Jobs Report: Worst Second Quarter In Two Years
July 6, 2012 2 Comments
The June jobs report is in, the private sector produced only 80,000 new jobs last month. Unemployment remains at 8.2%. The U-6 unemployment figure, which is more accurate as it includes the unemployed, underemployed and those who have given up, is at 14.9%. That’s up from March and April lows. Black unemployment is up nearly 1 point to 14.4%. The June report means that the second quarter is the worst quarter we’ve had in two years. Job growth over the last three months was 1/3 what it was during the first quarter. In short, the economy has slowed down substantially during the second quarter.
We need between 125,000-150,000 new jobs created each month just to keep up with population growth. We need between 400,000-500,000 jobs created each month to get us back to the level of employment that we had in 2008 before the recession. Producing 80,000 jobs in a month and only 75,000 per month in any given quarter just isn’t going to cut it. When you consider population growth, the second quarter actually saw a loss of jobs. After all, each month saw between 50,000-75,000 less jobs created than necessary to keep up with the size of our population.
As mentioned earlier the black unemployment rate is 14.4%. For young blacks, the unemployment rate is nearly 40%. Keep in mind, these numbers only include people looking for jobs. The number of young blacks who have simply given up looking for a job is likely to make the unemployment rate substantially higher. The unemployment rate for Hispanics is 11%. For young Hispanics, the unemployment rate is over 30%. Keep in mind this doesn’t include the estimated 1.2 million illegals who Obama is granting work permits to. Those people won’t be counted in unemployment statistics but they’ll be taking jobs away from American citizens. In fact, they’re likely to be taking jobs from black and hispanic Americans thus we should probably expect to see increases in the black and hispanic unemployment rates, especially for young people over the next few months.
These numbers are a disaster for the American people. Whether it means we’re back in a recession remains to be seen. But certainly we’re having a major employment problem. Consumer confidence and spending is down, so it’s unlikely that things will pick up over the next few months. The second quarter has been so bad, especially compared to the first quarter, you cannot help but wonder what affect it will have on the Presidential race. Obama’s economic policies are a clear failure. The Obamacare tax is looming, which is likely to only reduce consumer spending and confidence. Economically this administration has failed. Whether Romney can offer something different remains to be seen.
What would the right governmental policy be for the economy right now? We should look to Martin Van Buran and Warren Harding who advocated doing nothing when the economy tanked. Recessions they were President during (or inherited) were over quickly. Compare that with the Great Depression which lasted over a decade thanks to massive government intervention by Hoover and Roosevelt. The current recession has lasted nearly four years with no end in sight. The intervention of Bush and Obama has clearly failed. Changing the strategy of intervention won’t change things but there is one policy Romney can advocate that would actually change the course of the economy. Not only that but it has historic proof that it works. Romney should advocate doing nothing.
UPDATE: According to the Social Security Administration more people left the workforce and went on Disability than got jobs. That’s right, 85,000 new people enrolled in and received Disability compared to 80,000 new jobs. Also of interest, only 4,000 public sector jobs were lost undercutting Obama’s claim that Republican governor’s cutting state governments are responsible for our economic problems.