Pethokoukis

July jobs report: America’s labor market depression continues

080312rb1

Only in a world of lowered, New Normal expectations was the July jobs report anything less than another disaster for U.S. workers. Nonfarm payrolls rose 163,000 last month as the unemployment rate rose to 8.3%. In addition, employment for May and June was revised by 6,000 jobs.

– Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.

– Job growth, as measured by nonfarm payrolls, has averaged about 75,000 jobs a month during the Obama recovery for a total of 2.7 million jobs. Context: During the first three years of the Reagan Recovery, job growth averaged 273,000 a month for a total of 9.8 million. If you adjust for the larger U.S. population today, the Reagan Recovery averaged 360,000 jobs a month for a three-year total of 13 million jobs.

– This continues to be the longest stretch of 8% or higher unemployment since the Great Depression, 42 straight months.

– If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.0%.

– Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.6%.

– If the labor force participation rate hadn’t declined since just last month, the unemployment rate would have risen to 8.4%.

– The broader U-6 unemployment rate, which includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons,” ticked up to 15.0%.

– Two years ago, Treasury Secretary Tim Geithner wrote his now-infamous “Welcome to the Recovery” op-ed for the New York Times. During those two years, the economy has added an average of just 137,000 jobs a month.

– Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.

– Good point on the report from IHS Global Insight:

In the household survey, which produces the unemployment rate, both the employment-to-population ratio and the labor force participation rate dropped, not signs of a healthy labor market. The report will alleviate fears that the US might be tipping back into recession. But uncertainties over the strength of global growth, the Eurozone crisis, the fiscal cliff and the November elections are giving plenty of reasons for caution. We expect subdued monthly job creation in the 100,000-150,000 region in the second half of the year

– And Citigroup’s take:

To keep us all guessing, today’s data included a particularly weak reading on employment from the household survey, which showed a 195,000 drop in employment and 150,000 drop in the labor force. The unemployment rate rose to 8.3% from 8.2%. While trend employment gains are not progressing at a particularly robust rate, we would not view a 0.1 percentage point move in a singlemonth reading as particularly significant. Also showing that the underlying trend is not very robust, the work week was unchanged and average hourly earnings rose just 0.1%, suggesting a much smaller gain in real income than reported in June (which also argues for smoothing). Aggregate hours worked rose a modest 0.1%.

50 thoughts on “July jobs report: America’s labor market depression continues

  1. It seems to me, at this point, we can conclude that the stimulus actually had the opposite effect. It actually made the situation worse. Add that to the prospects of O-care and everyone is frozen like a deer in the headlights. No wanting to catch the attention of the feds for fear of being taxed or made the boogeyman. I guarantee, on Nov 7, if O is declared the winner, stocks take a BIG nose dive, if Romney, then they start heading upward.

      • Of course it goes the cronies. But it did so as well under the TARP signed by President Bush in 2008. Both parties are jam-packed with worthless career politicians and are serviced by legions of equally worthless wonks, hacks, and lawyers. However, the only reason they stay in office is that voters continually re-elect them.

        • Mr. Mark. Then we have to choose the least of two evils again if you feel that way.
          Honestly, I don’t. I think Mitt Romney will encourage growth of our jobs markets… I beleive as a proven businessman, Mitt can do it.

  2. The stimulus helped Europe, but failed to help America. Most of the companies who got stimulus moneys took care of their European subsidiaries FIRST. A lot of US companies did “early retirement” on employees rather than keep their long-time workers. A lot of companies “reduced” their workforces by letting go of skilled laborers in favor of unskilled (less pay), or “outsourced” the work overseas.

    I know of a local company who let the ENTIRE IT department go, so the owner could hire a Pakistan company to do their IT work from overseas. And the contractor hires inexperienced people to fix the systems. The money he “saved” with this has cost him 15 percent HIGHER than from keeping the IT people at his company. And we have 12 IT people with Masters and Doctorates who can’t find work locally because of too many IT people looking for work. But since none of them are collecting unemployment, the government doesn’t count them as being unemployed.

  3. If the level of talent observed at certain fast food outlets is indicative of American employees overall then l completely understand why the unemployment rate is so high. Who would want to employ such dunderheads?

  4. America most costly resource is in full display..IGNORANCE.

    If the 48% of the non-tax (Federal) paying population continues to have a say in the policies that this economic “bafoon” believes, especially, that a person that has risked all and built a business, in spite of the “government”, needs to “Pay their Fair Share”, then we will collapse harder and faster than Europe and have complete anarchy in this once “Bright Shining Star”of a land.

