JONATHAN COHN SEPTEMBER 2, 2011
The August jobs report is out from the Bureau of Labor Statistics. And it is ugly. Via Neil Irwin of the Washington Post:
Job creation came to a halt in August, according to new government data that show an economic recovery that appears to be puttering out.
The Labor Department on Friday reported zero net job creation in August, far worse than the 68,000 net jobs analysts had expected to be added. The unemployment rate was unchanged at 9.1 percent. The July job growth number was revised downward, as well, to only 85,000 jobs added that month--not the 117,000 first estimated.
Call it the goose egg economy: The report of zero job growth matches other recent data pointing to a flatlining economy, such as a survey on manufacturing released Thursday, which placed activity right near the line that divides expansion from contraction.
The overall number is slightly misleading, since it counts among the unemployed 45,000 striking Verizon workers who have since returned to work. But most of the underlying data was discouraging, too. Among other things, the average private workweek fell from 34.3 to 34.2 hours.
House Speaker John Boehner and other top Republicans were quick to blame the poor state of the economy on President Obama's economic policies: It's too much spending, the threat of higher taxex, and the uncertainty of future regulations holding back business. This diagnosis continues to defy the wisdom of the majority of mainstream economists, who believe the problem is households with too little money to spend. The uncertainty in the economy, they say, is uncertainty when customers will start buying goods and services again -- although uncertainty about the debt ceiling fight surely didn't help.
Oh, and for the umpteenth time layoffs from government jobs offset the (meager) hirings by the private sector, strengthening the case for direct federal aid to the states.
I'm off for the rest of the day. I'll be back after the weekend, hopefully having thought of new and creative ways to make people believe that we need a big jobs program -- and that we need it now. I'd like to think these numbers would make that task easier, but...
Update: Ezra Klein is absolutely right that this report also strengthens the case for a proposal, by Rep. John Larson, to make job creation part of the super-committee's mandate. The idea hasn't had much traction so far, but maybe these numbers will change that. (And maybe it's the kind of bold move President Obama needs for his speech.)