The July employment report isn’t bad, but that doesn’t mean it’s good, either. On the bright side, total private-sector payrolls increased by 154,000, a massive increase over the 18,000 jobs created in June. What’s more, the June numbers improved as well; after revision, the Bureau of Labor Statistics found that the economy created 46,000 jobs that month. A poor number, but not as catastrophic as originally reported. Still, the picture dims as you look further into the new numbers. Total public-sector payrolls decreased by 37,000, as state and local governments cut wokers in response to slow growth and low revenues. On the whole, the economy gained 118,000 jobs in July, better than before, but below the 125,000 jobs needed to keep pace with population growth.
These numbers are lackluster, but they're not so bad as to explain yesterday's stock market dip, when the Dow lost more than 500 points. As Felix Salmon explains at Reuters, stocks are volatile and unpredictable, and sometimes shift in large ways for reasons that are difficult to discern. Insofar that the markets are worried about anything, it’s the usual suspects: high unemployment, poor growth, and a government that has embraced austerity at the cost of further fiscal stimulus.
The worst thing about these numbers is the extent to which they reinforce the inaction of our political system. Another month of terrible jobs numbers might have spurred the political system into action. Not only would the Federal Reserve have begun a third round of quantative easing, but Congress might have stepped up to the plate -- at a certain point, both Democrats and Republicans are endangered by anemic job growth. That these numbers aren’t awful enough, and even suggest improvement, gives policy-makers an excuse to sit on their hands and wait it out.
