Kevin summarized the "sputtering" numbers on Friday; now the Wall Street Journal digs a bit deeper, and concludes that the report's details paint a much "darker picture" than a fractional reduction in the unemployment rate might suggest. The Obama-era "recovery" continues apace:
On the surface, the August job numbers look solid: a 169,000 gain in jobs, close to expectations, and a drop in the unemployment rate to 7.3%. But the details paint a darker picture that should raise concerns about the consumer outlook in the second half. The July jobs increase was revised much lower: 104,000 vs 162,000. And the unemployment rate fell mainly because about 300,000 adults dropped out of the labor force. The August report changes the view of the U.S. labor markets. Businesses are still reluctant to hire new workers at a pace that would support faster consumer spending. And without stronger consumer spending, it is unlikely gross domestic product growth will rev up in the second half.
Indeed, another disappointing trend in the employment numbers was lackluster pay growth. The average hourly wage rose a nickel in August but stands only 2.2% above its year-ago level. Household budgets barely are keeping pace with inflation. A spike in gasoline prices, triggered by the Syria situation, could put real buying power into the hole again. Coupled with the gain in jobs, total wages and salaries probably grew modestly last month. But the latest available income data show wages and salaries fell in July — and those numbers came out before Friday’s revisions showed fewer jobs were created in July than first thought.
These stats are jarring additions to my pre-jobs report post from last week, marking the three year anniversary of Tim Geithner's infamous "Welcome to Recovery" New York Times op/ed. A few bullet points from my piece:
(3) The long-term unemployed continue to suffer, with few signs of light at the end of the tunnel. The Wall Street Journal reports, "More than four years after the recession officially ended, 11.5 million Americans are unemployed, many of them for years. Millions more have abandoned their job searches...he recovery isn't reaching many of the most vulnerable."
(4) US consumer confidence remains mired in an upside-down malaise of pessimism.
(5) The new healthcare law is driving a sweeping trend toward temporary and part-time hiring. Since the beginning of this year, fully 97 percent of all US job growth has come via non-full-time jobs -- a staggering statistic.
(6) The first two quarters of 2013 have produced anemic GDP growth rates.
(7) Poverty rates are at a multi-decade high, plus food stamp usage and federal disability claims have also reached record levels. As of last year, the uptick in the latter category had outpaced all private sector job growth since 2009.
Following Friday's news, the GOP produced a rapid response video, seizing upon the American economy's dismal labor force participation rate -- the lowest in three-and-a-half decades -- and asking whether sluggish growth, depressed workers, and low wages are the "new normal" in America: