Search for jobs strength comes up empty
Hope springs eternal, but it was in short supply in this morning’s employment report. Economists dug through the figures looking for nuggets of strength — but the search yielded no results. The specter of another economic contraction, until recently seen as impossible, suddenly appears on the table again.
If there was anything humorous in the otherwise grim numbers, it was watching overly-bullish Wall Street forecasters try to explain away their errors by downplaying the damage.
Michael Strauss of CommonFund:
The market got a little bit hyped up hoping that the turn in the labor market would have been June. But it’s not going to be until July.
Isn’t that what economists were saying about June in April? Or how is this euphemism from Chris Rupkey at FTN:
It means the soft patch is persisting.
Yes, but the patch is so soft that the ground is about to give. David Semmens at Standard Chartered was more direct.
It’s a terrible number, there is no good news you can glean from it.
Credit Suisse’s Jonathan Basile went with the headline “No Silver Lining.”
Record levels of long-term unemployment offer a particularly discouraging picture of the nation’s job woes. Some 6.3 million Americans, or 45 percent of the jobless population, has been without a job for six months or longer.
Fed chief Ben Bernanke and others have warned that this poses a serious challenge for the economy’s health, and risks creating a vicious cycle of joblessness that could last for many years.
But neither monetary or fiscal authorities appear quite willing — or perhaps able — to do anything about it. The Fed has not only slashed rates to zero but also bought some $2.3 trillion in mortgage and Treasury bonds. The latest round of bond-buying proved controversial, and the negative reaction appears to be inhibiting Fed officials from doing more.
At the same time, Congress is debating spending cuts rather than additional stimulus. Republicans are refusing to raise the nation’s debt ceiling — raising the specter of a potentially devastating U.S. default and loss of its prized AAA credit rating — even though it applies to money already spent or committed to spending by the U.S. Treasury.
Against that backdrop, jobless Americans seem to have few places to turn. In the meantime, the jobless rolls lengthen.