"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

The Obama Economy: “Dismal Jobs Data,” “The Economy Is Struggling,” “This Is What A Jobless Recovery Looks Like”

June 4th, 2012 by mopns · No Comments

Disappointing reports about the state of the American economy filled the news last Friday:

The AP: “The U.S. economy suddenly looks a lot weaker. U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up. The dismal jobs data will fan fears that the economy is sputtering. . . . The Labor Department also said Friday that the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months.”

The Wall Street Journal adds, “U.S. job growth fell sharply, jolting financial markets and raising new questions about the strength of the nation’s economy. The U.S. added a paltry 69,000 jobs in May, the lowest total in a year. April brought only 77,000 new jobs, far lower than initially reported. The jobless rate climbed for the first time since last summer, to 8.2%. And the manufacturing sector, a previous source of strength, is slowing. The collection of dismal reports comes on top of growing fears about European and Asian economies, and sent stocks sliding Friday morning. . . . ‘The economy is shifting from “muddling through” to paralysis,’ Pierpont Securities economist Stephen Stanley said

Last Friday’s  jobs numbers follow a report in the WSJ Thursday that “[t]he U.S. grew slower during the first quarter than previously thought and continued weakness in the job market and elsewhere suggests the economy is struggling to gain traction. On Thursday, the government said gross domestic product—the broadest measure of all goods and services produced in the economy—grew in the January-to-March period at an annualized 1.9% pace, short of the 2.2% growth previously estimated. This means the economy had less momentum going into the second quarter and comes as fears are growing that a larger global slowdown is under way that could eventually weigh on domestic growth.”

Economists were certainly troubled by the report. Jeffrey Greenberg of Nomura Economics Research told the WSJ, “This is what a jobless recovery looks like. . . . [T]he hiring environment appears to have weakened, and anxiety about the outlook seems to have led many employers to put hiring plans on hold.” Credit Suisse’s Jay Feldman said, “[T]he prior two months were revised down by 49,000 – the first downward revision in 5 months. April itself was lowered to just +77,000 from the previously reported +115,000, making the last two months look awful. The -62,000 private sector revision was the largest in three years.” Peter Newland of Barclays Capital called the news “[a] clearly soft report that suggests a loss of momentum in the labor market recovery across jobs, hours worked and the unemployment rate.” And MSNBC’s Chuck Todd tweeted that even Democrats’ oft-cited economist “Mark Zandi said on @dailyrundown there was little redeeming in this jobs report. All bad news.”

Looking back on 2009, it’s clear that the nearly $1 trillion stimulus bill that President Obama and Democrats jammed through Congress hasn’t lived up to the promises they made when it was passed. The administration’s top economic advisors claimed that unemployment wouldn’t exceed 8% if the stimulus was passed. President Obama claimed, “It’s a plan that will save or create up to 4 million jobs over the next two years.” Senate Majority Leader Harry Reid (D-NV) declared, “This bill creates 3.5 million jobs.” And Vice President Joe Biden boasted that the stimulus “literally drop-kicks us out of this recession” by creating “3.5 million jobs” in “18 months.”

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