June Jobs Report. More Bad Economic News?
According to CNBC News today, “The U.S. economy created just 80,000 jobs in June and the unemployment rate held steady at 8.2 percent, reflecting continued slow growth in the economy with the presidential election just four months away.” They continued their lede:
“The Bureau of Labor Statistics said private payrolls increased 84,000, while the government lost 4,000 jobs. Economists expected job growth of about 100,000 and the unemployment rate to be unchanged, though many had increased their forecasts based on some recent indicators.
“With yet another month of weak employment growth, the second quarter marks the worst three-month period in two years. The period averaged just 75,000 per month, against 226,000 in the first quarter, which benefited from an unusually mild winter.
“May's weak initial 69,000 report was revised upward to 77,000, which made the June growth essentially the same. The April number was revised lower, from 77,000 to 68,000.
"What a disappointing number," said Jeff Savage, regional chief investment officer for Wells Fargo Private Bank.”
At the American Enterprise Institute's blog, AEIdeas, James Pethokoukis titled his initial post today, "June jobs swoon: America’s labor market depression continues." Pethokoukis continued saying:
"As a research note from RDQ economics put it: “The good news is that employment growth is not slowing further but there is no sign of it picking up either. At this pace, job creation is not fast enough to lower the unemployment rate with the labor force growing at close to 150,000 per month on average.” Shorter: Stagnation Nation (sic)
"This continues to be the longest streak — 41 months — of unemployment of 8% or higher since the Great Depression. And recall that back in 2009, Team Obama predicted that if Congress passed its $800 billion stimulus plan, the unemployment rate would be around 5.6% today.
"Just 75,000 jobs were created, on average, per month in the second quarter vs. 226,000 in the first quarter. And for the year, monthly job creation has averaged just 150,000 vs. 153,000 last year. Both numbers are extremely weak."
As bad as those numbers, Pethokoukis said "those top-line numbers actually overstate the health of the labor market," and made several important points, including:
- "If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7% then vs. 63.8% today—the U-3 unemployment rate would be 10.9%. Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.5%."
- "The broader U-6 unemployment rate, which includes “all persons marginally attached to the labor force, plus total employed part time for economic reasons,” is 14.9%, up a bit from May."
- "It will take 219,000 net new jobs a month for unemployment rate to be below 8% on Election Day if current participation rate holds steady."
Additionally, Pethokoukis noted, "(t)he U.S. work force remains shrunken with just 58.6% employed," and provided the following chart:
Pethokoukis has additional posts about jobs here (explaining why jobs gap may not close until 2030); here (break on jobs that may get President Obama reelected); here (the "7.6% unemployment barrier); and here (focusing on an HPS jobs fact sheet).
At Cato@Liberty, Dan Mitchell writes:
"The crowd in Washington was quite confident that Keynesian spending was going to save the day, even though similar efforts had failed for Hoover and Roosevelt in the 1930s, for Japan in the 1990s, and for Bush in 2008.
"Nonetheless, we were assured that the stimulus was needed to keep unemployment from rising above 8 percent.
"Well, that claim has turned out to be hollow. Not that we needed additional evidence, but the new numbers from the Labor Department re-confirm that the White House prediction was wildly inaccurate. The 8.2 percent unemployment rate is 2.5 percentage points above the administration’s prediction.
In addition, Mitchell includes the following chart:
Additional resources for the June jobs report:
- Breitbart's Big Government: First, John Nolte opines, “If Republicans are looking for a way to compare Barack Obama to Jimmy Carter, look no further than the President's bizarre and dispiriting speech after today's devastating jobs numbers were released.” Nolte then goes on to opine on comments the President made this morning to a small group in Ohio ripping the Clinton era. Finally, Mike Flynn analyzes the June jobs report itself.
- Heritage Foundation. At their blog, The Foundry, Amy Payne provides more context on the "jobs drought." She also has a more in-depth version of the above chart provided by Dan Mitchell. There is also a much more in-depth, 5-page analysis of the June jobs report (Issue Brief #3655, July 6, 2012).
- Canada's Globe and Mail's analysis is here.
- At the New York Times blog, 538 Political Calculus, Nate Silver asks: 1) Will the Federal Reserve act?; 2) Is this a new normal?; and, 3) Is this a political 'game changer'?
- At the Wall Street Journal today, Ben Casselman thinks the "increase of just 80,000 jobs reflects recovery's fragility and steps up pressure on Fed to act."
- Finally, in a Wonkblog at the Washington Post, Dylan Matthews reports on the "jobs report in five charts, including one on alternative unemployment measures, e.g, U3, U6, etc., and the one immediately below on the various employment sectors.