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The jobs report for July was slightly above expectations, with the economy adding 117,000 jobs and the topline unemployment rate reducing to 9.1%. May and June, which were particularly bad months for jobs, were also revised higher. But this is not the kind of number which would accompany a massive reduction in the jobless rate. The rule of thumb is that the country must add anywhere between 100,000 and 125,000 jobs a month just to keep up with population growth and additional people entering the job market. And more job growth would be needed to actually cut into unemployment.
The economy added 53,000 in May, up from an earlier estimate of 25,000, and 46,000 in June, up from 18,000. June’s total was still the weakest in nine months.
Hiring in July was broad-based. Manufacturers added 24,000 jobs in July, as auto companies laid off fewer workers in July than usual. Retailers hired a net total of 26,000 employees. Employment in health care grew 31,000. Hotels and restaurants added 17,000.
And once again, we see the fiscal drag from cuts to state, local and federal governments. Private hiring was once again OK, with a gain of 154,000. But governments cut 37,000 in July. Anti-stimulus continues to hurt the economy at all levels of government.
Since the recession technically ended in June 2009, the topline unemployment rate has been stuck above 9% every month but two. Now is not a time for complacency. But the debt limit deal makes it difficult to maneuver in an age of austerity, especially with expiring stimulus measures like the payroll tax cut and extended unemployment insurance. Even if by some miracle those are extended, you would basically be extending current law, and obtaining average jobs reports like this. We need a bigger boost. And that’s not likely to be around the corner.
More from the Wall Street Journal. I cannot seem to access the Bureau of Labor Statistics report this morning.
…Key stat:
The jobs report Friday showed 44.4% of unemployed Americans, or 6.2 million people, were out of work for more than six months in July. The longer someone is without a job, the harder it is to find work.
All of those people would lose their extended unemployment benefits by December without an extension.
…One thing I just learned: the employment/population ratio is at its lowest level (58.1%) since 1983. That’s a crucial number, perhaps more important than the topline unemployment rate.
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Good Morning David. Have you seen this Time/CNN Opinion piece? http://curiouscapitalist.blogs.time.com/2011/08/04/why-wall-street-hates-the-debt-deal/
It seems our poor economic performance has something to do with distributional disparity of income in economic cohorts. In other words, only the wealthy have any money and now there is a huge slack in demand. Ya think? You’ve been saying this for quite sometime. And, get this, according to this opine, it’s not governmental debt (how many times were we told by the Geithner WH that public debt was “crowding out all other economic activity” – which is complete bullshit since the corps are sitting on tons of cash) but the FINANCIAL SECTOR CROWDING OUT THE REST OF THE ECONOMY. That’s right. As stated here by you and numerous Pups, It’s 0′s and G’s WH Wall Street benefactors that are crowding out the rest of the economy, creating huge dislocations and killing off demand. Maybe Timmah and Barry need to learn the difference between political economy, economics, fiscal policy, and financial policy. Maybe Dodd-Frank is a POS just like 0′s financial committee says it is and maybe, just maybe, the American public needs to understand just how much of the $16 trillion back window went to bailing out bankers in EUROPE. Why the hell is the US Treasury bailing out European banks?
I draw a couple of conclusions here. This is not a financial nor is it only an economic problem. It is a political economic problem of a few, dis-empowering the many, for their own psycho-social-pathological gain.
One more tidbit. The unemployment rate “dropped” from 9.1 tom 9.2 based on the number of people who quite looking for work. If you look at seasonal and statistical adjustments this difference is completely subsumed within a much bigger margin of error. It is not statistically relevant and most probably will be revised upward in September.