Pethokoukis, Economics, U.S. Economy

Let’s face it: The US job market is dead in the water and not getting better

090613jobs

How do you know the August jobs report was pretty bad? When the best thing you can say is that it might have met Wall Street expectations if not for a temporary shutdown in the porn industry last month. (The motion picture and sound recording industry lost 22,000 jobs in August, according to the BLS.) Sure, the White House can argue, as economic adviser Jason Furman did right after the report’s release, that the “incoming economic data broadly suggest that the recovery continues to make progress.”  But consider the following:

1. This was the jobs report that was supposed to reflect an economy kicking into higher gear. Goldman Sachs, for instance, was looking for 200,000 net new jobs. And whisper estimates were even higher. Instead, the economy added just 169,000 jobs vs. the 180,000 consensus forecast.

2. What’s more, June and July were revised down by 74,000 jobs, putting the three-month average at a paltry 148,000.

3. Even at 169,000 jobs a month, it would take an unbelievable 9 years and 10 months to return to pre-Great Recession employment levels, according to Brookings. See you in 2023 — assuming no recessions between now and then.

4. Sure, the unemployment rate fell to 7.3%. But that’s only because the labor force participation rate fell to a 35-year low. If it were still at January 2009 levels, the unemployment rate would be 10.8%. As RDQ Economics cautions, “This continued fall in participation should give pause to those who argue that the decline is cyclical and will be reversed.” In other words, the US faces a permanently larger pool of jobless Americans.

5. The employment rate — the share of the non-incarcerated, non-military working-age population with any job — also fell and remains dead, dead in the water. (See above chart).

One reason for that, notes the Economic Policy Institute is “our 3.8 million “missing workers … workers who have dropped out of, or never entered, the labor force due to weak job opportunities in the Great Recession and its aftermath.” If they were in the labor force looking for work, the unemployment rate would be 9.5% instead of 7.3%.

6. Recall that according to the Obama White House’s 2009 stimulus forecast, August 2013 should have been the 2nd straight month at 5% unemployment:

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7. The median unemployment duration actually increased to 16.4 weeks from 15.7 weeks in July, while the share of the unemployed without work for 27 weeks and longer jumped to 37.9% from 37.0%. There are 3 million more long-term unemployed today — four years after the end of the recession — than before the recession.

8. Worst of all, this jobs report could be a signal that the US economy is not about to accelerate as many are forecasting. IHS Global Insight:

This report confirms our outlook of lackluster economic growth for the second half of the year.  The headline establishment survey number, 169,000 jobs, more or less continues a trend over the past several months, as does the downward tick in the unemployment rate.  …  There are other negative aspects of this report from the household survey.  While this survey is considered to be a less precise measure of employment on a month-to-month basis, total employment fell by 115,000 in contrast to establishment survey gains.

Moreover, the size of the labor force shrank by 312,000 in August, following a smaller decline in July.  Virtually all of this decline can be traced to men; the number of women in the labor force increased in August.  This suggests that much of the decline came from occupations that are male-dominated, such as construction, and that many former workers are becoming discouraged about their job prospects and dropping out of the labor force as a result.

9. Looking at a rolling, 3-month average of job numbers from the more volatile household survey, economist Robert Brusca asks, “Where did the full time jobs go over the last SEVEN MONTHS?”

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Bottom line: Yes, the economy is growing, but not at a rate generating very many jobs, either full-time or part-time. The jobs recovery seems to have stalled. It’s not getting better.

50 thoughts on “Let’s face it: The US job market is dead in the water and not getting better

  1. Surely this isn’t any surprise to anybody. This is what Obama and the democrats have inflicted on our nation after 5 years. An economy kept barely alive by DEBT and trillions in funny money. It going to get worse folks. Plan on it. Thanks Obama! And now he’s making the same disaster to our military and our national security.

  2. Obama is a complete disaster. I used to think Jimmy Carter was the worst President we’ve ever had. But Obama makes Carter look great. If Obama had any sense in his arrogant, thick skull, he’d do us all a favor and resign. He will go down in history as the brown sh*t stain on America’s underwear….

  3. The ‘good news ‘ is that the MSM/AP story now references the U-6 and workforce participation #’s . More and more the reality of the Obama economy is being put in front of the electorate . Whether they see it for what it is and/or connect the dots will be seen first in 2014 and then again in 2016 . One can only hope .

