As you’ve probably read by now, the latest figures from the Bureau of Labor Statistics show that job growth has all but stalled.
Economists express shock and dismay. But the President and his Republican counterparts in the deficit reduction/debt ceiling talks take it all in stride.
Brief review of what might — but apparently isn’t — shifting their vision from a potential faraway deficit crisis to the crisis we’ve got right now.
Private-sector employers added only 57,000 new jobs last month. The public sector shed another 39,000, leaving total new jobs at only 18,000.
This is a small fraction of what’s needed just to keep up with population growth, let alone make up for the 8.8 million jobs lost since the recession began.
Bad news wasn’t only for June job growth. The BLS report also revised the already-anemic new job figures for May downward by nearly half.
So what many economists thought might be a blip in this year’s growth trend actually heralded what could be something approaching stagnation.
More evidence for this. Average work hours per week dropped a bit, as did average hourly earnings. Employment by temporary help services firms edged downward. These are all, we’re told, indicators that employers, as a whole, aren’t about to start hiring.
The number of unemployed people who were actively looking for work increased to 14.1 million. An additional 982,000 had looked within the last year but given up because they decided that searching was futile.
Nearly 6.3 million of the actively looking had been unemployed for at least 27 weeks — many undoubtedly much longer. This is slightly higher than the figure for May and 450,000 higher than for April.
Some of these long-term jobless people are still getting unemployment benefits, thanks to two related federal programs. One will expire at the end of the year. The other will become irrelevant unless Congress changes the rules.
Workers can qualify only when they’ve exhausted their regular state unemployment benefits. So anyone who loses a job now will get, at most, 26 weeks. As I wrote earlier, some states have cut their programs back to less than that.
So we’ve got an economy that’s growing slowly. Employers who aren’t hiring mainly because they can meet demand with the workers they’ve got.
More than 22.5 million people who are officially unemployed or under-employed, plus about 3.9 million who haven’t looked recently enough to get counted.
About a third of the 22.5 million are getting unemployment benefits, which typically replace only about a third of lost wage income. Well over 2 million can’t get them any more. A large unreported number never could.
We could have scripted the Republicans’ response to all this. House Majority Leader John Boehner says they’re “focused on jobs, and are ready to stop Washington from spending money it doesn’t have.”
Blames stimulus spending, excessive regulations and “an overwhelming national debt” for holding back private-sector job creation.
What about the President?
Well, he’s jawboning Congress to extend the 2% employee payroll tax cut that was part of the December Bush tax cuts deal.
But not to extend the federal add-on to states’ unemployment benefits programs, even though it would deliver a big bang-for-the-buck boost to the economy.
He’s also urging approval of some foreign trade agreements, a streamlined patent process and some unspecified investments to rebuild our infrastructure.
But not any investments to halt the huge job cuts in state and local government programs. Well over half a million since August 2008. And no sign of a letup.
Mostly, however, the President is focusing on a deficit reduction plan that will “get the government living within its means.”
Everything we read tells us it will be mostly — if not exclusively — about spending cuts. It would be more about spending cuts than revenue raisers even if the President got the balance he wants. Not likely.
Bottom line is that we’ve got new evidence of a jobs crisis that’s bigger and more persistent than anyone predicted. Yet the President and the Republican leadership are still focused on a deal that will pull billions more out of the economy.
“Like planning a picnic after Pearl Harbor,” tweets Dean Baker from the Center for Economic and Policy Research.