    I am one of the highly educated Information Technology professionals mentioned in an earlier post, that is not counted by these “bogus” statistics, yet in my mid-50′s, thought I had an economically viable life ahead of me for some time!

  5. The administration estimated that without stimulus, the unemployment rate would be 6.0%. They claimed stimulus would make it better by 0.4% (to 5.6%) but in fact their corrupt boondoggle of political payoff made unemployment 2.3% worse, to 8.3%.
    The Obama administration incompetence did over 5 times as much damage as the ‘help’ they thought stimulus would do.

    • for an administration hitting low bars in almost every metric, their handling of the economy is perhaps the greatest embarrassment of all. obama has no idea how business works, no idea how economies are mounted and sustained, no idea other than aping the failed neo-socialist rhetoric heard from the likes of paul krugman and other weasels. marry this with obama’s love of cronyism (he is chicago through and through) and you have a puppet state, led by a narcissistic windbag who views himself as jesus christ cometh. In the united states of america, this is beyond belief….

  6. So the U6 numbers are really 15%. The problem with these type of stats is the takers will still not understand that their nation is being raped by this Admin. And in the Battleground states, like numbers are in Pa., Mi., India, Ohio and the MSM continues to prop up Bama . Too bad that the takers do not understand all of this and they have the same voting rights as common sense Americans who do understand just how much this Adm. has strayed from our traditional eco, soc., cult. ideas and our American heritage, history and values.

  7. Last month we saw the nebulous and politicized “seasonal adjustment” turn a 20,000 decrease in employment into an 80,000 increase in jobs. This makes me wonder what shenanigans went into the 163,000 jobs reported today…

  8. Yeah, here’s how bad a day it was for Obama:
    ose 08/03/2012Markets »
    S.&P. 500 1,389.42 +24.42 +1.79%
    Dow 13,096.09 +217.21 +1.69%
    Nasdaq 2,967.90 +58.13 +2.00%

    An intellectually honest person would note two things:
    1 Obama’s statement is from Dec. 2007 & incuded a higher plan than passed and a statement that the plan should be ready by his inaugural. You guys succeeded in delaying it and watering it down. The plan that passed was about $385 billion a year for two years, inclusive of the AMT and Medicare/Doc fixes that were already there, so the real plan, which you call ‘almost a trillion’ was under $330 billion a year.

    2. The economy was, in fact, far worse than thought as of 12/07. GDP was thought to be declining at 6% annual. The actual number was 9.

    This begs the question:
    Is Orenstein the only honest person the AEI has?

    • So, Paul, you agree that the $660 billion stimulus that DID pass failed to perform as the Obama administration economist predicted. But you believe that had $340 billion MORE been passed into law a month or two earlier, the predictions would have been correct?

      Is that a fair representation of what you believe?

      If so, please provide some explanation for why you believe this.

      • Correction: Since the requested stimulus was only $800 billion, not the $1 trillion mentioned in Paul’s comment, the increment NOT provided by the Democratic Congress was only $140 billion, not $340 billion.

      • Since the economic decline was far greater than thought when the Obama group made their calculations, the answer is that a faster and larger stimulus would have done more, but as the true nature of the GOP disaster became known, more would have been needed.

        Since the economic downturn was 50% greater than thought (9% is 50% more than 6%), had there not been a stimulus, unemployment would have easily reached 12%.

        As it was, the stimulus halted unemployment at 10.1% from a base of about 7.6. Reagan started with the same base, and under Saint Ronnie it topped at 10.8%.

        The questions you should ask youself is this:
        Why is Romney using the same economic morons (Hubbard, Mankiw) that Bush did? and
        Why is Romney using the same neocon foreign policy morons that Bush did?

        As Einstein said, insanity is doing the same thing over and over, and expecting a different result.

        • So you are saying their economic projections were wrong so now back tracking would make them more right, his policies have been a total train wreck in every area

          • They used the official data, from the U.S. Government, available as of November and December 2008. Perhaps you can enlighten us as to who was in control at that time.

        • Hey Paul:

          1) Commerce reported recently that the downturn was NOT as bad as first reported.

          2) overall Stimulus between the Feds, Stimulus Bill, Jobs Bills, and increased new budget line spending, is in the $3T area, if not way more. to say we spent only $800 on Stimulus is off.

          3) ten days after Obama came into office, 133.5M had jobs; now only 132.9M have jobs. The Recovery Act (Stimulus) projected that 137.5M will have work by the end of 2010. Now in mid 2012, we are short 4.6M of those numbers.

