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Archive for Friday, June 3, 2011

Bleak jobs report dampens hopes of steady growth

June 3, 2011

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— A bleak jobs report suggests the recovery from the Great Recession will be longer and bumpier than many economists had envisioned.

Most economists say job growth should strengthen later this year as gasoline prices drop further and the economy recovers from the effects of natural disasters in the U.S. and abroad. But the recovery is starting to weaken 17 months before the 2012 election, which could hurt President Barack Obama’s re-election prospects.

The unemployment rate in May inched up to 9.1 percent from 9 percent, the Labor Department said Friday; when Obama took office, it was 7.8 percent.

The Conference Board, a business research group, predicts the rate will be 8.5 percent at the end of next year. That would mean Obama would face a higher unemployment rate than any president running for re-election since World War II.

“The recovery has not been derailed, but it’s slow,” said Michelle Meyer, an economist at Bank of America Merrill Lynch. “We’re still in a muddle-through period.”

Only 54,000 jobs were created in May, the fewest in eight months. By contrast, an average of 220,000 jobs were created in each of the previous three months. Private companies hired only 83,000 workers in May — the fewest in nearly a year — while state and local governments cut 30,000 jobs.

The Dow Jones industrial average finished down 97 points, its third straight loss. The Dow, Standard & Poor’s 500 and Nasdaq composite have all declined in each of the last five weeks, the longest losing streak since mid-2008.

Several chronic problems are weighing on the economy. Home prices are still falling. The average worker’s pay isn’t keeping up with inflation. Cutbacks in spending by state and local governments are contributing to slower growth, even in the private sector. And members of Congress are preparing to cut spending.

Gas prices climbed to nearly $4 a gallon this spring. They’ve since declined to about $3.79 and are expected to fall more, possibly freeing consumers to spend more on goods such as cars, appliances and furniture. Consumer spending accounts for about 70 percent of the economy.

But even if gas prices dip, they’ll likely remain high and continue to squeeze consumers and the industries that depend on them. For example, companies that rely heavily on motorists — like hotels and restaurants — cut employment in May.

Even economists who think hiring will pick up don’t expect it to grow very fast.

Heidi Shierholz, an economist at the liberal Economic Policy Institute, expects employers to add about 150,000 jobs a month for the next few months. Up to 300,000 new jobs a month would be needed to significantly drive down the unemployment rate.

Among the deepest job cuts were those in local governments, which slashed 28,000 last month, the most since November. Nearly 18,000 were in education. Cities and counties have cut jobs for 22 straight months. Since September 2008, 446,000 jobs have vanished.

State and local government job losses are likely to persist. Though state tax revenue is recovering, states face rising costs for Medicaid and other services. And localities rely on property tax revenue, which will likely continue to shrink because home prices in most areas are still sinking.

“What we need is more government spending to create jobs,” Shierholz said. The 2009 stimulus package is largely spent, she said.

Republicans in Congress argue that Washington should instead cut spending and taxes to help generate hiring.

There’s little appetite on Capitol Hill for more stimulus spending. And by the end of this month, the Federal Reserve will end its most recent drive to pump money into the economy.

Comments

cato_the_elder 3 years, 4 months ago

Obama's massive Porkulus spending has been a colossal failure. Wake up, America. Government cannot create prosperity. Only private enterprise can.

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Crazy_Larry 3 years, 4 months ago

Let's think back to a time long, long ago: "keep the bush tax breaks in place, it will create jobs." Tax breaks are still in place...Where are the jobbie job jobs?

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just_another_bozo_on_this_bus 3 years, 4 months ago

"I am a Contracting Officer for the Veterans Administration."

In the interest of all that is good and patriotic, shouldn't you quit your job and get one in the private sector?

BTW, when are all those tax cuts to millionaires/billionaires going to start creating jobs? Taxes for the wealthy have been going down dramatically ever since Ronnie Rayguns some 30 years ago, but for some reason, their share of the overall wealth keeps going up, and the unemployment rate keeps going up right along with it.

Care to explain that? Please use simple math that even a liberal can understand.

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just_another_bozo_on_this_bus 3 years, 4 months ago

"Why would I do that?"

Because your endless refrain around here is that government and taxes are evil. But you're lining up at that evil trough.

Doesn't that make you evil? And most likely an unproductive slacker, given that no one in government does any actual work?

"Not sure why I would waste my time."

I know. Because you're a hypocrite, and there's no explanation that would explain that fact away.

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just_another_bozo_on_this_bus 3 years, 4 months ago

" The only statement I have made about government has been that government has grown too large and more taxes are not the answer."

Sounds to me that bigger govt. and more taxes is precisely what you need in your department.

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just_another_bozo_on_this_bus 3 years, 4 months ago

And the Corps of Engineers does all of this overflow for free?

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just_another_bozo_on_this_bus 3 years, 4 months ago

That's all well and good, but your overall belief still seems to be that nearly everybody that works with you is doing a good job, well worth the money, but those who work in other government agencies are scum of the earth, wantonly wasting God-created tax dollars.

Sounds to me like the beliefs of an ultra-parochial, willfully ignorant hypocrite.

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just_another_bozo_on_this_bus 3 years, 4 months ago

Give me a break. Are we supposed to pretend your incessant anti-government screeds don't exist?

I have no illusions that everything the government does, or that everyone who works for the government, is perfect.

But if your defenses of yourself here are sincere, please cut the broadside slams against all other government employees, the vast majority of whom you have no clue about one way or another.

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just_another_bozo_on_this_bus 3 years, 4 months ago

I have confidence that'll continue to supply it, provided you continue posting.

