The latest jobs report is a total disaster. We got 69,000 new jobs in May which is well below already tepid expectations and is below the labor force trend growth rate. Terrible.
But it gets worse!
“The change in total nonfarm payroll employment for March was revised from +154,000 to +143,000, and the change for April was revised from +115,000 to +77,000.” In other words, we gained 69,000 new jobs in May (estimated) but lost 49,000 in revisions. That leaves us with a net increase in employment of just 20,000. Disaster disaster disaster.
A lot of this is already getting fed through an election-year-politics lens, but it's important to remember that this is first and foremost a human tragedy for unemployed and underemployed people, and for employed workers who've been stripped of bargaining power due to persistent labor market weakness. If growth stays dismal and Barack Obama loses the election, he and Michelle and Jack Lew and Tim Geithner and all the rest will go on to have happy, healthy, prosperous lives. Other people's careers are much more in the balance. And the responsibility for addressing this crisis lies first and foremost with the Federal Reserve Board of Governors, the one institution in the U.S. government specifically charged with focusing on macroeconomic stabilization. For months now they've been dawdling instead of rolling up their sleeves and thinking as hard as they can about what to do to increase demand and employment.
There's obviously a political aspect to this. But the part I bolded is what struck me and part of the reason I've been a bit on the gloomy side lately. Like a lot of people, I'm beyond frustrated with the job market and how it pertains to my career and life in general. It's been two years since I got my masters degree and I've yet to find a job relative to my career. The best I've found is a job waiting tables (The best relative to my career is an internship, which is kind of a bullshit concept, but a topic for another post). I'm not sure how less educated people are doing it. And unlike myself, many people don't have the family to fall back on for financial support. They are the people Matt is talking about. And very little is being done to help them. Beyond my own frustration, it's a really sad state of affairs.
This isn't a case where people all of the sudden aren't able to perform jobs. The workforce didn't all of the sudden become unqualified for a massive amount of jobs. New graduates didn't all of the sudden become incapable of learning jobs. People also didn't all of the sudden become lazy, or more lazy, entitled, selfish, etc. The failure isn't on the people who can't find jobs. And they can't really do anything to solve the problem. That's the part that makes me angry.
As a country, we were failed massively by the financial industry and the gov't that was supposed to regulate it. The financial industry has likely not learned anything. And the gov't didn't do enough to respond to the failure or to prevent it from happening again. The one thing the people can do about the situation is pressure their representatives to change things. Until that happens we will continue to get terrible growth rates and suffer while those in charge do nothing.
Update: I've got to add this. After I published this post I clicked on Jonathan Berstein's blog and found his catch of the day from Paul Krugman which perfectly captured the spirit of my frustration with the people in charge of the economy and how they fucked everything up. I'm quoting basically all of it because it's fairly short:
Here's what Greenspan is worrying about these days:
The former central bank leader — nicknamed "The Maestro" by his supporters — said he worries the current economy could be heading on a path similar to 1979, when the 10-year Treasury note was yielding around 9 percent before surging dramatically, gaining 4 percentage points in just a few months.
Greenspan said (video at link) that he "remembers vividly" that in 1979 no one believed that interest rates could go higher "basically because the United States is not an inflation-prone economy." And then there was more inflation and interest rates did go higher! Well then. Never mind that inflation in 1979 was a decade-long problem and the (I guess unexpected; I suppose I'll trust Greenspan on that) spike in 1979 had nothing to do with federal budget deficits. Doesn't matter: it's always 1979! The real problem here is that it's entirely unclear why a missed spike in inflation is any more damaging than any other economic policy mistake. Especially now. Given that conditions now don't look anything at all like what was going on in 1979.
[J]ust look at the man who insisted that credit default swaps had made the financial system stable, that there was no housing bubble, that the housing market was poised for recovery in 2006, telling us that with interest rates at their lowest levels ever, what we need to worry about most is … the threat of rising interest rates.
And: nice catch!
Unfuckingbelievable. As Matt said as well, interest rates are very low right now. And this guy is invoking a time in which interest rates were nearly 10 times the rate they are now. Krugman's speechlessness is the most appropriate reaction.
Jonathan hits on something interesting with his "It's always 1979" line. I'm not sure if he meant it broadly or just in economic terms, but I think it applies broadly to Republicans. They are completely stuck in the mindset of what things were like in 1979. I'll probably post more about this later. But "It's always 1979" is my new tagline for Republicans. So nice catch for Jonathan as well as Krugman.