          4) When Mike Heck-of-a-Job Brwon arrived in NO, the city was in 20 ft water. Two days later it was only in two feet water. It still does not mean he did a good job. No one thought we will be losing 750K jobs/month for ever. The question is how will we look one two three years later. As of now most jobs/income/car sales/house sales and volue figures are worse than 93 of Bush’s 96 months in office.

        • “Since the economic decline was far greater than thought when the Obama group made their calculations, the answer is that a faster and larger stimulus would have done more, but as the true nature of the GOP disaster became known, more would have been needed.”

          Let’s accept that reality. By your claim, your story, Obama was wrong. He botched the stimulus. Obama miscalculated.

          If liberals were wrong, and admit they were wrong, why should we accept that you’re experts? Why should we accept anything you say about the economy, trust it, if your opening premise is “we were wrong”?

        • Yes, insanity is doing the same thing over and over and expecting a different result.

          Like spending a trillion dollars on alleged “shovel-ready” infrastructure jobs and getting nothing for it bu 10% unemployment and then asking for anoethr trillion for infrastructure jobs as a cure for unemployment.

          Obama’s policies FAILED to deliver anything but massive debt. That is simply undeniable.

          We can do what has worked historically. Free markets, not government spending, made thsi the strongest economic powerhouse the world has ever seen. Individual initiative and capital investment is the real engine of economic growth. Historically, reducing the size and bruden fo government has resultined in economic growth and higher tax revenues. It did so in the 1920s, when Mellon championed them, it did so in the 1960s, when Kennedy championed them; it did so in the 1980s under GReagan; it did so after Clinton reduced capital gains taxes in the 90s, and it did so when Bush reduced rates in the 2000s. Every one fo these tax reductions was fiollowed by periods of strong economic growth.

          By contrats, Obama’s policies have historically failed miserably. Roosevelt tried the same thing in the 1930s, and we wallowed for a decade in depression. And Obama’s formula has resulted in 42 months of unemployment above 8% (and closer to 15% when the chronically unemployed are counted).

          Let’s do what works, and cut government spending dramatically and reduce taxes.

      • Kenneth, that’s the beauty of Keynesian economics. NO matter how much govt money is spent, when it fails to stimulate the economy the Keynesians say that not enough was spent. They say that had we spent more it would have worked better. How can you argue with something that deals completely in hypotheticals? It’s the college professors dream, which is why they teach it to students like gospel.

        Sorta like global warming. Any and all weather phenomena can be blamed on global warming in order to claim that global warming is getting worse. Libs love this stuff.

    • Paul
      Seriously, your ‘intellectual’ rationalization of the seriously bad state of our economy is pitiful. Hey, he’s YOUR guy. He said the numbers would be far better than they are if he got what he wanted…which he did.

      How can you possibly justify or excuse the performance of this administration? Are you pulling in a safe salary in some government job, thinking your are impervious to the consequences of the economy?

      Consider this a warning and that I am your oracle…you will come to deeply and truly regret ever voting in this administration.

      God save us from intellectuals like you.

  9. I see the spin at CNN suggesting all Obama needs is another 316,000 jobs created to get even.
    What they fail to recognize is 125,000 people turn 21 every single day in the US.
    168,000 doesnt even come close to treading water.

    • 125,000 turn 21 per day?
      3,750,000 turn 21 per month?
      45,000,000 turn 21 per year?

      By all means, sir, vote Republican to end this morass.

  10. 3 1/2 years of Obama! 8.3% UNEMPLOYMENT! Over $5 trillion in new DEBT! The highest poverty levels since 1965! No matter what you look at it tells you that Obama has been the most Disastrous President since Herbert Hoover and the start of the Great Depression. All that money and NO JOBS, NO infrastructure, just Solyndra and a bunch of payoffs to public employee unions. 3 1/2 years of Obama and UNEMPLOYMENT, DEBT, POVERTY are all at record levels and getting worse. When a President tells you “you’re not that smart” and “you didn’t build that” and takes all credit for the Goverment you know we are in deep deep trouble!!!!

    • Actually, the difference in unemployment now and this time in the Reagan administration (July 1984) is SOLELY attributable to the public employees laid off at state & local levels in the last 2 years.

      In 1983-84, congress spent to support govenmental employment.

      In 2011-12 congress expressly refused Obama’s request to do this.

      Had they done so, Obama’s performance would have topped Saint Ronald’s.

      Which, quite obviously, is why Mr. Cantor-won’t and his buddies wouldn’t go along.

