Yesterday, ahead of the federal government's monthly jobs report, analysts surveyed by Bloomberg News predicted that the economy would add 100,000 jobs in June. This would be 50,000 jobs below what the economy needs to keep up with population growth, but it would also be a big improvement over May, when the economy added a paltry 54,000 jobs and the unemployment rate hovered at 9.1 percent.
Unfortunately, the analysts were completely off the mark. According to the actual jobs report, the economy added 18,000 jobs and the unemployment rate rose to 9.2 percent. Employment in most private-sector industries was stagnant, and public-sector employment dipped down, with a total loss of 39,000 jobs. Unemployment for blacks and Latinos remained at a respective 16.2 percent and 11.6 percent, and 272,000 people dropped out of the labor force and thus out of the calculation for unemployment – keeping the overall rate lower when it should be a bit higher. Finally, as icing on the cake, job growth for May was revised down from 54,000 to an abysmal 25,000 jobs created.
In a sane country, a jobs report like this would send lawmakers into a deep panic as they scrambled to do something for the growing mass of unemployed people. As it stands, Democratic lawmakers aren’t willing to expend energy on new efforts to reduce unemployment, and Republican lawmakers have staked their ground against federally funded job creation. Instead, the entire political class is trapped in a fantasy world where deficits are the greatest threat to the health of our republic, and spending cuts are the necessary cure. Even President Obama has taken leave of reality; in his most recent weekly radio address, the ostensibly Democratic president endorsed the worst of right-wing economic fallacies:
Government has to start living within its means, just like families do. We have to cut the spending we can't afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.
Given Obama's uncertain odds for re-election, White House political calculations seem like the best hope for further economic assistance, but even that's doubtful. Not only is there an unclear relationship between unemployment and incumbent success in a presidential election, but the Obama re-election team has already ceded high unemployment as an immutable fact of next year’s campaign.
“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” said David Plouffe, senior political adviser for the president. “People won’t vote based on the unemployment rate; they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’”
This might be good analysis, but it doesn't bode well for the swelling ranks of America's unemployed.
