James Pethokoukis

Politics and policy from inside Washington

The horrendous June jobs report

July 8, 2011

When economists are expecting 100,000 or so net new jobs, and the Labor Department reports measly gains of just 18,000 (plus an increase in the unemployment rate to 9.2 percent), the reaction sounds like this:

– “All in all, an employment report with no redeeming features whatsoever – employment, unemployment, hours and wages all disappointed.”- Barclays

–  ”The June jobs report was a shocker. It was far worse than expected, and weak on all key dimensions – job creation, unemployment, the length of the workweek, and hourly earnings. The recent pattern of jobs suggests that the economy hit a brick wall in May.” — IHS Global

– “Overall the June Employment Report was quite disappointing, with basically no positive offsets to the poor headline results.” — Goldman Sachs

–  ”The June employment report was universally weak and undoes the modest improvement in the economic data we have seen over the last two weeks. We are back where we started; the risk of a cold summer, similar to last year, is palpable.” — BofA Merrill Lynch

–  ”It is hard to excuse this report on supply-chain disruptions and it suggests that growth momentum evaporated as the second quarter drew to a close.”- RDQ Economics

–  ”Unfortunately, leading labor market indicators like temporary help employment, aggregate hours worked and first-time jobless claims remain weak and thus do not suggest an imminent reacceleration in the labor market.” — MKM Partners

Indeed, if the labor force, which shrank again, was as big as it was when President Obama took office, the unemployment rate would be north of 11 percent. As it is, the broader U-6 measure surged to 16.2 percent from 15.8 percent. But with an economy growing at just 2 percent or so, expectations should be low.  If the economy picks up in the second half, so should job growth.

But we have a long way to go before getting the unemployment even back to 8 percent or so by Election Day 2012, needing some 255,00 jobs a month. Obama’s political team seems to think the unemployment rate does not matter. We shall see. At his new conference today, Obama offered plenty of excuses, including blaming uncertainty over the debt ceiling:

We’ve always known that we’d have ups and downs on our way back from this recession. And over the past few months, the economy has experienced some tough headwinds — from natural disasters, to spikes in gas prices, to state and local budget cuts that have cost tens of thousands of cops and firefighters and teachers their jobs. The problems in Greece and in Europe, along with uncertainty over whether the debt limit here in the United States will be raised, have also made businesses hesitant to invest more aggressively. The economic challenges that we face weren’t created overnight, and they’re not going to be solved overnight.

Hardly the stuff for a soul-stirring campaign ad. A few other observations:

1) Will Obama now make a renewed push for a payroll tax cut extension to be part of the debt ceiling negotiations?

2) Will Tim Geithner leave sooner rather later to be replaced by someone with a job-creation background like GE’s Immelt or Facebook’s Sandberg?

3) Will Rs dig in even further against raising taxes?

4) Will Obama’s approval numbers fall below the plateau they’ve sort of been stuck on (not counting the OBL  bounce.)

5) Will the weak economy nudge another GOPer to get into the 2012?

 

 

Comments

The pundits that express BHO’s naivete or inexperience are dead wrong. This Soros puppet is doing what he’s told which is a blitz krieg march toward a one world government which first requires the dismantling of the USA. He’s on message, target, on schedule and only when we accept this can we bring about a plan and a candidate to execute the plan to return American to Americans.

Posted by tgambogi | Report as abusive
 

I built on your comment about 11.4% and looked at Texas’ unemployment rate, had the labor force held steady. Texas’ unemployment rate would be much lower using that concept, because so many people are moving to Texas looking for work. Some interesting data: http://www.willisms.com/archives/2011/07  /trivia_tidbit_o_934.html

Posted by WILLisms | Report as abusive
 

Yes to all your questions! More downsizing ahead folks-the public sector has massive debt and no choice but to downsize for years! 4 day work weeks (32hrs) for non essential gov might work-saves jobs, it’s the green thing to do and should improve productivity and reduce waste!

