Skip to comments.The Stall Has Arrived (Even leftists are admitting it)
Posted on 05/05/2012 11:14:10 AM PDT by Signalman
The economy has stalled.
Fridays jobs report for April was even more disappointing than March. Employers added only 115,000 new jobs, down from Marchs number (the Bureau of Labor Statistics revised the March number upward to 154,000, but thats still abysmal relative to whats needed). We need well over 250,000 new jobs per month in order to begin to whittle down the vast number of jobs lost in the Great Recession. At least 125,000 new jobs are necessary each month just to keep up with an expanding population of working-age people.
With only 115,000 jobs in April, the hole is getting even deeper.
Most observers pay attention to the official rate of unemployment, which edged down to 8.1 percent in April from 8.2 percent in March. That may sound like progress, but its not. The unemployment rate dropped because more people dropped out of the labor force, too discouraged to look for work. The household survey, from which the rate is calculated, counts as unemployed only people who are actively looking for work. If you stop looking because the job scene looks hopeless for you, youre no longer counted.
In the winter months December, January, and February hiring had seemed to pick up, averaging over 250,000 new jobs per month. Then the mini-surge stopped. The simplest explanation is that the mild winter across much of the United States gave an unusual boost to hiring then, leading to a correction by the spring.
Most of the job gains in April were in lower-wage industries retail stores, restaurants, and temporary-help. That means average wages continue to drop, adjusted for inflation continuing their long-term decline. Most of the new jobs that have been added to the U.S. economy during this recovery have paid less than the jobs that were lost during the downturn.
What does all this mean? Together with other recent data showing slower economic growth during the first quarter of this year, its safe to say the economy has stalled.
This is bad news for millions of Americans.
Its also bad news for Obama and the Democrats. Voters dont pay much attention to the economy in an election year until after Labor Day, so its not necessarily a huge help to Romney and the Republicans. But its a bad political omen nonetheless.
No set of policies between now and Election Day are likely to expand the economy. To the contrary, government at all levels continues to contract, acting as a fiscal drag when government needs to be doing the exact reverse boosting the economy through additional spending. In 2013, when spending major cuts are scheduled, well fall off a fiscal cliff.
Obama needs to push back loudly and clearly, saying he wont support additional spending cuts until the economy is showing clear signs of improvement.
But widening inequality is the underlying culprit here. As long as almost all the gains from economic growth continue to go to the top, the vast middle class doesnt have the purchasing power to boost the economy on its own. And rich Americans spend a much smaller portion of their incomes than does the vast middle class. Their marginal satisfaction from additional spending falls off. The second yacht isnt nearly as much fun as the first.
Get it? Weve still got a terrible cyclical problem we cant get out of the gravitational pull of the Great Recession.
Yet the underlying problem is structural, and its been growing for decades. The structural problem of stagnant or declining real incomes for most people, and soaring income and wealth at the top, was masked during the boom years when the middle class could turn their homes into piggy banks and extract home-equity loans or refinance. But the mask came off in 2008 as home values plummeted.
Theres no way to put the mask back on. Weve got to face the truth. Obama and the Democrats have to explain to the American people why inequality isnt just unfair; its also economically unsustainable.
Double down on that insanity, Robert. You Marxists can drive us over the cliff even before Labor Day if you just push a little more.
If I was an organ grinder my monkey would look like Robert Reich.
Terms not seen in the media since Jan 09:
recovery for Wall $treet but not Main Street
The economy and unemployment is being hammered MOSTLY by high fuel prices, onerous Demcratic/Obama regulation, Obama’s business crucifixtion mob, the potential for the Bush tax cuts to expire again, general Democrat/Obama meddling and tinkering in the market place, and the looming possibility of Obamacare surviving. Fix those things and our economy would be on fire in months.
You mean the trillion dollar stimulus and Obamacare went to only the TOP? You Mean All those Shovel ready jobs went to Millionaires and Billionaires? No wonder I didnt get one of those Jobs.
I think the Insurance companies made a Mistake they Sent the renewal for my Healthcare and it went up 2500 dollars! I am going to send a Copy to Obama so he can take care of that error,Im Sure they meant it is a 2500 dollar Decrease.
Why cant these people report the truth that Obama says instead of all these lies,the Press sucks
Good picture; it accurately sums up what taxation has become.
I have been saying since 2008 that the depression would doom Obama to being a one-term wonder, with the economy still way down in November 2012. It didn’t take a genius to see this coming 3 years ago.
3. The debt overhang must be reduced to a manageable level through ongoing deleveraging. Nothing will solve that but a decade or two of time.
Can you find statistics on employment for those over 55? If their employment participation is not dropping then they are not retiring and the losses have to be coming from lost jobs, not retirements.
I agree. The reason Obama is a one-term wonder is because of people’s seat of the pants experience with unemployment and inflation. They don’t care about published economic numbers. All they know is that their 25 year old kid lives at home, the wife lost her mortgage title job and can’t find anything close in pay, and they just got a pink slip. Meanwhile food and gas are up in cost.
Seat of the pants economics will cause the independents to dump Obama this coming election. I won’t call it a landslide, but people are going to vote their pocket books like usual, and Obama will lose by a goodly margin, in the same was as a failing football quarterback hears the crowd screaming for the 2nd string backup. The crowd doesn’t want to hear that the backup QB may suck, they just want a change to anybody else.
This election will be “anybody but Obama”. He’s done.
Sure, Bob, sure. It seems clear to me that 0bama should raise taxes on the middle class. After all, he's stood tall on spending cuts in every budget the country has had over the last three years. Which would be none.
Good idea. I'll see if the numbers are broken out that way anywhere.
Good luck. I find that no factual argument, no matter how clearly documented, ever convinces a liberal. They are straight emotion and you have to make them “feel” your argument, not gleen your analysis. At least that has been my experience.
I have never one single time every laid out a well-supported argument to a liberal and had one say “OK, I can see that now.” Never. The only few times I have ever won arguments with liberals, it has been appealing strictly to their knee-jerk bleeding-heart emotions.
So good luck to you.
“Theyre going to be crowing about the 7.something% unemployment rate... and lots of people arent going to believe him, because theyll be looking around their families, neighborhoods, etc and saying Barry, youre simply full of crap. Ive lived through 7% unemployment before... and this aint it.
You’re right; I believe he will lose the election primarily based on the employment situation, and his discredited media won’t be able to do a thing to help him.
“All they know is that their 25 year old kid lives at home, the wife lost her mortgage title job and cant find anything close in pay, and they just got a pink slip. Meanwhile food and gas are up in cost.”
From your lips to God’s ears; think of all of the people impacted by this that have a lot of motivation to vote him out (and his media can’t convince them otherwise). He will win 25% of the vote, but for politically correct reasons 100% of Americans will have to pretend they voted for our affirmative action token...
“Can you find statistics on employment for those over 55?”
I think this group is in the worst shape; they had “before-times” salaries for their “before-times” standard of living (which included such things as families, homes, cars, etc.), and have been targeted by companies because of their salaries/benefits. I don’t believe that their skills are obsolete, simply because some are finding similar work at “adjusted-down” salaries; today’s younger people are watching the devastation of this group (often their parents’ generation) and those that are able to consider such things economically are swearing off families and homes.
It is a massive wealth re-distribution scheme with frightening consequences.
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