    • Unfortunately the vast number of low information voters only look to the MSM to see who won the Bachelorette or is the next American Idol. They do not pay attention to the reality that is all around them. As long as they can watch crap on reality TV and collect a check they are more than happy!

      • Even sadder we have unemployed and underemployed college grads who voted for Obama at 18 and after being “educated” with no job in sight, voted for him again.

        “The men the American people admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.” ~ H.L. Mencken

  4. How about a red shaded area for the DEPRESSION we’ve been in for the last several years. Anytime the REAL unemployment rate is 20+%, it’s a depression.

  5. Not mentioned is that the vast majority of the 169000 jobs were part-time, the continuing response to ObamaCare. Roughly converted to Full Time Equivalents, the 169000 becomes closer to 90000, or 50% of the consensus estimate. The U6 number should be skyrocketing!

    • I agree, completely. As an IT worker, I’ve gone from full time employment in the late 1990s to contract/temp work that leaves me unemployed for roughly 3 months of the year. In order to make anywhere near what I made in 2000, I have to take sometimes 4 temp jobs a year, and these don’t include benefits of any kind, so the it’s a net loss even when I am working. After the NASDAQ busted in 2001 (followed by 9/11) my “career” has been a joke. 100s of thousands of jobs simply vanished or went to India. I would not agree with you in laying this at the feet of Obamacare, though. My impression is that the last 2 or 3 presidents have all been feckless in this regard.

  6. Well, with 25-30% of our factories gone to other countries, it’s hard to see how we could have a thriving job market.

    Our factories have decamped, taking with them jobs, capital investment, and a prosperous middle class. We are left with a truncated manufacturing segment, debt, and a “service economy,” wherein we all make a living taking in one another’s laundry.

    Our leaders and pundits think it’s fine to produce little, consume much, and borrow the difference. How does that economy look now?

    • It looks just like Larry G’s consequences:

      High taxes, high regulation, high unemployment, and massive labor market friction.

      Awesome, Lartard!

        • Actually, I was wrong – U.6 dropped to 13.7% in August. Huge improvement.

          Larry, we produce plenty, including incentivized poverty, redistribution, and bloated unions and public sector pensions.

          It’s easy to drive factories and “good paying middle class jobs” offshore with things like the highest OECD statutory corporate tax rate. Trouble is, the myth of manufacturing and the so-called middle class is just that, a myth.

          So if you think we can just magically re-import those “good paying middle class manufacturing jobs,” you’re in for a nasty surprise.

    • Gee Larry, why is that? Bush was a knucklehead when it came to globalism – Barry is just as bad, Trump has it right. Attack these cheap labor markets for what they are.

    • Hmm. Germany has no problem having a thriving manufacturing economy. Wonder why. Oh yeah, no tax on anything manufactured and exported from Germany.
      Also, our public schools have decimated classes that boys loved – shop and other classes where boys could work with their hands, which has eliminated our skilled labor force. Overall, liberal policies have slaughtered American business, and even now keep it from bringing back oversees profits due to the demoncrats voracious appetite for taxes.

      Here’s a pretty good article on what could be done. Lower business taxes, slash the regulatory behemoth (which is now becoming militarized as the government marches towards fascism – here’s just the latest on that… http://www.alaskadispatch.com/article/20130905/alaska-governor-calls-investigation-armed-epa-led-task-force)

      http://www.bus.umich.edu/NewsRoom/ArticleDisplay.asp?news_id=23841

      • All you say is true, but another reason Germany thrives is by way of the Euro…at the expense of the far from innocent PIGS. Of course since Germany has largely gotten out of the business of making Germans it won’t matter soon.

  7. what really scares me……if interest rates go to even average rates of last 20 years………our interest on the debt of 20 trillion dollars will be at least 1.2 trillion a year…….every year……….totally unsustainable……a repudiation of all federal debt will be the only realistic solution…….but the takers,not the producers will be the beneficiarys……..

  8. Obama is a Marxist – he believes that it’s OK to steal from Peter to buy Paul’s vote.

    Peter has a good job that pays a lot of taxes.
    Paul is without a job and does not need to work with Obama paying him to remain poor.

    As you see, Obama cares nothing about jobs or the economy…..

