President Obama’s disastrous handling of the conflict in Syria has drawn nearly universal scorn and derision. But if his advisers are looking for even the thinnest of silver linings, at least it has drawn attention away from yet another disastrous jobs report.
The report, which is almost always the focus of at least one media cycle on the first Friday of every month, received none of its usual scrutiny this month. But with all eyes on the president and all ears tuned for conflict, nary a word was spoken about one of the most important issues to Americans: jobs.
The lack of attention is not exactly a surprise. At the end of the day the jobs figures can be summed up as “more of the same” – not exactly the kind of sexy storyline that puts eyes on TV screens. But nevertheless, the complete and utter economic stagnation following the recession is an important story that shouldn’t be ignored.
So just how bad was this jobs report? In a word, bad. Neil Irwin writes for the Washington Post:
Yes, the unemployment rate fell a notch to 7.3 percent, from 7.4 percent in July. Yes, the nation added 169,000 jobs, broadly consistent with the pattern of recent months.
But in almost all the particulars, you can find signs that this job market is weaker than it appeared just a few months ago, and maybe getting worse. The drop in the unemployment rate was caused by 312,000 people dropping out of the labor force. The number of people actually reporting having a job actually fell by 115,000 in the survey on which the unemployment rate is based.
And while the overall August jobs number was okay, the Labor Department revised down its estimates of June and July job creation by a combined 74,000 positions. In other words, through the summer, hiring has been quite a bit shakier than it had appeared.
The report is indicative of a decelerating recovery, not exactly what you want when you’re still trying to climb out of the worst recession since the Great Depression. Including August, the economy has only created an average of 148,000 new jobs over the last three months, down significantly from the 184,000 jobs per month that were created on average in 2012.
And while any decrease in the unemployment rate sounds like a positive, it’s not, especially when the decline is solely driven by 312,000 people dropping out of the labor force. That pushed the labor force participation rate to 63.2 percent – its lowest point in 35 years.
Even the wonkier data looks bad. Consumer spending, new home sales, home building, durable goods orders and industrial production all weakened in July, portending that next month likely won’t be gangbusters for hiring either.
“Given the data we have gotten so far, the third quarter is looking like it’s going to be on the soft side,” Michael Hanson, a senior economist at Bank of America told Reuters. “The economy, I don’t think, has the momentum that many people, probably a number of Fed officials, were hoping for.”
Other economists aren’t so convinced that the problem may be limited to a financial quarter.
“We’ve got a generational shift going on here. It’s going to be persistent,” Sue Marks, founder and CEO of global recruiting firm Pinstripe told CNBC. “It’s a systemic problem and a systemic situation that’s going to require some new thinking.”
With Democrats at the helm, whose only idea is to recycle more tax dollars through the economy by means of poorly directed “stimulus,” new thinking may be hard to come by in Washington.