Posted by DrJJJJ | Report as abusive
 

You can always tell a socialist, you just can’t tell him anything! Spend our way out? Yes, we will have to cosnider modest tax increases for all and soon-more jobs lost FYI!!

Posted by DrJJJJ | Report as abusive
 

What Does Obama do After the Presidency?

Some of us believe he will either run for Pope or Pharaoh. Pope is probably the preferred role, but that would mean Barack would have to convert to Christianity. Pharaoh is interesting, but we haven’t had one for 4 thousand years. So, what’s he to do? Answer: Metamorphose into God! The Upper Room! What a hoot! Better than Mt. Rushmore! Think about it. At last we would all have a clear picture of what The Deity looks like, rather than having to rely on this Son of God stuff. 

He could go to the Church of Jeremiah Wright and finally get things in order. He could tell the Pope what to do! And when Barack dies, we can go into a Hundred Years of Mourning, as Life as We Know It will be over. An eternal flame comes to mind, a la JFK. But JFK was mortal! Maybe a Perpetual Blimp complete with sarcophagus would fit the bill. We could send The Blimp on a World Tour! Can you imagine The Blimp of God floating over the major cities of the world? At night, all you would see would be The Likeness of Him with no distractions. Wow! And who would pay for The Blimp? Why, the IMF, of course. They’ve apparently got money to burn. More to come if it turns out that tomorrow is not, in fact, the end of the world. 

Posted by GilZimmerman | Report as abusive
 

1. Natural disasters – quit blaming a Japanese halt in manufacturing for jobs lost in the US. If anything, their companies would have been forced to shift production to plants here, and consumer frustrations with wait-times would have led to US companies competing for those shifting consumers. Both lead to net gains in employment.
2. Gas prices – The president’s policies are to obstruct development of carbon-based resources in the US, while funneling billions of dollars to Brazil and other countries for the exact same purpose. He is certainly not doing anything to restrain gas prices.
3. State and local budget cuts – we are talking a loss of MILLIONS of jobs in the US, and his explanation is “tens of thousands” of jobs? Hopefully his daughters are doing their math homework on time, and can share their knowledge of multiples with their father.
4. Greece and Europe – glad Obama noticed! Yes, that is what happens when a country spends to appease every special interest with no acknowledgment of the real effects national debt. Eventually the house of cards falls, and the special interests don’t say “thank you” and pull their greedy hands back, they riot.
5. “Uncertainty over the debt limit” – I am amazed that Obama would acknowledge that uncertainty does indeed affect investments. But, believe it or not, the government’s debt limit is not what businesses worry about; in fact, it’s not even on their accounting spreadsheets. It is their own tax-rates and the cost of employing people that have line-items in quarterly budgets. Give them a clear idea of what those two items are, clearly project stability, and yes, they may choose to make more long-term investments in the US workforce.

Posted by poppabfunk | Report as abusive
 

one must wonder why mr obama didn’t use yet another car analogy to describe the trouble the economy is having regaining its footing…….”the car is in the ditch” or his famous “bump in the road”… well i will suggest one for him, things have gotten so bad under his policies, the “air bags have just inflated”.

Posted by mrbeverage | Report as abusive
 

Comrade Obama is the greatest spender of other peoples money in the history of the republic. And with the economy continuing to trend sideways at best perhaps the people will finally wake up and fire him and his incompetent administration in 2012.

Posted by dpendable | Report as abusive
 

Predictions:
1. O will not push for a payroll tax cut extension. He will be fighting too hard to maintain trillions of dollars in political patronages to worry about people that work and are unlikely to vote for him anyway.
2. Geithner will leave to be replaced by someone with also no-job-creation background. No one in this administration has any job-creation experience, and that is not about to change.
3. The R’s will cave in like wet toilet paper – Congress always acts to the detriment of the nation, and this will be no different. Taxes, like inflation, are heading up.
4. Obama’s approval numbers will not fall below the plateau they’ve been stuck on because 47% of the country doesn’t pay taxes and doesn’t give a hoot if the nation dies or not.
5. Perry will run. Maybe win.

