U.S. jobs figures provide subdued reassurance
Friday’s U.S. jobs figures provide subdued reassurance. The private sector employment gains of 67,000 in August, together with positive revisions totaling 123,000 for previous months, should dispel fears of an economic double-dip for now. With just one more jobs report before November’s elections, the latest data also offer a glimmer of hope for Democrats.
Continued and fairly steady private sector job growth, together with a surprising decline of 323,000 in long-term unemployment should be reassuring for the unemployed and those fearful of losing their jobs. That’s despite that fact that the end of temporary census employment led to a headline loss of jobs in August. It is also likely to help Democrats in November’s midterm elections, blunting the force of Republican attacks on their handling of the economy.
That said the recovery is less than vigorous, whatever the Democrats might claim. Following the last comparably deep recession in 1983, monthly job creation was on average 288,000. So far in 2010, job creation has averaged less than a third of that — and in recent months has gone negative. That isn’t enough to make even a modest dent in unemployment. The civilian non-institutional population aged over 16 has increased by 2 million since last August. Some 65 percent of Americans participate in the workforce, so the 723,000 jobs created since last December are insufficient to absorb new workers.
While there was a modest 0.8 percentage-point increase in the Institute of Supply Management’s manufacturing index in August, the larger 2.8 percentage point decline in its non-manufacturing index also indicates that economic recovery remains sluggish — although here too there is as yet no sign of a double-dip. Employment data confirm this; most of the rise in private sector employment was in healthcare services, while manufacturing employment declined, reversing last month’s increase. With construction employment down 271,000 in the last year, there is also little sign of a positive employment effect from the 2009 stimulus package, much of which was devoted to infrastructure.
In the short term, the jobs picture has improved slightly and fears of a double-dip should lessen. But there’s not yet much on which to pin longer-term optimism.