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Crazy_Larry 3 years, 4 months ago

You frickin' socialist...why don't you get off the government dole and go get a real job?

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Crazy_Larry 3 years, 4 months ago

Keep the Bush tax cuts for the rich in place! It will create jobs! (yeah, right)

The tax breaks aren't working and neither is government spending....what now?

More tax breaks for the rich!

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labmonkey 3 years, 4 months ago

Okay... quit looking to the government to supply jobs. We Americans are to blame. If you have a job and can afford American made items over Communist Chinese items, it is unconscionable and unpatriotic to purchase the Chinese or non-American made item. And Americans need to DEMAND that companies produce items in the United States or we aren't going to buy them. More American made items purchased = more American jobs = more tax money into the government coffers.

Give companies that employ a 100% American workforce a tax break, and states need to lower sales taxes on items produced in their states. Quit spewing this line of crap about "green jobs" which is a myth (in Spain every green job created has cost 2.2 other jobs), and quit the overbearing environmental regulations, which hurt jobs and usually end up being worse for the environment in the long run (i.e. the little curly light bulbs made in China... with energy produced from unfiltered coal plants and then shipped on a huge cargo ship to the States...because they are too toxic to produce in the United Sates, or even in your home when you have to wash your dishes or clothes twice because the water saving appliances don't work as well as the old ones).

Buy American, demand American before it is too late.

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just_another_bozo_on_this_bus 3 years, 4 months ago

You make some good points, but oversimplified answers usually don't work, as they usually miss the real problems.

Nice try though.

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kansanbygrace 3 years, 4 months ago

Well, the Constitution requires the federal government to regulate commerce and for 150 or so years, while the nation was growing to our significant world role, it was almost fully funded by the customs house. By fulfilling the Constitutional mandate to protect America first, we could very simply use the customs house, NOT in "protectionism" or "punishment" but as a simple balancing of factors to give American producers an even shot, while funding the necessary functions of government and unloading the tax burden somewhat from the dwindling number of productive people.
The balance not funded by the taxes taken at the ports of entry could easily be raised by assessing each person who earns over the poverty level of about 8,k at 4 or 5% of income. Buying American would then be a comprehensive reality employing Americans and paying Americans for producing our own needs first.

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just_another_bozo_on_this_bus 3 years, 4 months ago

I agree.

Here's an idea. Put a tariff on goods imported from countries that don't pay at least the American minimum wage, sufficient enough to make up for the wage difference.

And implement a carbon tax on all energy inputs into the manufacture of any product, domestic or foreign. This would not only create incentive to move away from fossil-fuel intensive electrical generation here, but also abroad-- particularly in China where they rely heavily on very dirty coal.

Bottom line is that so-called "free trade" has absolutely nothing to do with freedom. It's all about "capital" being allowed to find the cheapest deal available, almost always at the expense of those who can least afford it.

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BigPrune 3 years, 4 months ago

Yet again the lying Obama Administration is cooking the books again on the unemployment rate. Try over 22% unemployed.

Why doesn't the press or leftstream media ever question this disingenuous administration?

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Crazy_Larry 3 years, 4 months ago

That's an easy one, it's the same reason the press didn't question the G.W. Bush administration...they're owned by the same corporatocracy.

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kansanbygrace 3 years, 4 months ago

I believe that quarterly reports, that is, three months at a time, are the accepted way to look at employment. We have had fifteen months of job creation after about seven years of job losses. The job increases have not yet made up the deficit. I would not spend my time trying to understand long term complex situations one datum at a time, nor presuming conclusions on so little information. The fact is, the huge giveback to the rich in Pres. Bush's tax breaks did not result in net job increase, and to expect it to somehow magically change when tried again might be too optimistic for me.

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just_another_bozo_on_this_bus 3 years, 4 months ago

"and to expect it to somehow magically change when tried again might be too optimistic for me."

You mean insane, not optimistic, right?

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kansanbygrace 3 years, 4 months ago

a euphemism, bozo....a little weary of the hyperbolic rhetoric, thought I'd understate it for a change.

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just_another_bozo_on_this_bus 3 years, 4 months ago

Sadly, the hyperbolic rhetoric often isn't all that hyperbolic.

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Flap Doodle 3 years, 4 months ago

The sooner the Campaigner in Chief is returned to his mob-financed Chicago mansion the better off America will be.

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kansanbygrace 3 years, 4 months ago

You need a shave. That'd fix a lot of what's wrong with 'merica. That'n gettin' out of yer winter hat.

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Crazy_Larry 3 years, 4 months ago

"Keep the Bush tax breaks in place because it will stimulate the economy and create jobs!"

I have ocean front property in Topeka you may be interested in.

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jayhawklawrence 3 years, 4 months ago

Making such a big deal out of one month's results seems politically motivated to me.

The air has been leaking out of the economy since we started two wars and gave tax cuts to rich people.

Wasn't the theory at that time that this would actually generate MORE revenue?

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just_another_bozo_on_this_bus 3 years, 4 months ago

Your assignment, should you choose to accept it, is to make sure that the company you work for (you do work in the private sector, right?) has absolutely no business dealings with government entities. And that businesses that they deal with are likewise pure. I'd think that as pure as you are, there should be at least 6 degrees (or is that too few?) of separation between you and any of that fake government money.

It would be a travesty to find out that you have received tainted money from tainted enterprises.

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just_another_bozo_on_this_bus 3 years, 4 months ago

Try as you might, I'll never be the ideological mirror image of you. I want what works. Not what Ayn Rand wrote in a novel.

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