The Bureau of Labor Statistics released June's jobs report Friday morning, and the numbers were not encouraging: the U.S. economy added only 80,000 jobs last month, below what analysts had projected, and not enough to keep pace with population growth. June is now the third straight month of anemic job growth, following a winter that saw inflated hiring.
The unemployment rate remained at 8.2%, the same as May and up one notch from April's 8.1%. The labor force participation rate stayed the same, after some mildly encouraging numbers last month that suggested more people were joining the labor force (which probably what kicked the rate up to 8.2%). The U6 rate, the real-world measure of unemployment, rose one-tenth of a percentile, to 14.9%.
The question now is whether the Fed will get moving, as everybody and their mom knows that no action is forthcoming from Congress. Ezra Klein hears murmuring that this will finally kick the Fed into gear, but Mark Thoma is skeptical:
If the report had been stronger, policymakers at the Fed would have likely started thinking about whether and when to break the commitment to keep interest rates low through the end of 2013. It would take several months of strong employment growth before they would seriously entertain doing this, but it would certainly be on their minds. Had the report been weaker, the members of the Fed who want more aggressive action would have had a stronger hand, and there is a good chance that some type of easing would come in the near future. But as it stands, with the employment situation essentially unchanged from last month, the Fed is likely to remain in "wait and see" mode, particularly since the data are only preliminary and subject to large revisions down the road
You don't need a PoliticOlogist to tell you the political ramifications of this, but I gotta beagle to feed, so here goes: This is clearly a win for Romney, and he badly needed one to give him a break from the developing narrative that he was exactly the void everybody thought him to be. Romney can hardly do a happy dance over weak job numbers, but he can cut more ads entitled "Despair" and hope to weigh down excitement over Obama.
Or he could just let the economy do that for him. The Fix points out that trend lines matter in elections—it's not just the unemployment rate, but the unemployment rate in relation to what came before it. We've been at the low end of the eighth percentile for long enough that stagnation doesn't feel like an improvement over the massive unemployment of early 2009—it feels like stagnation.
| Related: Hey, Didn't Obama Propose A Jobs Act, And Didn't The GOP Block It Like A Brick Wall? |
Of course, had Congress enacted the American Jobs Act (or any jobs act), we wouldn't be here. Quoting myself:
The $447 billion bill would have cut the payroll tax, funded additional infrastructure projects, and provided funding for public sector jobs like teachers and firefighters. All told, independent economists predicted it would have added anywhere from 1.3 million to 2 million jobs.
Add in those 1.3 million jobs, and the unemployment rate drops to 7.3%.
Instead, we have stagnant growth and an indifferent Fed. The real-world ramifications of all those ideological battles of the past two years are showing through in terms of long term unemployment, which drags down the economy as a whole. As Thoma puts it, "It doesn't have to be like this."
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