  9. But taxes are low for the rich, corporate profits are way up, unions are virtually destroyed, the stock market is way up, the interest rates are so low its like free money, and the rich are richer than ever.

    Obama has been great for the corporations and the rich, and the poor are being punished because they deserve to be punished and poor, so what more could conservatives ask for?

    • What you are seeing is a fascist state. Its the government in bed with huge business, giving them direct breaks (only the ones they find “acceptable”) and smothering small business and manufacturing. Big business just works the regulatory state into their bottom line, outsources jobs, and laughs at small business startups who may try to compete. How can they? The fascist state is in their corner. Sure, they tow the party line. But you’re right – the homes in the Hamptoms are well worth selling out the constitution and supporting a corrupt militarized regulatory state.

      • Bingo…it’s why Buffet loves Obama. His friends in government create barriers for his competition. Warren can afford to hire an army of lawyers, lobbyist and accountants to keep his cost under control. Much of Ayn Rand’s Objectivism was none sense, but her depiction of how itellectuals, activist, politicians and most of all crony capitalist work together was spot on.

    • The poor continued to be ‘punished’ because government continues to believe that the problem is lack of revenue, when in reality the problem is overspending. When the government has a deficit, that is the government’s problem , not the people’s.

  10. The bright side of this report is that the entertainment industry is shedding jobs.
    This is justice given the hype and trash they promote and force upon the populous.
    I hope the media, which promotes and hypes these wack jobs, and their lewd behavior, as role models suffers the same fate.
    Overzealous rampant regulations, with most government agencies now having a SWAT team to enforce these regulations, stifle the American can do spirit.
    Stifle these agencies and watch the economy soar…

  11. They can play with the numbers all they want, but as I travel the States I can see the sad picture of America today and thinking about the great days hurt a little bit!

  12. responders to the story are so quick to blame Obama… BUT the votes in the GOP House tell the real problem…40 irrelevant and ineffective votes to undo PPACA and NOT ONE vote for a jobs program….smacks of the Newt Gingrich “my way or no way” philosophy

    • Google “united states federal government jobs program” and you get 318 million hits. The idea that the problem is a dearth of these programs is ridiculous.

      • Ok, so tell me again exactly why a tax cut and deregulation ( right wing solutions for any and all ailments) are going to work now when they did not work under Bush ?
        At a point in time when the richest among us are the richest they have ever been in the 237 years of our country, why is giving them more money going to improve our job situation?
        You right wingers need a new philosophy… the old one is getting tougher and tougher to swallow…

    • You Obama bootlickers are unreal!

      We are about to complete Obama’s FIFTH year in office. He got virtually his entire economic agenda passed his first 2 years: stimulus, Obamacare, Dodd-Frank, all of it. And the resulting record has been shameful. And all the excuse-making from your corner goes to Republican efforts at styming smaller-bore versions of the same flailing, ineffective, govt “make-work” jobs programs that failed his first two years!

      At what point, in your mind, is any of this Obama’s fault?? What, like every President before him, he has an opposition. And because he hasn’t gotten compete and total dictatorial ability to implement every whim of a “jobs program” he wants, therefore he isn’t responsible for his record?

      Healthy economies are not supposed to NEED endless “jobs programs,” they are supposed to gain traction grow organically. Why wasn’t this necessary for Bill Clinton? He managed a great record with a strong, some would even argue, a rigid Republican opposition. Didn’t stop him from amassing a great economic record. Reagan never held the House, and saw economic initiatives of his quashed regularly. Didn’t prevent him from amassing a stellar record.

      Why is only Obama held to this standard?

      • Just suck it up and admit the endless tax cuts and deregulation policies of the GOP and right wingers is what is responsible for the mess we have now. And the only way out is not “all my way”.. we have to take the best ideas from both sides. A futile fight against PPACA while ignoring bigger problems is stupid.

  13. Then somebody explain why Congress is considering a massive rise in the number of foreign workers we bring in every year? IEEE USA has demonstrated that there is absolutely no shortage of STEM workers in the US. The real reason for bringing them in was leaked by Alan Greenspan back in March of 2007, in the Boston Globe. And why is the 1% allowed to ship factories and business units overseas?

