Mediocre July Jobs Report
August 3, 2012 15 Comments
The Department of Labor released its July jobs report, it is at best mediocre. The Department reports 163,000 jobs were created last month, while unemployment increased to 8.3%. The jobs created barely outpace population growth, which adds 125,000-150,000 adults to the jobs market every month. Interestingly the number of people in the work force actually dropped by 150,000 with 195,000 fewer having jobs. The media will try to spin this report as positive for Obama for no other reason than July doubled June in terms of jobs created. But we must remember that April to June was absolutely dreadful for job growth. With that in mind, July really isn’t so great.
In fact looking further at the Labor statistics reveals this j0bs report really isn’t very good. The U-6 figure, which represents people who are unemployed, underemployed or have given up, is 15.2%. The U-6 figure was in the mid 14% range earlier in the year. For various demographic groups, unemployment remains more or less the same. Adult men at 7.7 percent, adult women at 7.5 percent, teenagers at a whopping 23.8 percent, whites at 7.4 percent, blacks at a staggering 14.1 percent, Asians at 6.2% and Hispanics at 10.3%. Interestingly blacks still support Obama at a 90% clip despite having the highest unemployment in the nation. Hispanics which support Obama at around 60% have the second highest.
No doubt the media and Obama will try to spin this report in a positive way. But there’s nothing positive about a report where unemployment is 8.3%, 195,000 people lose jobs and 150,000 people give up and leave the workforce. While Obama and his surrogates are running around demanding decade old tax returns from Mitt Romney, the economy is stagnant. Unemployment is up and job growth barely out paces population growth and doesn’t even begin to replace the jobs lost since 2008. (we need over 400,000 new jobs a month for three years just to get back to the workforce level before the recession)
What is Obama’s plan for his second term? He surely hasn’t offered one, in fact he’s suggested that his plan has worked. Second quarter growth was 1.5%, is that success in his mind? Surely 8.3% unemployment isn’t success nor is a U-6 number of 15.2%. Obama’s policies haven’t worked. They have created a stagnant economy with tax uncertainty, healthcare uncertainty and regulatory uncertainty. He’s spent a fortune on a massive stimulus that didn’t work. What’s he going to do in a second term, offer us a bigger stimulus? Obama doesn’t seem to have a plan, other than telling us how rich and evil Mitt Romney is. At what point does 8.3% unemployment matter to the public more than Bain Capital or Romney’s tax returns?
That isn’t to say that Romney has a great plan for the future. He’s barely offered his yet. Surely he will offer us something at his GOP Convention acceptance speech on August 30th. He needs to offer the country a clear, conservative alternative to Obama’s big government, failed economic policy. Whether Romney has that in him remains to be seen. He can get across to the public that 8.3% unemployment isn’t good enough, he’s very good at telling us what a failure Obama has been. But the public needs to have a reason to vote for Romney. He needs a solid economic plan to contrast with Obama’s.
Expect Obama to continue harping on Bain Capital and tax returns. Expect him to continue to claim his policies worked while ducking any responsibility for a stagnant economy. At this point Obama’s ads, speeches and strategy is tired and predictable. As such Romney has an opening. No amount of media cheering can take away from 8.3%, Obama simply can’t hide from that number. Romney must exploit it to the fullest and to do that it’s time for him to lay out his alternative, positive vision for our economic future. Romney’s time is fast approaching.
About Steven
Do you trust the CBO?
Not particularly. I’m not overly confident in the DOL reports either. It would be a mistake to trust government as though government cannot have a motivation to lie or mislead.
Funny, I seem to remember you really liking the CBO back when it was telling you the cost of Obamacare had doubled (which seems pretty inconsistent with a pro-Obama bias).
Either way, the CBO said it worked. A slick graph of new unemployment applications just happens to peak when the stimulus kicked in. Economists are in large agreement (never perfect, of course) that it worked.
Was it worth it? Time will tell, but it almost certainly kept people at work.
I think any organization that tells you what a program will cost the government over a decade is not worth listening to. The CBO has been consistently wrong in its predictions, as government has generally from the beginning. The government said when medicare was created in 1965 that by 1990 it would only cost $12 billion. In fact in 1990 it cost $107 billion, nearly 9 times as much. The CBO lives in a fantasy land and consistently underestimates the cost of government programs. That the CBO says the stimulus worked is utterly meaningless. The CBO has no basis with which to determine whether government programs have worked or not, that just isn’t their job. They should stick to what they do best: underestimating the cost of government.
Nice punt. You don’t want to believe that the stimulus had an effect so you’ll just dismiss the messenger(s). Handy.
