The now-monthly masochistic ritual of hitting refresh on our favorite news site as we anxiously await the release of the official jobs report has now concluded. The results, as with most months in the past few years, are in a word – disappointing.
According to the Labor Department, the economy added 162,000 jobs in July, far fewer than the 185,000 jobs that many economists predicted. The increase represented the smallest increase in four months and when coupled with downward revisions of 26,000 jobs in the prior two months, signals economic turbulence ahead. But perhaps the most troubling data point was a decline in hourly earnings and a shortening of the average workweek, both of which mean less money in consumers’ pockets.
Many Obama-backers will point to the small decline in the unemployment rate, from 7.6 to 7.4 percent, as a silver lining that shows the president’s policies have not been a complete waste. But the unemployment rate is an incomplete measure because it only counts people who are actively looking for work. Unfortunately, the Obama economy has been so terrible that many people have simply given up looking, either because they’ve opted to retire early, become discouraged at their prospects, or opted for a meager life on the government dole.
When you strip away the statistical noise and focus on what really matters – the labor participation rate, the economic problems become much clearer. If the participation rate – which measures the ratio of employment to working-age adults – remained at its pre-recession peak, the unemployment rate would be 10.7 percent.
As liberal blogger Ezra Klein writes, this “will lead directly to the most uncomfortable question of the recovery: Has there even been an economic recovery.”
“The implication of these numbers is that the recovery is a mirage. The official unemployment rate only counts people actively looking for work,” Klein continues. “It’s dropped less because people have found work than because they’ve stopped looking. Ergo, there’s been no recovery – just a hardening of the post-recession labor market.”
Contrast that stinging critique from one of the shining lights of the liberal movement against President Obama’s own words earlier this week.
“Together, we’ve righted the ship,” Obama told the crowd in Chattanooga. “Today, our businesses have created 7.2 million new jobs over the last 40 months. This year, we’re off to our best private-sector jobs growth since 1999.”
Of course, President Obama purposely neglected to mention some very important context. Like the fact that most of those jobs are part-time, without benefits and retirement, and that, while 7.2 million sounds like a huge number, it isn’t even enough to keep up with normal population growth.
And things aren’t looking much better in the economic growth figures either. The Commerce Department reported Wednesday that the U.S. gross domestic product rose at a 1.7 percent annual rate last quarter. And while that is a significant improvement, it came at the expense of a downward revision from the first quarter, which took a plunge from 1.8 to 1.1 percent.
The Washington Post’s Neil Erwin was not impressed with the numbers:
But 1.7 percent growth isn’t good in the environment we’re in, even if it is a little better than economists thought the number would be. It isn’t even mediocre. It’s terrible. It’s a sign of the diminished economic expectations that economy-watchers have set for themselves that it’s anything to crow about at all.
But then again economy-watchers and the public in general can be forgiven if their expectations have been permanently set to “low.” We look on each month as the jobs reports are consistently labeled “disappointing” and “unexpected,” but we know otherwise. This is the new normal. This is Obama’s economy.