The jobs numbers are horrible, worse than anyone had thought they’d turn out to be. 18,000 total jobs created, with a decrease of 39,000 government jobs. Let’s get some graphs.
High level (click through for larger image):
This is off household surveys, which is going to be slightly different numbers than the payroll you are seeing for aggregate job creation. The big thing we see is that the labor force shrunk while unemployment increased, a bad sign. Meanwhile, we see a jump in those who are not in the labor force but who want a job – people who have given up actively looking for a job.
To zoom into that, let’s take a look at the arrows leaving the unemployment circle. Here’s a graph of how people are exiting unemployment – are they finding work or simply giving up?
The unemployed continue to be more likely to drop out of the labor force than find a job. As we’ve mentioned before, the idea that people are more likely to drop out of the labor force than find a job is a brand new phenomenon, one that doesn’t exist in the data going back to when data is first collected in the 1960s.
At this point, the conventional unemployment rate numbers are becoming meaningless. The employment-to-population ratio is more important. The employment-to-population ratio dropped 0.2% for men and 0.3% for women. Let’s look at this on a longer time-line:
You have to go back to pre-1988 to find an era when there were a fewer percentage of women working than there are right now.
Meanwhile, how’s the economy working out for those with jobs? Average weekly earnings of all private employees dropped from $791.20 to $788.56. We can’t really have an inflationary spiral based on prices and wages if wages are decreasing. Also without a buildup in wages, it’s harder to argue that we are having a “structural unemployment problem” – those who do have the skills necessary to get a job aren’t turning that into higher wages. And this also means we don’t even have a recovery for those who are not the worse off – as Matt Frost said, “the technical term is a ‘recovery-less recovery.'”
Matt Yglesias shows how the number of government workers have continued to decline under the Obama administration, especially at the state and local level. This has been a pretty clear conservative priority and it’s dragging down the recovery.
There’s no silver lining in today’s job numbers. The discussion immediately needs to shift away from deficit reduction to jobs growth, in terms of public works, tax breaks for workers and getting to the bottom of the foreclosure crisis and shadow housing inventory.
The “discussion needs to shift” to the idea that these numbers are the outcome of deliberate policy choices made by the legacy parties in Versailles, since the numbers are in the interests of those who own the legacy parties. (The “tell” that high unemployment is a deliberate policy choice? There’s an obvious and proven policy option that would solve the human catastrophe and create aggregate demand: A “Jobs Guarantee.” It worked for FDR with the WPA and the CCC, so why isn’t it being considered now? Because both legacy parties, and their leadership, including Obama, are devoted to destroying FDR’s legacy and keeping jobless numbers high, that’s why.)
Therefore, write DISemployement — the jobless workers have been written off and thrown away by the elite deliberately as a matter of conscious calculation — and not UNemployment, as if these numbers were the result of some natural force that nobody can do anything about. High DISemployment means that people with jobs are desperate to keep them, and people without jobs are desperate to get them (except those who’ve gone off the grid entirely). That permits the speedup in the workplace, and keeps wages low when jobs are offered. CEO pay, corporate profits, and wealth disparities are higher than ever, so what’s not to like? Mission accomplished!
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The discussion immediately needs to shift away from deficit reduction to jobs growth, in terms of public works, tax breaks for workers and getting to the bottom of the foreclosure crisis and shadow housing inventory.
After what Sperling said the other day to Chris Hayes, and what Goolsbee said this morning, are you kidding me? They really are trying to crash the economy via stupidity now, where before it was more malice.
It may be time to redefine and economic recovery as a period of time when the economy is actually improving, not the economy isn’t getting worse, which is the current standard.
I am so appalled by the completely uncalled for Obama collapse in face of the Republican attack that I am left nearly speechless. As an 82-year-old lifelong left political activist, I don’t know what to do. The punditry pooh poohs comparisons to Germany in 1933 but events force me to believe what is happening here is comparable to the accession to power of the Nazis!
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The discussion immediately needs to shift away from deficit reduction to jobs growth….
Great. But discussions don’t just shift themselves. They are carried on by people with mouths and keyboards who decide what to talk about. And the most important talkers in the current context are the ones with the primary responsibility for public policy: the political talkers in Washington.
And so here’s the question for you: Given that the White House, Pete Peterson, House and Senate Republicans, Obama’s own Bowles-Simpson commission and a host of high-profile major media pundits and economic policy poobahs have spent more than a year talking about federal debt and deficits, and insisting that the budget is the key problem facing the economy – despite the fact that unemployment was already astronomically high when that discussion began, and despite the fact that there has been no shortage of people telling them that their priorities were all wrong – how does Obama now say “never mind” pivot back to the real world without looking like a total putz?
He already looks like a total putz.
Talking about jobs would improve his image.
Doing something about it, more so.
Otherwise: total Potentate of the Potomac Putz
Exactly. This isn’t your normal “for it before he was against it” situation — it’s not as though reality has been any constraint on the GOP the last several years, and at any rate good luck turning, “The President used to think giving you a job was a bad idea. Now that you have one, I bet you’re totally pissed he changed his mind!” into an effective attack ad.
Just an alert that the scaling on the x-axis in the first graph of unemployment out-flow might be wrong (the curves cross at 2004). It looks different than the similar graph in the older post https://rortybomb.files.wordpress.com/2010/09/out_of_unemployment.jpg (curves cross at 2009).
Thanks! And great catch, x-axis started at wrong place in timeline in excel sheet. Fixed above.
“How does Obama now say “never mind” pivot back to the real world without looking like a total putz?”
He can’t, so he won’t. Besides, he believes what he’s doing is right. So he’s going to double down. That’s why he needs to be primaried (at least if you’re a centrist, which I am not).
