Economics, Pethokoukis

The awful, awful August jobs report

RomerBernsteinAugust

This was not the employment report either American workers or the Obama campaign were hoping for. A huge miss. It shows the U.S. labor market remains in a deep depression, generating few jobs and little if no income growth. As IHS Global Insight puts it:

All cylinders are not yet firing … manufacturing has at least temporarily run out of steam, and overall growth in output and employment is likely to remain at only a modest pace. … We expect second-half 2012 GDP growth to average 1.5%, slightly slower than the first half. Slower growth in exports and business capital spending will keep growth subdued.

 

And here is Citigroup’s take:

The unemployment rate dropped to 8.1% from 8.3%, but in this case with declines in both the labor force (-368,000) and the household-survey measure of employment (-119,000). With labor force participation falling back to a new cycle low of 63.5%, the drop in the unemployment rate should not be reported as good news.

Now the depressing details of the jobs report:

– Nonfarm payrolls increased by only 96,000 in August, the Labor Department said, versus expectations of 125,000 jobs or more. The manufacturing sector, much touted by the president in his convention speech, lost 15,000 jobs.

– Since the start of the year, job growth has averaged 139,000 per month vs. an average monthly gain of 153,000 in 2011.

– As the chart at the top shows, the unemployment rate remains far above the rate predicted by Team Obama if Congress passed the stimulus. (This is the Romer-Bernstein chart.)

– While the unemployment rate dropped to 8.1% from 8.3% in July, it was due to a big drop in the labor force participation rate (the share of Americans with a job or looking for one). If fewer Americans hadn’t given up looking for work, the unemployment rate would have risen.

– Reuters notes that the participation rate is now at its lowest level since September 1981.

– If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.2%.

– If the participation rate had just stayed the same as last month, the unemployment rate would be 8.4%.

 

– The Labor Department also said that 41,000 fewer jobs were created in June and July than previously reported. The change in total nonfarm payroll employment for June was revised from 64,000 to 45,000, and the change for July was revised from 163,000 to 141,000.

– The broader U-6 unemployment rate, which includes part-time workers who want full-time work, is at 14.7%.

– The employment-population ratio is perhaps the broadest measure of the health of the labor market. It just shows how many Americans — not in the military or in prison — as a share of the population actually have some sort of a job. That number fell last month to 58.3%, just off its Great Recession lows.

– Each month, The Hamilton Project examines the “jobs gap” — the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month. If we added 96,000 jobs every month, we would not close the jobs gap until after 2025, as this chart shows.

 

– The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in August. The manufacturing workweek declined by 0.2 hour to 40.5 hours, and factory overtime was unchanged at 3.2 hours.

– The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

– In August, average hourly earnings for all employees on private nonfarm payrolls edged down by 1 cent to $23.52. Over the past 12 months, average hourly earnings rose by just 1.7 percent.

– In August, average hourly earnings of private-sector production and nonsupervisory employees edged down by 1 cent to $19.75.

Again, a terribly anemic report that shows a stagnant economy — not one ready to boom.

93 thoughts on “The awful, awful August jobs report

  1. Never in American politics has anymore promised more and did less than Obama. That he is still leading in the battle ground States proves a fool is born every minute, idiots every 30 seconds and stupid is constant!

  2. Well the way to solve unemployment is for Obama to pander to racist Latinos by legalizing millions of illegal aliens so those racist Latinos are satisfied. You have to wonder if illegal aliens were from Sweden or Japan, if Latinos would be out in the street with their Mexican flags and insults to whites and other non Latinos. Should deport all who entered illegally and no citizenship for children of illegal aliens. Or, look at the pseudo-Mexican shithole of Santa Ana, CA to see the pig pen America will become…

  3. We needed a bigger-than-life President – we got a Dope smoking, Coke snorting, Radical Left wing Chicago thug!
    We needed a well-grounded stable President – we got a certifiable narcissist.
    We needed bold leadership – we got a teleprompter
    We needed a seasoned hand – we got a hand in in our pockets
    We needed a champion for American citizens… we got a champion for the invading horde of Illegal Aliens
    We needed a skilled bridge builder – we got a class-warfare specialist and inciter-in-chief.
    We needed practical, proven policies – we got socialist dogma and monumental waste
    We needed an inspirational visionary – we got an ideologically blinded, left learning-impaired radical
    We needed a Constitutional champion – we got a domestic enemy of the Constitution
    We needed a restrained, respected and intimidating warrior – we got groveling, bowing, Barney Fife
    We needed a patriot – we got G. D. America, G. D. America, G. D. America.
    We needed someone to unshackle our economy – we got someone who is a friend to our enemies and an enemy to our businesses
    We needed a president beyond color – we got a green president embracing every whim and myth ever spoken by the kook environmental fringe.

    We needed mature, principled leadership – we got a petulant, lying, whining, blaming, sulking, accursing, excusing, man-child.