Posted by James7 | Report as abusive
 

You’re elected to solve the problems, not to enumerate the problems. Why don’t you go back to Kenya and let me take your place. I can describe the problems better than you. I won’t need a teleprompter, and I won’t stutter.

Posted by huntlai | Report as abusive
 


OK.

We’ll compromise.

Barack Obama is the smartest…..idiot on the planet.

Enough compromise?

Posted by TheEnforcer | Report as abusive
 

Obama is sputtering. He really doesn’t have a clue, and we are really in big trouble.

Posted by JohnDavis | Report as abusive
 

“one must wonder why mr obama didn’t use yet another car analogy to describe the trouble the economy is having regaining its footing…….”the car is in the ditch” or his famous “bump in the road”… well i will suggest one for him, things have gotten so bad under his policies, the “air bags have just inflated”.”

^^ I know why the car will never be driven out of the “ditch”

Government mandated CAFE standards producing “green” cars with batteries, unfortunately lack the horsepower and torque needed to drive out of the ditch.

Posted by 2DoorHo | Report as abusive
 

Good post but why are you singing the praises of a rent seeker like Immelt? GE’s jobs growth is way too reliant on the US taxpayer and let’s not even get into TARP and their bank.

Posted by TomLindmark | Report as abusive
 

Now, the enigna that was jobs “created and saved” is solved. Private sector businesses create jobs, while Obama saves government jobs. Now that stimulus, QEs 1 & 2 ets funds have dried up, states, required by law to balance budgets. are shedding jobs. These once-saved jobs are jobs which, under normal economic downswing should have been lost, Which were propped up by tax money.

Obama’s election strategy? Saved government jobs equal saved union votes. Onward, liberal soldiers!

Posted by Copa | Report as abusive
 

Mainstream Media Is Not Reporting On Incredible Trend in Palin Poll Numbers
http://www.freerepublic.com/focus/f-blog gers/2732107/posts

If Sarah Palin Gets in the Race, She Will be the Candidate to Beat
http://www.freerepublic.com/focus/f-blog gers/2732070/posts

Palin can ‘snap her fingers’ for money, run and beat Obama, warns GOP expert
http://www.freerepublic.com/focus/f-blog gers/2731881/posts

Posted by DisabledVeteran | Report as abusive
 

We have to be aware of how the political system functions in the USA. The electorate wil always vote for their pocketbooks. Sensing this, the Politician (Democrat or Republican) will cater to whatever group he can count on for votes. Note the rise of the Medicare/Medicaid/Obamacare, Social Security, Unions, etc. groups as many-voter blocks of votes that are fully dependent on the Politician. The votes will go to the Politician who paints a rosy picture of his plans, promises everything, but at absolutely no or little cost to the voter. So, when the Politician gets into power, he will first look out for ‘Numero Uno’, aka himself. After that, he has to pay the electorate for the votes. Note that paying for the votes costs the Politicians very little, since after all, he is spending other people’s money — a little bit to this group, and that group. It is very easy if there is money in the till. But if there is no money in the bank, bonds can be sold to raise funds for the cause – theu call this deficit spending. Since the bill for the bonds comes much later, everyone is happy, since no one in the present has to pay anything – until the bonds come due, falling on the future generations down the line. Note that this game can keep doing this for a very long time. Unfortunately the bonds are due, with interest. So this present dance ritual of the Politicians posturing over the debt ceiling is merely a show to please their respective Electorate — after all, they aren’t looking out for the interests of the Electorate, and themselves at the same time.
The debt ceiling will definitely be raised. Not to do so would mean the end of the game for both parties — the Democrats now (sorry Unions etc, no can do), and the Republicans later. Both parties have a vested interest in doing so. Imagine them not being to ‘kick the bill down to the next generations?’. Isn’t this the Best Government that our money can buy? If not, we then have to select some other Politician who can promise us even more benefits for our vote! And this is the promise of America.

Posted by Eu_Jen_Ek | Report as abusive
 

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