Have I mentioned recently how truly tired I am of writing blog posts lamenting the bad employment situation?
A surprising drop in hiring and in the number of people seeking work in August sent a reminder that the U.S. economic recovery is still prone to temporary slowdowns.
Employers added just 142,000 jobs last month, well below the 212,000 average of the previous 12 months. The unemployment rate fell to 6.1 percent from 6.2 percent. But that was because more people without jobs stopped looking for one and were no longer counted as unemployed.
Analysts took Friday’s Labor Department report in stride. They noted that other gauges of the economy — from manufacturing and construction to auto sales — remain solid. Layoffs have dwindled, too. Analysts also noted that month-to-month volatility in hiring is common even in a healthy economy.
But the dip in hiring also suggests that, though the Great Recession officially ended more than five years ago, the economy has yet to shed some of its lingering weaknesses. Held back by sluggish pay growth, for example, consumers continue to spend cautiously.
I have absolutely no idea how anyone can take this kind of report “in stride.” We need to be consistently creating something on the order of 250,000 jobs per month in order to get back to full employment some time before my Chicago Cubs win the World Series. By falling short of that goal–and let there be absolutely no doubt whatsoever that we are falling short–we are allowing lives to be ruined. I am willing to bet that none of the analysts who took the jobs report “in stride” would be willing to do so if their lives had been ruined by the Great Recession and its aftermath, and it shouldn’t take a jobs loss to be outraged by the fact that our fellow human beings are suffering.
This was not a good jobs report. Certainly not one that suggests a shift into a higher growth gear. The Two Percent-ish economy crawls on. The US economy added 142,000 jobs in August — much less than 225,000 expected — as the unemployment rate ticked down to 6.1%. But the jobless rate fell only because the labor force shrank by 64,000, notes economist Paul Ashworth of Capital Economics. The alternative household survey found employment increased by only 16,000 last month. Also, payroll gains in June and July were revised lower by 28,000, although those downward revisions were all in government. Private payrolls were actually nudged up, according to RDQ Economics. And consider: There are just 1.2 million more private jobs today than January 2008 despite 15.6 million more non-jailed, non-military adults. While the unemployment rate has dropped by 1.1 percentage points over the past year, the employment rate is up just 0.2 points.
Pethokoukis does note that “the year overall is shaping up as one of modest employment improvement.” But he doesn’t seem to be satisfied with the state of the labor market, rightly pointing out that “[t]he anemic economy is generating jobs at the top and bottom, not so much in the middle.” I guess this is the part of the blog post where I write that (a) we shouldn’t be worried about inflation–unlike unemployment, it is not a problem in the short or medium term; (b) we shouldn’t worry about being the beneficiaries of more monetary stimulus from the Federal Reserve–we need all of the monetary stimulus that we can get; and (c) if a Republican were president right now, the media would use the unemployment situation to rake him/her over the coals on a 24/7/365 basis.