Context
Darkens the Upbeat June Jobs Report, 7/8/16
Economy: On its own, the June jobs report was a good one. A big gain
in employment. Hundreds of thousands entering the labor force. And another
month added to the longest string of consecutive private sector job growth. In
the broader context, it's far less reassuring.
Obama's top economist, Jason Furman,
called the 287,000 gain a "clear indication that the economy continues to
make solid progress. U.S. businesses have now added 14.8 million jobs since
private-sector job growth turned positive in early 2010."
Job growth was higher than expected,
and it was widespread, and investors were happy about the news. These are all
good things. Now, how about some context.
First, this big gain came after
May's dismal report, which the BLS revised downward to a mere 11,000 new jobs
-- which effectively means zero.
Job growth continues to lag
population growth. So far this year, for example, the economy has created a
million new jobs. But over these same months, the working age population has
increased by 1.5 million, according to Bureau of Labor Statistics data.
And while 14.8 million private
sector jobs have been created since February 2010 -- as Furman boasts -- the
population grew by 16.4 million.
In other words, the jobs gap has
been widening during the Obama recovery, not shrinking as it does during normal
recoveries.
As we have pointed out in this space
before, had job growth under Obama's recovery been merely as good as the
average recovery since World War II, there would be millions more people
gainfully employed today.
While labor force participation
ticked upward, at 62.7% it is still lower than it's been since the late 1970s,
and well below where it stood when the recession ended in June 2009 -- when
65.7% of the adult population was in the labor force.
Meanwhile, average hourly earnings
climbed at an annual rate of 0.9%, which isn't keeping up with even the current
low rate of inflation.
Real median household income has
dropped so far this year, from $57,601 in January to $56,853 in May, according
to Sentier Research, and
it's below where it was before Obama took office.
And the IBD/TIPP Economic Optimism Index has dropped in each of the past three months, to 45.5 --
any index rating under 50 indicates a pessimistic outlook.
As Obama likes to say, "more
work needs to be done." But what he means by that, unfortunately, is more
of the same policies that have produced the tepid growth and high levels of
anxiety at a time when the economy should have been surging ahead.
If Hillary Clinton gets elected,
that's just what the country will get. More taxes, more regulations, a much
bigger federal government and the same promises that it will all somehow
produce strong economic growth.
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