    It is a national disgrace that someone this incompetent, racist, and a American hating Socialist could be elected to the office of the Presidency.

    • Excellent! Might I add one Item? We need an original thinker – instead we got a convelouted rip-off of Romneycare and a convoluted version of Romney’s plan to save the auto industry via managed bankruptcy.

    • We just have to pray that our friends & neighbors vote with their heads & not their feelings & worry about what people think by firing a failed president. Eastwood had it right; don’t reward failure get someone who can do the job. Socialism has failed the world over; yet we are expected to believe not enough money has been thrown at our problems and the right people have not tried these lofty ideas. Liberals/socialists/progressives are selfish vote-buying deceivers who laugh at their duped supporters as they carry their bags of money to the bank. Downsize the bloated government beauracracy cut taxes let us produce our own energy and see what Americans unleashed can. Done it before we can do it again. Get the broom and sweep the socialists out!

  4. News flash: we aren’t trying Obama’s jobs agenda….Republicans have blocked all attempts to remedy the situation…get a grip on reality people….

    • Um, you need to get a grip and also brush up on history. Obama had a majority for two years. There was no opposition besides the American people who wanted none of what he was selling but got it anyway a la Obamacare. you can’t blame Republicans forever, and even if you try someone will have to come along, pull you head out of your arse and remind you of the facts.

  5. The month that President Obama took office the nation lost 450,000 jobs and the economy was in full free fall. Now THAT is an awful, awful employment report. This recent report was not great, but by comparison it was a good unemployment report.

      • Good? Seriosly? did you read the article? It basically said we are just as bad off now as we were when he took office. 4 years of treading water and getting nowhere. Keep drinking that blue kool-aid.

    • Technically, in 2009, our recession had stalled and could have begun to climb. This was not due to anything Obama did, but, in fact, to the policies George W. Bush implemented in 2008 at the end of his term.

      Now, let’s stop and think.

      If this was to Obama’s credit, and the bills/stimuli that were passed did stop the recession, then why are we still in our recession? Wouldn’t the same policies have kept us at either a stalemate or a growth?

    • Obama came in at the perfect time. He could blame the recession on his predecessor and given historical recessions he could do anything he wanted that didn’t make things worse and could expect by now to be able to take credit for the recovery that naturally should have happened. What he did was make things so much worse that we’re still scraping along the bottom.

  6. American is a vibrant country if you are rich. The rich is getting richer and the poor only has one asset and that is their vote. Americans you have a beautiful country dispite yourself and your total hate for each other. God is love. You are called on to stop waiting for the Koch brothers to bail you out but you cannot see it because you are consummed in hate. God is love. God helped Mr Obama to win and if God wants him to win a second term there is nothing that the republicans can do because it would not be the republicans against Mr. Obama but the rebupublicans against God. God bless the good people of America who are willing to help her lift up walk again and soar regardless of who is in power and make the rich people poor who would put America in harms way just to defeat Mr Obama.

    • Hey – Don’t you remember??? The Dems took God out of their platform. Nobody can be dumb enough to believe that God helped Obama. Jeremiah Wright, maybe

    • I’ll bet that most of Obama’s supporters are just like you. Reading your paragraph just killed a couple brain cells, so thank you.

      I’m sure God will be glad to help Democrats get America to “walk again and soar” with Obama now that they proclaim God isn’t allowed in their political conventions/discussions.

  7. One item not pointed out in your article, or anywhere I can find in the media, is how the numbers stack up against numbers from just a year ago. When I looked at the data I found the numbers now are actually worse than a year ago. So how can anyone say things are getting better if we are even worse off than a year ago?

  8. The republicans did not want the job of president four years ago when the state of the Union was really bad. They want it now which means things are looking up. Dont fool yourself young man get up off your ass and do something for your country instead of waiting for the Koch brothers and freinds of 32 billionaires who hold the American economy ransom until they get the man they want as president before they hire a few more people. When someone is not helping you in time of need why should you give them your vote the only comodity the average American has. Trickle down economics does not work – if the rich has to trick the people they propose to help. Stop crying that the rich is not helping and make your country strong from the ground up – creat a strong middle class that is loyal to the United States of America. No out sourcing of loyalty and capitalism. Good bless the good people of The United States of America who will lift her to rise and soar regardless of who is in power and to make the rich who hold the economy ransom as poor as they are making the people now who need their help because they hate the president that the people for the people elected.

    • Hmmm – Soros isn’t rich? How many of the 1% already support Obama? Many. Why is it that only republican rich are bad, not the liberal Progressives. We have one here in Maine – Donald Sussman bought his wife’s (US Rep Chellie Pingree) election. That wasn’t enough – he bought the major newspapers in Maine. BTW, he is a hedge fund billionaire. Why isn’t he as bad as Koch?????????