      • goodness…its a great thing when government is employed…if they produced wealth…fact is ever govt workers takes out of the mouth of private sector…

      • Paul- We are 4 million jobs behind, that is not all government down sizing. Also, our debt was measured in Billions and not Trillions back then. Both the Dems and the Repubs have been using the public spending to stimulate the economy button too much and now we much like Europe are hurting from it. This time we can not spend our way out of it. Our best hope is the Shale Oil deposits in Rockies. The possibility of lowering energy costs, becoming a net energy exporter and generating revenue is the best way to turn the economy around. Too bad we have no pipeline and are not allowed to drill

      • Doesn’t anybody remember the fin crisis was a Freddie and Frannie led disaster ( thanks to the CRA) pushed by the independent FED. Under Greenspan ( Andre Mitchels hubby uh NBC) and protected by our/ YOUR DEMS DODD AND FRANK who got bot by Mozello for pennies by lower rate mortgages. Costing us the US. Trillions and mucho pain. Bush tried 17 times to rein in the F twins

      • What Paul and others of his mindset dont seem to understand is or are not willing to admit is that State and local Governments have spent themselves into bankruptcy (can you say Stockton) or near bankruptcy and are now FORCED to lay off Public Sector Employess. They also fail to realize the drag of government spending has on the private sector. Government does not create wealth..it has few if any real profit generating revenue sources to fund itself. I’m not aware of too many products or services Govt creates and sells for a profit. Since the governmet can mainly raise revenue by taxing the private sector/private citizens (tarrifs included) and or BORROW from the private sector, that money is removed from the private sector. This money in turn could have been used by the private sector/citizen to invest back into the private sector..AKA creating jobs…real jobs. Even a stimulus needs to be taxed or borrowed from someone to be given to someone else with the jobs they “create” in a stimulus only being temporary given the nature of the work. At present ..the “concern” of additional and eventual (IE Obamacare Taxes) has caused many in the private sector to hold onto cash reseves in anticipation of the additional “Drag” on the private sector”.
        The point of my rant is, the increased Govenment spending/borrowing over the past 12 years and significantly in the past 3+ years has pulled money from the sector that is responsible for the largest portion of employment in this country. If we stop the maddness of Govenment borrowing and spending and remove the fear of additional taxation, private sector money could be used to actually create LONG TERM employment as it typically does. Even former Public employess could be hired. As an “Investment” (as the Elites love to say), I dont recall a rate of return from taxation nor do I see any significant rate of return in lending to the government that makes it one of the “Highly sought after” opportunities. Yes there are periods of time of unstability that can make it a safe haven or ther can be tax advantages but look at where all that State and Local Govt borrowing has gotten us.

  11. James, don’t allow the left to claim that the drop in the labor force participation rate is mostly due to retiring baby boomers.

    BLS data is available in xls at the link here:
    http://www.bls.gov/emp/ep_table_303.htm

    In 2000, persons 55 years and older who were *not* in the labor force stood at 18.36% of the total U.S. civilian non-institutional population. In 2010, this statistic increased by less than 0.4% to 18.74%.

    In short, more than 2/3 of the drop in labor participation rate from 2000 (67.1%) to 2010 (64.7%) is attributable to the 16-24 yr old group.

  12. Paul,
    All your blow hard excuses do NOT change the fact that Dem’s had a majority in both houses and the white house. O’loser got everything he wanted in those 2 years. So blame all you want but the facts are otherwise. He is the WORST president EVER!

    • Give me a break. Despite your disrespectful name calling of President Obama, he got EVERYTHING he wanted? Absurd. When people use either/or language such as “everything, nothing, never, always, etc” then by definition their argument is full of distortion. And it amazes Paul, that you apparently are the summary historian for all time be declaring President Obama the worst president “ever.” Take some medication and calm down. Your shrill convinces no one.

  13. Paul -52

    Please explain to me what the GOP disaster was? How did the GOP cause the disaster. Please name names and actions and/or lackthereof. Please no platitudes. Was it the GOP that was driving up the cost of real estate. Was it the GOP that had everyday American’s borrowing money on their home that they could not afford to payback. What exactly did they do and if they did something where was the beloved DNC in all of this. And to compare Obama’s economic record w/ Ronnie is simply ludicrous. My any measure we are in an economic mess. Every indicator has us in the tank. Please let me know what the Obama and DNC strategic plan to get this country moving again is. Where and how are they going to create a sound business environment. What are they going to specifically do to make it easier for companies to flourish.

  14. There are two points in this article that, in my opinion, may be playing into Obama’s hands:

    - Not only is the 8.3% unemployment rate way above the 5.6% unemployment rate that Team Obama predicted for July 2012 if Congress passed the $800 billion stimulus plan. It’s way above the 6.0% unemployment rate they predicted if no stimulus was passed.

    If anything, this simply shows that Obama’s team greatly underestimated the severity of the recession. It tells us nothing what the unemployment rate would be if no stimulus were passed.