Steve: You forgot to mention that it was the growth in the labor pool that caused the unemployment rate to go from 8.2 to 8.3 percent. I wonder what the U-6 rate would have been without the stimulus. Perhaps 40 percent? Regardless of the spin that you and your irrational far right main stream media folks at Fox, The Wall Street Journal and radio say, the statistics are a home run for the Obama team. Sorry that you didn’t get what you wanted Steve.
ELTV- People like Steve have been shooting messengers on a regular basis. Its the only way that they can maintain their hermetically sealed far right environment.A little reality could be deadly to his right wing fantasy world.
CNBC said 195,000 dropped from the workforce. The Stimulus didn’t do anything to spur private sector job growth, which is why it was a failure.
I want robust growth for our country. There is no reason why we can’t have 6-8% annual growth. There’s no reason why we can’t have 500,000 new jobs created every month or even 600,000. Historically we’ve had growth like that after a recession but we haven’t this time around largely because of Obama’s policies. We should not be content with 8.3% unemployment and a paltry 160,000 jobs created. We shouldn’t be content with the job growth we had in the second quarter, which barely averaged 75,000. In fact, we shouldn’t be content with first quarter job growth of 200,000.
“The Stimulus didn’t do anything to spur private sector job growth…”. You base this on what, exactly? Where is your analysis of stimulus v. no stimulus? Everything I’ve read, including University of Chicago-sponsored surveys of economists, conclude that it had a positive effect relative to what the situation would have been without it. I’d like to read what you have…
http://www.outsidethebeltway.com/study-obama-stimulus-destroyed-million-private-sector-jobs/
Beyond that, the Stimulus wasn’t about creating private sector jobs. It was about propping up state and local governments (who largely spent the money paying down debt) and public sector works projects which as the President acknowledged weren’t as shovel ready as thought.
Without the slightest concern for the glaring short comings of the Conley/Dupor study you site it as rock solid proof of the truth of your ideological nonsense.
Some of the more rational commentators at that web site had very astute comments:
“The study finds a neagitve correlation between job growth in one sector and the difference between stimulus spending and other budget decreases by state, and conclude that the stimulus destroyed jobs… They have no explaination of mechanism. I think they have committed the fallacy of equating correlation with causation. I don’t find it very compelling.”
I”’m glad some of these commenters are actually looking at the study and considering it, as opposed to the idiots who accept this brand new study as either fact or fiction depending on their own particular viewpoint.”
“I agree, and I think that’s the problem here – it’s quite a step to go from “stimulus created jobs in gov’t” to “stimulus destroyed jobs”, so I think my issue is more with the way Doug is framing/interpreting the study than the study itself…”
“i have to say this doesn’t even make sense in the context of the numbers we know. Saved 600K jobs, mostly in government? we know that the public sector has shed 400K jobs. so how does this jive? the market was shedding 600k jobs a month in dec ’08/jan ’09 – then leveled off pretty much in sync with the stimulus. we know that since then we have added 1.7m private sector jobs – so where are the 1 million jobs lost because of the stimulus? again – it doesn’t seem to jive with the context.
my prediction – i suspect this paper will be thouroughly debunked. however, in the meantime, the right wing echo chamber will have shouted it from the treetops so much that it will have become fact to the right-wing…at which point it will have joined the list of other things believed without proof – like tax cuts pay for themselves, iraq had wmd, evolution is a hoax, 100% of peer-reviewed climate change science is faked, etc. etc. etc. etc.”
I’ll ask a simple question to those of you who seem to think Obama has done such a grand job. What do we have to show for the billions of dollars he has spent?
LD ;Why don’t you take a survey of all the pundits on the left and right and see if you can determine if there is anything to show for all of the billions spent? Many people believe that there is. You, however, cannot find a single benefit for all of the money spent? Nothing? Really?
Not a single positive result?
I remember asking a fourteen year-old teenager who I observed smoking, ” Why do you smoke?” His answer, “Why not?” Well of course I could have given him a couple of dozen reasons not to smoke but he obliviously was eager to experience all the bad effects it would have on him. So I answered. ” For you. No reason not to smoke at all.” I am not sure why that story came to me here.
According to the Obama administration if the Stimulus was passed unemployment would be under 6% today. Instead it is 8.3% and private sector growth is 1.5%. If that doesn’t scream failure I don’t know what will to you.
Obama should have know about Europe’s financial mess and the slow down of the Chinese economy, and the Republican takeover of the House and the Republican led roadblock to create a mortgage rescue plan that would have actually ended the foreclosure crisis.Those are just a few of the factors that Obama should have factored into his predictions. Anyone with any brains and an ability to see the world without the ideological blinders of the far right knows that there was no other way to go other than with a bank bailout and a stimulus. What is the far-right plan? Let it all crash and build from the ashes? That would have cost our country far more than the trillions spent to rescue the economy from collapse.
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