Lousy Is As Lousy Does
GOP Research posted this on September 6, 2013:
“What They Are Saying About August’s ‘Lousy Job’s Report’
From The Washington Post’s Neil Irwin: “Ignore The Headlines. This Was A Very Bad Jobs Report. If you only looked at the headlines on Friday’s August jobs numbers, you’d think ‘Not bad!’
“You would also be completely wrong. Yes, the unemployment rate fell a notch to 7.3 percent in July. Yes, the nation added 169,000 jobs, broadly consistent with the pattern of recent months. But in almost all the particulars, you can find signs that this job market is weaker than it appeared just a few months ago, and may be getting worse. The drop in the unemployment rate was caused by 312,000 people dropping out of the labor force. The number of people actually reporting having a job actually fell by 112,000 in the survey on which the unemployment rate is based.
“And while the overall August jobs number was okay, the Labor Department revised down its estimates of June and July job creation by a combined 74,000 positions. In other words, through the summer, hiring has been quite a bit shakier than it had appeared.
“Jobs numbers ebb and jobs numbers flow, and as always, it would be unwise to make too much of one report. But this one has enough signs of weakness embedded in enough places that it has to make economy-watchers – including those at the Federal Reserve who meet in less than two weeks – reassess their confidence that a solid, steady jobs recovery is underway.
“Consider this: The nation has averaged 148,000 new jobs a month for the last three months. The number was 160,000 for the last six months, and 184,000 a month over the last year. That looks to me like a downward trend, no two ways about it. It’s certainly not the gradual acceleration that most mainstream economists have forecast as 2013 advances and the impact of tighter fiscal policy fades.
“Want another sign? The proportion of the U.S. population that had a job in August was 58.6 percent. Six months earlier, the number was a whopping – and wait for it – 58.6 percent. The year is nearly three-quarters over, and the economy isn’t growing fast enough to put a higher proportion of its citizens back to work.
“You don’t have to squint hard to see evidence that the ‘nice, steady improvement’ theme that has been the conventional wisdom is missing part of the story.
“That has been particularly relevant for Chairman Ben Bernanke and his colleagues at the Fed. The central bank has been expected to start pulling back on the pace of its $ 85 billion-a-month in bond purchases at its meeting Sept. 17-18. The Fed’s entire plan for winding down its ‘QE’ policies, which it planned to conclude in the middle of next year, has been dependent on steady improvement in the jobs market.
“That such a jobs recovery may not materialize has to make them at least think twice, maybe three times, about pulling the trigger on the so-called taper at this policy committee meeting. Adding to the case for waiting is a looming fiscal standoff and rising oil prices set off by the conflict in Syria., which is heightening geopolitical worries.
“This report may not be definitive, but it’s enough to spur a reassessment of how robust the recovery is, and how much confidence any of us have in that view.” –
But wait! There’s more. The Wall Street Journal’s Ben Casselman writes: “There’s no way to sugarcoat it: this was a lousy jobs report. The decline in the unemployment rate was for all the wrong reasons, driven by people leaving the labor force, not by people finding jobs. In fact, the number of people reporting they had jobs – a measure based on a separate survey from the one used to calculate payroll gains – actually fell by 115,000 in August. The labor force participation rate – the share of the population that’s working or looking for work – stands at its lowest level in 35 years.
“The economy has added 2.2 million jobs over the past year, pretty much the same fill-year pace as in July, but only because July’s figures were revised downward. Those revisions are particularly worrisome because the government tends to underestimate job growth when the economy is accelerating and overestimate it when it is slowing – so downward revisions now can auger weaker growth in the future.
“More than four years after the recession ended, finding a job remains extraordinarily difficult. The share of job-seekers finding work fell slightly in August, to 19.5%, while the number of long-term unemployed rose by 44,000. The average unemployed worker has been out of work for more than eight-and-a-half months – a figure that rose for the second month in a row. Little wonder, then, that the number of so-called ‘discouraged’ workers – those who have stopped looking for jobs because they don’t believe any are available – is up from a year ago, and the number of people re-joining the labor force to look for jobs fell in August.
“Even those lucky enough to find jobs aren’t necessarily finding good ones. More than a third of all job creation came in the generally low-paying restaurant and retail sectors, while construction payrolls were flat and a 19,000 job gain in manufacturing was partly a quirk of the Labor Department’s formula for seasonal adjustment.” –
The Washington Post’s Dylan Matthews observed: “The share of young people working – especially in their late teens, but up until their mid-20s too – is down pretty dramatically. There have been sizable (around 5 percent) reductions in the share of people ages 25 to 35 working. And older workers – especially women – are hanging onto their jobs for much longer than they did during boom times …
And Ezra Klein added: “Unemployment among teenagers, African Americans and Hispanics remains insane. Among teenagers, the unemployment rate is 22.7 percent; for African Americans, it’s 13 percent; for Hispanics, 0.3 percent. And remember, those numbers only count people actively looking fro work. Many others would like work but have stopped hunting. In these communities, then, the job market is somewhere between an awful recession and a severe depression.” –