Oh yeah, that was a lousy jobs report
My pal Tim Kane at Growthology lays it all out:
— The unemployment rate is now 9.1 percent, up from 8.8 percent two months ago. That’s important. Although research shows the U rate is more reliable than the payroll employment numbers over the long term, it might still suffer from a one month blip due to turnover in the survey sample. But a second increase in two months all but nails the coffin shut. By that I mean that the U.S. is experiencing if not a double recession then a historically stagnant recovery.
— The May payroll gains of 54,000 are nothing short of stunning. The U.S. lost 8 million payroll jobs during the recession. Adding 54,000 a month will get the nation back to normal … never! A recovery in the job growth number needs to average 400,000 a month to achieve the simplest recovery in 2.5 years. As it stands, the BLS commissioner is trying to emphasize the good news that the average payroll growth has been 220,000 for the previous 3 months. Let’s be clear: that is not a silver lining, it’s an indictment of the current course.
— The long-term unemployed increased in May by 361,000. Add that to the disturbing uptick in weekly jobless claims, stuck north of 400,000 a month.
— The labor force increased by roughly 1.2 million a year before the recession, peaking at 154.7m in Dec 2008. Two and half years on, it is 153.7m (a million souls fewer). Another way to think of this is that the labor force has roughly 4 million in extra-normal slack, people who have officially left/not joined the labor force but will come in as the economy recovers. This is a recipe for the unemployment rate to rise as things get better, but what we are seeing is the unemployment rising even as conditions slip.