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 average 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 labor force participation rate hadn’t declined since just last month, 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 Citgroup’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%.
http://www.aei-ideas.org/2012/08/july-jobs-report-americas-labor-market-depression-continues
