After a brief blip of optimism in December, we’ve now had two depressing jobs reports in a row, leading to questions of whether a recovery has taken hold. Nelson Schwartz reports for the New York Times:
Employers added jobs at a slower-than-expected pace in January, the second month in a row that hiring has been disappointing and a sign that the labor market remains anemic despite indications of growth elsewhere in the economy.
Payrolls increased by 113,000, the Labor Department reported Friday morning, well below the gain of 180,000 that economists expected. The unemployment rate, based on a separate survey of households that was more encouraging, actually fell by a tenth of a percentage point, to 6.6 percent.
The data for January come after an even more disappointing report on the labor market for December, which was revised upward only slightly Friday, to show a gain of just 75,000 jobs, from 74,000. The level of hiring in January was also substantially below the average monthly gain of 178,000 positions over the last six months, as well as the monthly addition of 187,000 over the last year.
Nevertheless, there are a few positive trends to be found. The unemployment rate, which is a generally useless number given that it doesn’t take into account the number of people who have left the labor force, ticked down to 6.6 percent. The number of long-term jobless, which have remained stubbornly high, fell by more than 200,000 workers. And the workforce participation rate, which has plummeted in recent months, bounced back modestly to 63 percent – which is still tied for the fifth-lowest months since the 1970s.
But the bad news outweighed the good, especially when you take the larger economic picture into account. Earlier this week investors were rocked by a deeply-negative survey of the manufacturing industry which found that the forward-looking new orders index plummeted by 13.2 points – the fastest drop in 33 years. Similarly bad reports came from automakers, who reported that their sales slipped 3 percent in January, and realtors, who said that home sales fell sharply. Homes and cars are two of the larger investments consumers can make and weakness in those markets may signal that consumers are still holding back.
“There’s no question that some of the economic data we’ve seen recently just hasn’t been as strong as hoped for,” Tim Ghriskey, the chief investment officer at the Solaris Group, told the New York Times. “Perhaps expectations of economic improvement got ahead of themselves.”
But is it too much to ask for improvement? After all, the president has been in office for more than a full-term and yet we’ve seen one of the slowest economic recoveries on record. That should lead Americans to ask some tough questions of the White House.
“The American people continue to ask ‘where are the jobs?’, and the president clearly has no answers. Republicans do,” House Speaker John Boehner said in a statement. “The House has passed dozens of initiatives that will help create jobs and expand opportunity. We are ready to improve job training, expand markets for American exports, approve the Keystone pipeline, and much more. The president and his party’s leaders, however, are standing in the way.”
Following President Obama’s recent State of the Union, House Republican leaders once again reached out to the White House in an attempt to get a jobs conversation started. In a letter addressed to the president, Republicans pointed out four specific areas – job training programs, natural gas expansion, workplace rules, and reforms to federally-funded research – that were discussed in the State of the Union and could be common ground to kick-start a growth agenda.
Sadly, I doubt that’s going anywhere. More sadly, I doubt the poor economy is going anywhere either.