  9. As an educated scientist and successful engineer, I watched as Eastman Kodak used many tools to suck the $9 billion dollars out of America, hide under American bankruptcy law and tell me my pension was gone. Why and how do corporations do this? By the power of the court and with support from our government. While Obama bailed out the banks with a few billion, the Fed, who is not a part of the American Govt, gave the banks over $7 trillion dollars. The result of printing $ is always lower $ value and higher inflation. My point? Our govt has been and still is working for the corporations. If you want to see a happy pig, vote for Mitt! As for me, I’m looking for the Exit.

    • Mitt is a small business champion. He has invested billions to grow small business, not large corporations. He will be the first to tell you jobs and growth are created by small business. 80% of GDP is small business. Romney has an 88% success rate reabilitating troubled small-mid businesses. He will turn the business climate around.

      • Sorry to disagree but Mitt is nothing but a corporate raider. He will only sell out to the banks just like Obama, except Obama at least tries to help the poor and sick while Mitt says their capital gains should pay for their care. I feel your pain as 45% of my check goes to taxes, but I am human and the humane thing to do is to ease suffering. The problem isn’t the elderly and poor, it is banks who get trillions of dollars at 0.01% interest undermining our economy. While bankers steal our pensions and pay the courts to say its OK, America has dropped into disgust in the world view. On the bright side, if we look at history in Washington, we are doing pretty good.

  10. How can people claim there is a recovery when median income has decreased in the years since the end of the recession or the trough? Meanwhile gas prices and food prices have continued to rise. If this stagflation was not enough, GDP is shrinking again.
    This appears to be the only time since the Great Depression where a recession was not followed by a rebound. In otherwords, the surprise is not that some jobs have returned since the end of the recession, but that they are so slow and low quality. In the 1st 2 years. 0bama had a democrat rubber stamp congress passing multiple stimuli and bailouts, and yet we are worse off than we should have been without the bailouts. How is that the repub fault?

  11. Mr.,James Pethokoukis the article on Jobs report is an excellent piece, which had taken you a lot of time compiling these facts! What’s sad about your article is the major networks, will not report or cover your story, with the only exception being the Fox Network. What can we do to get your story out to the voters in the U.S.?

    I cannot fathom any voters in the U.S., who would ignore these astonishing facts, vote for Obama, its shocking to say the least! It is my opinion if Obama is reelected, we have lost this country as we now know it. If you have not been on Fox as of yet, you certainly should be!

    Tell me how we, on the right side can assist you in getting your message out to the general voting public? I look forward to hearing from you

    Sincerely, Ray Smith

  12. Dear Mr. Pethokoukis,

    I don’t understand how you calculated that “unemployment rate if labor participation rate was the same as when Obama took office.”

    The labor participation rate is down from 65.5% to 63.5%, but (65.5/63.5) x 8.1% = 8.36%, not 11.2%.

    There’s no question that Obama and his team of neo-Keynesian bunglers have been an unmitigated disaster, but I don’t think it is true that the unemployment rate would be 11.2% if the labor participation rate hadn’t declined.

    This page…
    http://www.bls.gov/news.release/empsit.a.htm
    …gives the August 2012 civilian labor force as 154,645, the labor participation rate as 63.5%, and the unemployment rate as 8.1%.

    This page…
    http://www.bls.gov/news.release/archives/empsit_01092009.htm
    …gives the December 2008 civilian labor force as 154,447, the labor participation rate as 65.7%, and the unemployment rate as 7.2%.

    This page…
    http://www.bls.gov/news.release/archives/empsit_02062009.htm
    …gives the January 2009 civilian labor force as
    153,716, the labor participation rate as 65.5%, and the unemployment rate as 7.6%.

    • Whoops, my bad. I worked out the numbers correctly (this time), and they’re close to yours: 10.7% rather than 11.2%.

      153,716 k = Jan 2009 labor force, = 65.5% of 234,681 k working-age population
      unemployment of 7.6% = .076 x 153,716 k = 11,682 k

      154,645 k = Aug 2012 labor force, = 63.5% of 243,535 k working-age population
      unemployment of 8.1% = .081 x 154,645 k = 12,526 k

      Now, if labor participation rate were 65.5%, then labor force would be 243,535 k x .655 = 159,324 k
      and unemployment would be (159,234 k – 154,645 k) + 12,526 k = 17,115 k
      and the unemployment rate would be 17,115 / 159,324 = 10.74%

      I’m still curious about the (now small) difference between our numbers.

      Dave

      • Okay, I think that the 65.5% LPR for 1/2009 was a preliminary number. The BLS now says it was 65.7% in January 2009.

        An LPR drop from 65.7% to 63.5% equates to almost 5.4 million people dropping out of the labor force. Add those to the unemployment rate, and it would be 11.2%.

        So Mr. Pethokoukis is right.

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>