The Bureau of Labor Statistics reported this morning that the economy added just 80k jobs in June. The economy needs to add around 150k jobs a month just to keep up with population growth. The big miss confirms that whatever economic recovery existed is gone and the economy remains stuck in a dangerous stall.
Economists had been predicting a net gain of around 100k jobs. Payroll giant ADP yesterday suggested June job growth might even come in around 176k, blowing past expectations. For a while yesterday, the media and Wall Street wondered if today’s report would surprise with a strong jobs number. Alas, as with most jobs reports in recent months, it wasn’t to be. After three and a half years, one would think economists would be weary of always being surprised by “unexpected” bad economic news.
These numbers will be very hard for Obama and the Democrats to spin. BLS revised May’s jobs’ numbers up from 69k to 77k, taking away the spin that today’s report was at least an improvement over May. BLS also revised April’s numbers down, from 77K to 68K, meaning the the fall-off after the 1st Quarter was much steeper than originally thought.
Virtually ever other measurement in today’s report; unemployment rate, number of unemployed, labor participation rate and hiring levels in most industry sectors were unchanged from May. Its an across the board stall.
One of the rare bright spots in recent months has been manufacturing, which added 11k jobs in June. In the past few weeks, however, we’ve seen numerous reports indicating a sharp slowdown in manufacturing. That trend will be a significant drag on future hiring in the sector. That isn’t the only ominous sign, though.
Business and Professional Services added 47k jobs in June, accounting for almost 6 out of 10 new jobs. But, according to BLS, over half of these jobs, 25k, are temporary and not permanent hires.
A net gain of 80k jobs is bad enough. That almost a third of these are temporary shows just how bad the job market is. There is no real boost to wages or consumer spending on the horizon. Without these, in the present fiscal and regulatory climate, it is hard to see how we get an increase in business hiring for workers.
Campaigns may run on cheap slogans and happy talk, but businesses don’t. This November, something will have to give.
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