I’m not sure why Obama can’t pivot back. The republicans just spent an election cycle screaming about how Obamacare gutted Medicare in order to scare seniors into turning out. Now their #1 priority seems to be gutting Medicare and Social Security. If they can do that sort of about face, I don’t see why the dems can’t do a similar one on j0bs. Except that there will be conservative dems that undermine the message by talking about the deficit, and how we can’t afford any new spending programs right now. Mostly I think Obama doesn’t want to waste time pushing for something the Republicans will never let happen – i.e. another round of stimulus spending.
Obama can’t “pivot” because he doesn’t want>/i> to what pivoting would put him in position to do.
Obama is a conservative; he honors St. Ronnie and is trying to bring off what St. Ronnie would not do: Bring down the New Deal and the Great Society programs of the giants of the Democratic Party.
Which suggests rather strongly that he is not a Democrat in anything other than name. Oh, and lots of voters think he looks like a Democrat.
The Dems were bamboozled by this buy, and we citizens were robbed of the opportunities to begin reining in the power of the Too Big To Faile banksters. And now we are screwed.
Proofreading is a good thing. Sorry about the messed up post.
The average weekly earnings declined, but given our two speed economy of the wealthy and the rest of us, it would be more meaningful to see the median salary. I am guessing the declines are more dramatic. Increases by the top are masking larger declines by those further down the wage scale.
So far all the attention seems to be on the payroll numbers. Other than Spencer at Angry Bear I haven’t noticed a single blogger mention the fact that household employment dropped by 445,000 jobs last month.
What even Spencer failed to mention was that this is the largest drop in household employment in 18 months.
Several bloggers have mentioned the fact that the employment to population ratio dropped. What they have all failed to notice is that it dropped to 58.18%. This is the lowest rate so far this recession and is in fact the lowest rate since July of 1983 (58.06%), nearly 28 years ago.
And yet the plug has been pulled on QE, Obama still has two out of seven seats on the BOG vacant, fiscal stimulus is being rapidly withdrawn and the Republican controlled House and the President are cutting a deal for contractionary fiscal policy.
Historically the household survey leads the payroll survey. Anyone who thinks the second half of the year is going to be better than first is not thinking clearly.
Isn’t there a bit of a silver lining in the seasonal adjustments? I think you have warned on this blog of the danger of relying on a single month’s data when looking at a smoothed time series!
The seasonal adjustment corrects for (historically) large numbers of temporary workers entering the labor force at the beginning of the summer. If you compare the raw data series to the adjusted numbers, June has been revised down from 376,000 new jobs to 18,000. (Conversely, payrolls typically decrease in January when temporary Christmas holiday workers leave the labor force, so the seasonal adjustment increases payroll numbers in January.)
It’s been widely reported that one effect of the Great Recession is that overqualified, older workers have to some extent displaced traditional “summer jobs”. So it might be reasonable to think that the seasonal adjustment should be smaller than it has been historically.
If you look at the annual growth rate by comparing months year-on-year, i.e. June 2011 payrolls compared with June 2010 payrolls, the economy is currently growing at a 0.8% annual rate. Hardly cause for celebration, but the trajectory of this measure has been consistently improving since August 2009 (with a slight dip in May). June data was moving in the right direction
“You have to go back to pre-1988 to find an era when there were a fewer percentage of women working than there are right now.”
How the hell is this a problem?
Well, sure. The head of the household, who is male, should be the one with the independent income. Every cloud has a silver lining!
It’s a huge problem, maybe an existential problem, for women who are the single earners in their household.
It’s a problem for women who want to work, even if there is still one earner in their household. More so if they need to work to keep the two earner household afloat.
Uh, was your question a bit of sarcasm — and I missed it?
I’ve yet to see a graph timeline tracking the stimulus and unemployment or employment. May show it beginning to work until the plug was pulled. Surprise! the government can/did create jobs and improve infrastructure all while tax revenues increase. Or, we could just let the hoarders hoard more and force austerity on the middle and lower class. And, when can the Dems have a set rebut when the repugs endlessly claim it’s what the people want??
“The discussion immediately needs to shift away from deficit reduction to jobs growth, in terms of public works, tax breaks for workers and getting to the bottom of the foreclosure crisis and shadow housing inventory.”
What’s totally sick is that everyone who isn’t a Tea Party nut or one of their Republican bagmen has been saying something like this for the last year or two. And on public works and human capital investment Obama is in agreement (if we can believe his SOTU speech). But for some reason he isn’t willing to push for it. If George W. were pres. he’d be pointing out Democratic opposition 12 times a day, blaming Dems for unemployment, the deficit, cloudy days and your mom’s cancer and putting pictures of Congressional Dems on TV next to pictures of bin Laden and saying “together these two want to make sure you never get a job again.” Ok, so bin Laden’s no longer an option and that was a little too dirty a tactic for anyone besides Karl Rove. Obama’s not that guy. I get it. But “the opposition is being mean to me” is not an excuse the American people can, will, or should accept from their president. “You know, I wanted to meet the greatest challenge America has faced in generations but the Republicans are just so mean. Oh well.” NOT a winner folks, not politically and not for the millions of unemployed.
Cutting a deal that caters to all the ignorance scholars have worked decades to kill and bury makes it even worse. On the fiscal side we could be looking at 1937 all over again. Thankfully, it seems, on the monetary side things are different. Anyone catch that the QE is continuing, albeit more modestly? http://www.npr.org/blogs/money/2011/06/27/137444829/qe-2-1-the-fed-will-buy-25-billion-in-bonds-every-month-until-further-notice
Not much press coverage on this which is probably good considering the rampant goldbuggery we’re dealing with.
“for some reason he isn’t willing to push for it”
Obama doesn’t “push for it” because he doesn’t believe it. The reason we get conservative outcomes from Obama is that he’s a conservative.
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