Well, jobs dropped off a cliff in May, expanding by only 38,000, well below forecast, while the the number of people who have dropped out of the workforce crept back to its historic high of December 2015.
U.S. companies slowed their hiring drastically in May and unemployment fell as people dropped out of the labor force, a bleak picture for Federal Reserve officials as they prepare to debate increasing short-term interest rates at a policy meeting this month.
Nonfarm payrolls rose by a seasonally adjusted 38,000 in May, the weakest performance since September 2010, the Labor Department said Friday. Revisions showed employers added a combined 59,000 fewer jobs in April and March than previously estimated.
The share of Americans participating in the labor force fell to 62.6% in May, down 0.2 percentage point from April and matching the level from December 2015.
This makes sense because the Obama economy expanded the last quarter of 2015 and the first of 2016 at the measly rate of one percent. The labor force participation rate is at the lowest levels in 40 years, which also makes sense, not just because there aren’t jobs, but because there’s so much free government stuff out there that people are making a rational decision not to work.
President Obama is walking around – I’m sorry, flying around, at taxpayer expense – bragging about how the economy is picking up and we’re creating jobs finally and unemployment is going down and THANK GOD FOR MY POLICIES.
What policies? The stimulus was five years ago. That’s not making jobs today. That’s like saying I have to pee because of all that Gatorade I drank last week.
Very simply the repeated extensions of jobless benefits seem to have suppressed employment, and the termination of the unemployment benefit extensions by Congress at the end of 2013 – derided as heartless and inept by Obama and his Democratic allies – coincided with a substantial pickup in job gains this year.
According to the Wall Street Journal:
Job growth in 2014 was roughly 25 percent higher than any post-2009 year. Joblessness plunged to 5.6% from 6.7%. Net job creation averaged 246,000 a month. What happened?
Assuming that the pre-2014 trends would have continued among the two groups, the authors find that “the cut in unemployment benefit duration led to a 2% increase in aggregate employment, accounting for nearly all of the remarkable employment growth in the U.S. in 2014.” They then confirm these results with a second experiment that compares adjacent counties in different states whose economies are otherwise equal except for their unemployment benefits.
Notably, job growth improved most in states and counties that offered the most generous benefits before Congress took away the punch bowl. This suggests that the extra jobless benefits reduced the incentives for businesses to create jobs and for jobless workers to fill the vacancies.
Paying people not to work means they have less incentive to get on a payroll. More generous benefits also discourage businesses from hiring. Since benefits raise the price at which people are willing to search for work, employers must pay above-market wages in the more generous regions, and respond by creating jobs elsewhere or not at all.
The study actually emphasizes the latter point, that with the cost to hire lowered, businesses started looking for new employees. That the unemployment insurance extensions would have a deleterious effect is exactly what conservatives were arguing, to much opprobrium, in 2013.
One of them wrote:
Long term unemployment under President Obama is at the highest level since at least the end of World War II, threatening to create a permanent underclass of workers who will find it difficult or impossible to obtain jobs in the future. What’s more, Obama’s insistence on repeatedly extending long term unemployment benefits may be fueling the unemployment problem.
A paper released by the Boston Federal Reserve paints a pernicious picture of the problem: Employers seem to be throwing out the resumes of the long-term unemployed and only hiring those who have been without a job for less than six months. Meanwhile, with the guarantee of benefits rolling in, the long term jobless might not be looking aggressively enough for work, the paper states.
“I hope a few reasonable and empathetic Republicans will join my colleague from Nevada, Sen. Heller, and help us advance this bill,” said Senate Majority Leader Harry Reid about legislation to extend unemployment benefits in 2013. The was the extension that finally didn’t pass.
National Economic Council Director Gene Sperling gave one of his typically plaintive performances in the briefing room, as I wrote in 2013, lamenting, “today and tomorrow are the days that the 1.3 million Americans will find their temporary lifeline not in their mailbox.”
Aww. Instead, they’re finding a paycheck in their mailboxes.
Obama even appeared last January at the White House accompanied by a few poor unemployed souls whose job searches somehow took them to the East Room:
And getting people back on the job faster is one of our top priorities. But I have to confess, last month, Congress made that harder by letting unemployment insurance expire for more than a million people. And each week that Congress fails to restore that insurance, roughly 72,000 Americans will join the ranks of the long-term unemployed who have also lost their economic lifeline.
And for our fellow Americans who have been laid off, through no fault of their own, unemployment insurance is often the only source of income they’ve got to support their families while they look for a new job. So when Erick was out of work, it’s a lot harder to look for work if you can’t put gas in the gas tank, if you’re worried about whether there’s food on the table for your kid. If Mom isn’t making the rent and paying her phone bill, it’s a lot harder for her to follow up with a potential employer. Unemployment insurance provides that extra bit of security so that losing your livelihood doesn’t mean you lose everything that you’ve worked so hard to build. And that’s true whether you’ve been out of work for one month or six months.
