The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Recovery Summer: U.S. Now Losing Jobs

Posted on | August 6, 2010 | 5 Comments

The New York Times writes a confusing lede, but ultimately can’t hide the bad news:

With the American economic recovery hanging in the balance, private employers added 71,000 jobs in July, up from a downwardly revised 31,000 in June but below the consensus forecast of 90,000. The unemployment rate stayed steady at 9.5 percent.
Over all, the nation lost 131,000 jobs last month, but those losses came as 143,000 Census Bureau workers left their temporary posts, the Labor Department said. June’s number was revised dramatically downward to a total loss of 221,000 jobs. The agency originally reported that the nation lost 125,000 jobs in June.
Figures released last week confirmed that the United States economy slowed in the spring, and the Department of Labor’s monthly statistical snapshot of hiring pointed toward a stall in hiring this summer, as employers failed to add jobs at the rate they were earlier this year.

As of this writing, a few minutes before the opening bell, Dow Jones Industrial Average futures are trading -80.

UPDATE: A better lede from Reuters:

Employment fell for a second straight month in July as more temporary census jobs ended while private hiring rose less than expected, pointing to an anemic economic recovery.

As of 9:50 a.m. ET, DJIA was sagging down 40 points, and I should point out the possibility that it may actually post a net gain today. I credit Rush Limbaugh with having been the first person I heard explain this: Wall Street values stocks on the basis of companies’ potential for profit. Rising unemployment is bad news for Main Street, but the fact that companies are laying off workers can be good news on Wall Street, if lower payrolls mean higher profits.

An ill omen? Christine Romer, one of the more sober and honest economists in the administration, is resigning as chairwoman of the White House Council of Economic Advisers. “Spend more time with her family,” yada, yada — there’s got to be more to it than that, of course. I predict she’ll soon produce a book, Coked-Up Stimulus Monkeys: How the Obama Administration Is Fiscally Raping Your Grandchildren.

Another omen of looming fiscal disaster:

The government has apparently decided, in its infinite wisdom, that what the American economy really needs is more homebuyers with no equity.

Megan McArdle explains why that’s a bad idea, if you don’t already understand.

UPDATE II: Closing in on 11 a.m. ET now, with the Dow down about 140. So far it doesn’t look like “Black Friday.” Meanwhile, Republicans are getting in their licks:

“Today’s disappointing jobs report falls short of where we need to be,” said House Minority Whip Eric Cantor, in a statement put out less than seven minutes after the Labor Department released the jobs report. “The policies originating from this White House are creating an environment of uncertainty and fear for business people and employees, preventing investment and hiring.” . . .
“How many more times do families and small businesses have to ask ‘where are the jobs’ before President Obama changes course?” House Minority Leader John Boehner asked . . .

Beyond politics, the real question is whether the wrong-headedness of the Democrats’ neo-Keynesian policy has bought us the dreaded “double-dip” recession:

The figures come in the same week that the Commerce Department reported consumer spending in the US remained flat in June.
Households in the US continue to be squeezed amid higher unemployment. . . .
There have been fears about the strength of the US economic recovery, particularly as the country continues to grapple with high unemployment.
Higher unemployment and a slowdown in manufacturing have sparked fears of a “double-dip” recession in the world’s largest economy.

Vindication for a pessimist is always bittersweet, but I’ve been saying it December 2008: It Won’t Work.

Category: Economics

Comments

5 Responses to “Recovery Summer: U.S. Now Losing Jobs”

  1. William
    August 6th, 2010 @ 3:34 pm

    You’re kidding. John Boehner made a call back to his stupid, “Where’s the Beef?!” joke.

    Ugh.

  2. William
    August 6th, 2010 @ 11:34 am

    You’re kidding. John Boehner made a call back to his stupid, “Where’s the Beef?!” joke.

    Ugh.

  3. You Call That a Recovery? :: The Lonely Conservative
    August 6th, 2010 @ 1:44 pm

    […] not likely that things will improve any time soon. For the latest in sad economic news see The Other McCain and Hot […]

  4. Estragon
    August 7th, 2010 @ 6:05 am

    The “recovery” was mainly the effect of the $1.2 trillion spent by Obama (the second half of the TARP money spent on Obama’s whims and the $875 billion “stimulus” payoff to unions) hitting the markets. Since it wasn’t real capital investment, its effects are fleeting.

    The chickens be coming home to roost, just like good ol’ Rev. Wright said . . .

  5. Estragon
    August 7th, 2010 @ 2:05 am

    The “recovery” was mainly the effect of the $1.2 trillion spent by Obama (the second half of the TARP money spent on Obama’s whims and the $875 billion “stimulus” payoff to unions) hitting the markets. Since it wasn’t real capital investment, its effects are fleeting.

    The chickens be coming home to roost, just like good ol’ Rev. Wright said . . .