestration to go
into effect, and is now arguing about whether to shut down the federal
government — and possibly breach the debt ceiling
— in the fall.

Ezra Klein adds in hs post today, The toughest jobs question:

If labor-force participation had held at its pre-recession peak, unemployment would be around 9.7 percent today.

The implication of these numbers is that the recovery is a mirage.
The official unemployment rate only counts people actively looking for
work. It’s dropped less because people have found work than because
they’ve stopped looking. Ergo, there’s been no recovery — just a
hardening of the post-recession labor market.

* * *

The rate of labor force exit is actually lower than it was in the
aftermath of the 2001 recession. It’s labor force entry that’s suffered.

In particular, it’s suffered among women — and it’s really suffered among young women – who are a lot less likely to enter the labor force than they were in 2002 and 2003.

* * *

But that comforting possibility surely doesn’t explain all of the
drop in entry we’re seeing among younger people. And it doesn’t really
explain any of the drop in entry we’re seeing among older people.

There’s been a recovery. The growth numbers, and the payroll numbers,
and the consumer confidence numbers, are all enough to tell us that.
But not as much of a labor-market recovery as the unemployment rate
indicates
. A lot of people have been left behind, or perhaps more
accurately, been discouraged from starting at all.

As long as Tea-Publicans hold the country hostage to their disproved and discredited austerity economics policies that they have made into a false religion, economic recovery and job growth will remain elusive. We need to get back to basic "Econ 101" and do what we know actually works. Conservative economic theory needs to be buried on the ash heap of history.

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