About the least alarmist thing that can be said about today’s unemployment report is that it’s another sign of how we’re not in a typical post-World War II business cycle. Employment is coming back very slowly, with extremely weak hiring in the private sector. But even this isn’t completely new. Largely because of globalization, other recent recoveries have been slow and, early on, “jobless.” Only 1 million net new jobs were created in the ’00s before the financial collapse.
That event created an enormous gap, not only with 16-17 percent “real” unemployment and long-term unemployment at record levels. According to the Economic Policy Institute, the fastest year of jobs growth in the ’90s boom was 2.6 percent in 1998. If today’s economy somehow reaches that velocity from this point on, America wouldn’t recover pre-recession employment levels until January 2015. As it is, the latest jobs report showed 95 percent of new hires were for temporary Census jobs that will go away in a few months.
“Given this uninspiring employment picture, the economic case for substantial additional government action to aid the long-term unemployed and to generate jobs remains overwhelming,” EPI economist Heidi Shierholz said. No doubt; indeed, many economists warned that the Obama stimulus was too small. But now deficit worry — both misplaced and real — makes more federal spending difficult. Even maintaining jobless benefits is now a battle royal.
A more optimistic note was struck by Aaron Smith of Moody’s Economy.com: “While some issues remain, such as the ongoing financial market turbulence, the weight of evidence indicates that private job gains will strengthen and sustain the overall recovery.” The work week increased, continuing a three-month series of gains in the number of hours worked.
That turbulence is no small matter. Today the market is being battered: Not so much about traders’ concerns about the future of the American middle class, but about further contagion in the Eurozone.
Today’s Econ Haiku:
NOAA’s fleet slips out
Trawls for our assets