Not As Many Jobs As We Needed
According the latest government numbers, the economy added 431,000 jobs in May. It’s the biggest single month increase in employment in a decade and the fifth month in a row that the economy has added jobs. But it’s still disappointing.
As I wrote yesterday, Americans have been out of work too long. With some employers now refusing to even consider hiring anyone who is already out of work, it’s going to be hard for many to get out of unemployment. On the surface, the recent job report seems like good news. But the numbers are inflated by temporary hiring for the national census. And those jobs will go away when the summer is over and the census is finished. In fact, the economy added more than 100,000 jobs less than many analysts had expected. The private sector added just 41,000 jobs. That’s less than it had in previous months, and a sign that job creation may be slowing. Much of those private sector jobs were actually temporary jobs, suggesting that the companies are not yet willing to hire people to long-term positions. With 15 million people are out of work—and 100,000 new people joining the work force every month—the economy is going to have to add jobs much faster than it has been to make a dent in unemployment.
The markets dropped several percent on the news. It’s true, as Obama made sure to point out, that you can’t read too much into one job report. And the crucial manufacturing sector does finally seem to be hiring again. But the average length of time Americans have been unemployed continues to grow, up to more than 34 weeks. That’s not only hard on the unemployed themselves. It also depresses consumer spending, which accounts for 70% of the economy. That’s why, without federal stimulus money and incredibly low interest rates—both of which won’t last much longer—Robert Reich worries that if the government doesn’t do more to create jobs the economy may shrink again. Bill Dunkelberg, chief economist for the National Federation of Independant Business, told The New York Times he didn’t think we were in for a double-dip recession, but said the recovery would nevertheless be “grimly slow.”