  14. With the radical liberals that Obama has put in position of power in the Washington bureaucracy and the insane over regulation that these socialist fascist’s live to implement, it shouldn’t be any wonder that our economy is struggling. If we would be implementing pure capitalistic policies that make it easier to create or run a business and stimulate reasonable ventures instead of rose-colored schemes like alternative energies, this country’s economy would be in much better shape. I know the liberals will be gnashing their teeth over these comments but we have had 5 years of their economic insanity and on top of a mountain of debt, this is what we got…and it isn’t going to get better.

    • Hey , these same policies worked under Clinton….the last President to deliver a surplus, peace, and a good jobs market as well as a strong stoack market…tell me again the name of the last surplus budget GOP president…I am only 58 yrs old, cannot remember there ever being one

  15. ***
    British P.M. Margaret Thatcher said it pretty well–”Socialism only works until you run out of Other People’s money!”. I think that we are about there now.
    ***
    Brit Winston Churchill said, “The evil of capitalism is unequal distribution of wealth to all people. The benefit of socialism is equal distribution of poverty to all people!”
    ***
    Pretty smart people those Brits. No so much Comrade Obama (PBUH!) and His Ilk’s “fundamental transformation” of the U.S. economy. Refer to Cuba, Venezuela, the old U.S.S.R., or Zimbabwe to see how this works out in the real world.
    ***
    Rocketman
    ***

  16. Wait…….. you mean all those millions of genius Indians we imported over the past 15 years didn’t keep the economy going as promised? Then why is Congress considering a new immigration bill that would flood us with 300,000 more of them?

  17. Infosys senior level meetings : “We will dump 6 million Indians in US and capture their entire IT market and no American will ever come to know about this. We will throw these Americans out of their own country. They don’t know what we are doing over here.”

  18. Yes, if this “comprehensive immigration” bill passes, I think that people will look back on this jobs report as “the good old days,” as unemployment rises and wage stagnation continues courtesy of:
    12+ million illegal immigrants given amnesty (wait till these individuals get citizenship and can sponsor their “relatives” for residency,
    a huge increase in the H-1B visa quotas,
    a huge increase in the legal, low skilled visa and other legal immigrant visa quotas,
    the job killing effects of the ACA as its effect move through the economy, and
    the explosion of robotics and high tech automation that substantially reduce the labor inputs for many businesses (i.e., cheap to buy these robots than to hire new workers) (even TIME magazine has a recent article on this trend), all of which in combination will destroy the American working and middle classes.

    • You seem to be the only one who gets the bigger picture. The way I see it this job market is total bullshit. The days my mother was talking about where you need a degree just to sweep the streets are here. They are purposely screwing us over because foreign labor is cheaper and allows the rich to sit in their money all day. It’s all about control that’s what most people don’t get. The fact that they are slowly saying you will not be able to make your own path and that eventually in order to survive you HAVE to follow THEIR path instead scary. Welcome to the Hunger Games…..

  19. Education is the big “equalizer” we need to get all students thru high school, another 70%thru two years of college/technical training, and the balance thru college. Look, getting thru high school, or two years of technical training is not difficult. Maybe we could save on welfare if we paid a salary for high school students to attend and obtain passing marks.

  20. First lets correct our education system before blaming others and well before our kids smoke meth in our own homes and burn it to the bottom… holes in every pancake and bark at others..

  21. No jobs but the illegals are doing pretty well. Round all those up and there would be so many jobs for Americans. Oh wait, I know many will jump on this and say but the poor poor Hispanic they had it so bad. Truth is some spends thousands to get here and could do it legally. The ones here for 20 – 30 years making families and not paying any taxes. They’ve had plenty of time to try to become documented. Now, Illinois wants to give them drivers license. It’s a joke. You take care of your own before you do others. At this rate, the government turned a blind eye and let it go. It’s our governments fault things are the way it is. They allowed manufacturing jobs to be outsourced. Call centers are outsourced all so that the richer can be greedy and the poor man suffers.

  22. My parents, depression era kids, had three jobs between them their entire working lives. I’ve had 3 jobs in one year. Perhaps the most misleading statistic published by our government is the unemployment rate. If you look at those who have taken multiple part time jobs, spend 3 months a year looking for work, lower wages, and the thousands who have simply given up looking for work, the real rate may be closer to 25%. A chilling statistic? 35% of all Americans are in credit card debt collection. If this isn’t a chilling statistic, I don’t know what is. We have gone from a nation that makes things to a nation that buys things (largely on credit), and that can’t bode well.

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