Here’s the essential difference between the liberal and the conservative mindset. Obama thinks not having the cash provided by welfare makes it “a lot harder to look for work if you can’t put gas in the gas tank, if you’re worried about whether there’s food on the table for your kid.” Conservatives have another idea: These problems actually make it a lot easier. I mean, who is going to ignore their alarm clock and miss the interview if they’re out of money?
Honestly, I vote for making this woman the chairman of Obama’s Council of Economic Advisors. I’m not joking. She has a better economic program than any I’ve heard out of this administration. It’s called the STOP BEING LAZY AND GET A JOB initiative.
The U.S. economy added 214,000 jobs last month, the Labor Department reported today, slightly below expectations but still at a decent pace which suggests demand for labor continues to grow.
The unemployment rate fell a tenth of a point to 5.8 percent, while job gains for the prior two months rose 31,000, with the new September number coming in at 256,000 and the August tally at 203,000 jobs added.
The labor force participation rate remains at historic lows, however, rising just a tenth of a point to 62.8 percent, suggesting many still are not looking for work either because they are discouraged or they’re getting enough benefits elsewhere. By a separate measure, the number of unemployed workers, discouraged workers, and those unwillingly working in part-time jobs fell three tenths of a point to 11.5 percent in October.
Pay increases also are basically stuck, with the average hourly wage rising only 3 cents to $24.57, just two percent over a year ago, which is about where inflation is.
Swamped just a few days ago by the Republican tide, the White House today performed a little victory dance.
“With today’s report, the unemployment rate is falling as fast as at any point in the last thirty years, and the economy is on pace for its best year of job growth since the late 1990s,” said Council of Economic Advisors Chairman Jason Furman.
President Obama got some welcome news today as the U.S. economy generated 248,000 jobs last month, the unemployment rate fell to 5.9 percent, a six-year low.
Economists had been expecting about 215,000 jobs and thought the unemployment rate would remain about 6.1 percent.
Job growth was stronger during the summer than previously thought, with 181,000 jobs created August instead of 142,000 and 243,000 in July, ahead of the previous estimate of 212,000.
But some of the progress is less impressive than it seems. The jobless rate, which at 5.9 percent is still higher than it should be, in part reflects the declining number of Americans in the workforce. The labor force participation rate, already at historic lows, actually fell a tenth of a point last month to 62.7 percent, the lowest level since 1978.
Hourly earnings for private sector worker fell a penny to $24.53.
I wonder if the president knew yesterday, when he did what was deemed a politically unwise thing and helped nationalize the midterm elections by characterizing them as a referendum on his economic policies.
“Make no mistake: these policies are on the ballot. Every single one of them,” Obama said at Northwestern University.
The president is not supposed to get advance notice of the jobs report.
According to the Wall Street Journal, the jobs report could be a sign of a real, as opposed to the usual illusory, return to growth:
Stronger job creation this year has boosted hopes the economy will emerge from the subpar 2% growth pace of recent years and into a stronger phase. There are early signs of that happening.
Gross domestic product—the broadest measure of U.S. output—grew at a 4.6% annual rate in the second quarter, equaling the fastest pace of the recovery. That partly reflected a rebound from a winter contraction. But many economists expect GDP growth to clock in near 3% in the third quarter, suggesting sustained momentum.
What’s left out of much of the analysis is that, if this is the return of a stronger economy, it took the president five years to achieve it. And that’s a lot of suffering in the meantime.
What’s more, the massive new regulations he has inflicted on the country – including but not nearly limited to Obamacare – and the debt he has saddled it with portend disaster down the road.
But that will perhaps be for someone else to fix. Unless, like Obama’s mistakes overseas, his errors domestically come back to haunt him before he is done.
Oops. Every time you think this Obama economy is gettin’ goin’ . . .
The economy generated only 142,000 new jobs in August, a sharp decline from the 200,000+ jobs it had been creating all year and a vast disappointment for economists who had expected the number to come in at around 225,000.
Meanwhile, in another disappointment, the already historically low labor force participation rate fell to 62.8 percent in August from 62.9 percent in July.
The economy picked up in the second quarter of the year, but it’s not clear that’s helping workers.
“Despite stronger job growth this year, government figures have so far offered little evidence that workers are seeing higher wages or that people who left the labor force during the recession are returning in large numbers,” the Wall Street Journal reported.
September’s upcoming jobs report now assumes great importance, as a second slack job report will suggest August’s number is not a “blip” but an accurate reflection of slowing job gains.
The unemployment rate declined to 6.1 percent, but that may be more a reflection of the number of people looking for jobs than actual employment gains.