    Also:
    - During the first three years of the Reagan Recovery, job growth averaged 273,000 a month for a total of 9.8 million.

    Pleaaaase… stop comparing this recovery to Reagan’s – a time when the deficit was much lower, the FED was aggressively fighting inflation, a third of Europe was under communism, China/India/Brazil were not a great factor etc… not to mention that the 1981-1982 recession basically happened because of the FED’s actions… This is not to disparage Reagan – he did a great job but the economic conditions were totally different.

    What we need is a detailed plan on how to fix the economy with an explanation from each candidate as to why he thinks his plan will work. Romney has had a great opportunity to lay out such a plan (since Obama refused to do the same) but he seems to be squandering it.

    • The recession was not caused by excesses in manufacturing and production which is more the norm – it is a busted credit cycle. Historically that has always meant a longer recovery as the painful deleveraging process plays out. Obama certainly has exacerbated the problem from virtually every policy decision he has made, but the comparisons to past recessions are mostly not aligned.

  15. All of this fails to deal with the actual unemployment numbers; specifically, how many people have given up and left the workforce? How many people have given up and managed to make their way to the disability dole? People have given up. The reality is that we have no leadership. We have a president who has not passed a budget since being elected and takes responsibility for nothing; everything is to be blamed on someone else; a president who derides the notion of personal achievement and self sufficiency.

    • Well said, Cyraneau….. While this does fail to deal with the actual unemployment numbers, it’s because these jobs numbers are FRAUDULENT. Even if the books ARE cooked, the reality of President Obama’s failed policies cannot escape millions of REAL PEOPLE.

      Yes, the president (enabled by the complicit media) has failed us with his reckless fiscal policies and his socialistic economic experimentation, even arrogantly blaming others as he constantly avoids taking any responsibility. But, fear not. There’ll be hell to pay, since the reality of his failures is visited upon millions and millions of REAL people in America everyday. We are NOT just statistics. On November 6th, 2012, President Obama will have NO WHERE TO HIDE.

      Looks like his chickens (fil-a) are coming home to roost.

    • It just amazes me that people in the US. Actually support this failure! If he was a surgeon and screwed up your body he’d say it was your diets fault. I saw an Obama “12 bumper sticker in LA on a Prius of course I wanted to scream how can you support this? What can you say to these people to make them change there ” minds”?

  16. We are paying the price for the continued existence of this criminal organization of democrats that fiend for power and tax payer dollars. Democrats have been ripping off the tax payers for decades at every level of Government.

    These creeps belong in prison not positions of power.

  17. Reckon the future of humanity will require USA survival in familiar form, else where to flee from tyranny. Production of”pie hole” sustenance(garden) prudent purchases( deal direct)brought grandparents out of depression,not govt.
    Therefore force of catastrophic nature(heartland drought, lack of sane energy policy) will make for market un-friendly dissolution. Solutions are available,doubters wish for silver bullet solutions,NOT,incremental is logic,NOT,graft and failed subsidies whilst doubters inhabit lobbyist pockets. Numbers,graphs,graphics cute quantify the demise: we still have same drought,deficits,doubt. Cheers Citizens

  18. Help me with the math:

    If I had $5 trillion, how many jobs could I create that paid $100 K per year?

    It seems to me that there simply must be something wrong with the picture we’re being given. Just how do you spend that much money and still manage to so miserably fail to stimulate the economy?

    Where are the 50 million jobs? And, since the money did not go for hiring, where did it go? Just how did the administration manage to waste such a vast sum?

  19. We think that we do not consume enough to generate enough jobs. But perhaps we are looking at this the wrong way.
    Our problem is, our version of capitalism has a very rigid labor system. We measure almost all professional jobs in 40 man/hours/week (with exception of low-paid service jobs). When we consume less, or automate, or outsource, the demand for man-hours drops. We will continue to have this problem, because automation and outsourcing will continue to create a downwards pressure on demand for labor; consumption will vary and is not guaranteed to linearly increase with automation – in fact consumption can even go downwards as a cultural shift, and not due to consumer confidence .
    Therefore, what we need is a more flexible labor system. One that is capable of adjusting the average workweek. We do not need to lower it for everyone across the board. Some people like to work more hours, and some less hours. Many in professional positions would prefer to work fewer hours given a chance, people with children, who are studying and working, or those who prefer to exchange the 40-hour paycheck for more personal time. If these people have the flexibility to work the fewer hours, this will create a substantial number of jobs without depending on increased consumption.
    Surely, we would need to figure out how exactly we can make this work, but that’s a different and more detail discussion.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>