White House Council of Economic Advisors Chairman Jason Furman said everything was going great:
Although the pace of job gains in August was below recent months, the broader trends are moving in the right direction. To continue to support the progress our economy has made, the President will act wherever he can to create good jobs, facilitate investments in American infrastructure and manufacturing, and make sure that hard work pays off with higher wages.
Well, higher wages will decrease the number of jobs, but, whatever.
Notice there’s nothing there about unleashing the private sector. “The president will act . . . ” Furman says, not recognizing that this is in fact the problem.
The President will “create good jobs.” Please, sir, leave us alone!
The economy generated another 209,000 jobs in July, marking the six straight month it has created 200,000 jobs or more, the Labor Department announced this morning.
Nevertheless, the labor force participation rate remains near a 40-year low, rising just barely from 62.8 percent to 62.9 percent. And unemployment moved back up a tenth of a point to 6.2 percent, reflecting the increased number of people who have joined the job market and are looking for work.
President Obama and his economic team of course have begun relentlessly crowing about the jobs market after five and a half years of, well, nothing to crow about.
In a statement, White House Council of Economic Advisors Chairman Jason Furman set up the fall guy – Republicans in Congress – should the jobs numbers go south:
To ensure this momentum can be sustained, the President is pressing Congress to act to create jobs and expand opportunity, while simultaneously using his own executive authority to encourage investment in the United States, boost the income of working families, and ensure safe and fair treatment of American workers.
And in a typically misleading White House assertion, Furman claimed:
Looking at a range of indicators of unemployment, it is clear that we are far into the economic recovery—and that progress has been broadly shared—but we are not all the way there yet. The official unemployment rate is 80 percent of the way back to its pre-recession level.
Right. But Furman is deep into cherry picking here.
It was just two months ago when the nation finally recouped the 8.7 million jobs lost during the recession. However, because of population growth, the economy is still about 6.5 million jobs short of where it should be.
That is, assuming a decent jobs growth rate continues, we’re still three years away from getting back to where we were.
And an increasing share of the jobs created are part time or low-pay.
Crummy jobs created at a sloth’s pace. That’s the Obama record.
The Labor Department today said the economy added 288,000 jobs in June while the unemployment rate dipped to 6.1 percent from 6.3 percent, signaling sustained, robust job growth has arrived, at least for now.
May’s increase was adjusted up to 224,000 from 217,000 while April’s number was pegged at 304,000 from the previous estimate of 282,000.
What? The Labor Department reported today that the economy created 217,000 jobs and Koffler is saying it’s a mixed report?
Yeah, it’s a mixed report. You wanna take this outside?
Sorry, its’ the New Yorker in me.
Yes, an increase of 217,000 jobs is a decent number. It’s not spectacular, but it’s good. The economy has added more than 200,000 jobs a month since February, which is also good.
But remember, we’re five years out of the recession. Job growth at some point should have been thumping at an even higher rate, and it never did. And it takes an increase of about 150,000 just to keep up with population growth.
What’s more, celebrating what finally seems to be a mildly humming job market at this point is like having a baby after being pregnant for two years. It’s nice to see the kid, but boy, what a miserable wait.
Now, here’s the other news. The unemployment rate was unchanged at 6.3 percent. Okay, it’s been coming down, hopefully this is just a pause. But there remains an intractable problem: The workforce is in decline. At 62.8 percent, the labor force participation rate stayed at its lowest level since the late 1970s.
Whether lured by expanding welfare benefits, conditioned to being out of work, depressed about their prospects, too old, or out of work so long they don’t think anyone will hire them, millions of people just aren’t working. This is the Obama economy – a new class of workers who seem to be completely stuck.
The Labor Department this morning reported that the nation added 175,000 jobs in February, a middling number that will do nothing to address joblessness in the nation. In fact, the unemployment rate in February rose to 6.7 percent from 6.6 percent in January. The latest numbers put job increases at 129,000 jobs in January and… Continue Reading
Five years into President Obama’s administration and more than six years after the recession began, unemployment is the biggest concern troubling the minds of Americans, according to a new Gallup poll. Americans, it appears, are not buying the rosy White House line about all the jobs being created and all the “consecutive months” of job… Continue Reading
The U.S. economy added only 74,000 jobs last month, a circumstance clearly attributable to George W. Bush, because President Obama’s policies do not cause such things. “It’s obvious that the long, dark shadow of George Bush continues to haunt the economy,” said White House National Economic Council Director Gene Sperling. “What’s more, even after leaving… Continue Reading
In a surprise, the Senate is on track to approve a three-month extension of unemployment benefits, but the White House is refusing compromise by trying to find offsets for the $6.5 billion cost, all but guaranteeing that the House won’t pass the bill and the measure will end up as a political pawn for Democrats.… Continue Reading