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Go Home Today’s Jobs Report: Private Sector *Not* Fine

PLANK JULY 6, 2012

Today’s Jobs Report: Private Sector *Not* Fine

BY NOAM SCHEIBER

It was this time last month when the president committed his infamous “private sector is doing fine” faux pas. To Barack Obama’s defenders, it was a classic Washington gaffe, in which a public figure utters a true but nonetheless impolitic remark. And, on some level, there was a fair amount of truth to it. Obama’s point was that the real drag on the economy isn’t the private sector, which has steadily added jobs over the last few years, but the public sector, which has continued to shed them at an alarming pace. As long as governors and mayors keep laying off teachers, firefighters, and cops, the president was saying, it's hard to see how the recovery can get its legs. And, unfortunately, Republicans have consistently blocked his proposals for reversing this trend.

As I say, there’s more than a bit of truth to that. Still, if there’s one thing that really jumps out at you in today’s jobs report, it’s that the private sector isn’t doing so hot after all. In June, private employers added a mere 84,000 jobs. They added 105,000 jobs the month before, and 85,000 the month before that. To put this in some context, the economy needs to add about 100,000 to 150,000 new jobs each month just to keep up with population growth; the private sector has averaged 91,000 over the past three months. Which is to say, even if government job losses weren’t weighing us down, we'd still be struggling because the private sector has been pretty damn anemic. 

The upshot is that we’re no longer in a world where sending states a few tens of billions of dollars to shore up their finances is going to get the recovery on track. The economy, by which I mean the private sector, is disconcertingly weak, and strengthening it is going to take something on the order of several-hundred-billion dollars. 

The good news is that Obama actually has a plan of roughly that magnitude—the $450 billion American Jobs Act he proposed last September, replete with new payroll tax cuts and additional aid for the unemployed. The bad news is that, in the vein of his “private sector is doing fine” comment, we’ve heard remarkably little about this package in recent months. I’m not sure if that’s because Team Obama believes focusing on it would draw attention to how fragile the economy is at an inconvenient time in the political cycle. Or because, after three plus years of intransigence, Obama has calculated that Republicans aren’t going to abruptly drop their deal-breaking opposition. But, regardless, I think it’s the wrong strategy. One theme that runs through numerous White House missteps these last few years is the impulse to game out what the political constraints will allow, then proceed within them, rather than start with the optimal policy and fight for as much as they can get. (The major exception was the Jobs Act … before it was shelved.) But with the unemployment rate stuck above eight percent only four months before Election Day, maybe the latter is worth a shot. Sometimes good policy really is the best politics. 

Follow me on twitter: @noamscheiber

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35 comments

Oh, please, that was SO 4 weeks ago. And it was a tempest in a teapot at the time. Since then, we've had the ACA decision, and Republicans at last agreeing to pass the Farm Bill and Student Loans extension. Those are real issues, not these "Oh, he said the FINE word!" 5-th grade gotchas.

- AllanL5

July 6, 2012 at 12:09pm

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It may be "SO 4 weeks ago" Allan but if you see a consistent barrage of TV ads showing BO saying that line 4-5 times in an evening in a swing state (North Carolina), you aren't allowed to forget it.

- tmmats

July 6, 2012 at 12:22pm

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The issue is jobs, public and private. There is a multiplier when upwards of 500,000 good paying public sector jobs are lost. It sucks private sector jobs out of the economy as well. On the other hand, many of the private sector gains are with temp agencies and other miserable paying, no-benefit service jobs. Grim.

- Vogelfam

July 6, 2012 at 12:26pm

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2010 redux. How did that work out? Some have suggested that a dead Democrat could have defeated the Republican nominee in 2008, GWB having made such a mess of things. Which reminds me of the old joke about all of the Bushes, that they were born on third base and think they hit a triple. Maybe Obama's problem is he thinks he actually won in 2008. For those with short memories, Obama did not run for president in 2008 on a platform to rescue the nation from a financial collapse and an economic crisis (those events did not occur until very late in the campaign).

- rayward

July 6, 2012 at 12:31pm

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yet adp has reported job gains of 167,000 jobs. Can anyone explain the discrepancy?

- blackton

July 6, 2012 at 12:50pm

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Right Vogelfam, et.al, there's a synergy in our economy, between private sector and public sector jobs so cutting one arm off makes a whole lot of sense (not). I am so furious right now at the GOP I could scream. Never in my wildest imagination did I think the US would fall prey to the radical right.

- Sophia

July 6, 2012 at 1:52pm

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Clarification: I meant "nightmares."

- Sophia

July 6, 2012 at 1:53pm

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If you can afford to, hire somebody. Although we are retired, and do not have much money, my wife hires a man (who chooses to live a subsistence life style) to help her in our garden. I subscribe to TNR, and post silly comments. If we can do this, you can, also. Though your comments are not as silly as mine.

- skahn

July 6, 2012 at 2:14pm

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So-called free-market capitalism is on its last legs. It worked well in America up to the 1950's, because the population was limited and the resources unlimited. Now the reverse is true, and the only way corporate America can pile up over $2 trillion in the bank is to replace American workers with Third World slave labor, robots, machines, and computers. Taxes and regulation are not the problem, when business has enough cash profits to stack them higher than Mt. Rainier. Employers are the problem. They're doing better than fine, they're doing just dandy. Except they're greedy, and greedy people are constipated--and anti-American. Some say they're waiting for a Republican president to eliminate regulations and lower taxes even more, and then they'll open up and employ Americans. Right. They had the chance to do that under Bush, and look what happened. We were bleeding jobs even before deregulation crashed our economy. All even lower taxes and even fewer regulations would mean is that corporate America would double the size of its savings accounts, while eliminating even more jobs for Americans. Five trillion dollars in the bank with fewer and fewer jobs--"free" enterprise in the modern world. It no longer works. Obviously.

- magboy47.

July 6, 2012 at 2:22pm

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I find your comment a bit puzzling, ray. It's true that Obama did not run on economic rescue but he wouldn't be the first president to find that the universe changed as he sat down behind the desk. Neither is 53% of the popular vote an accounting error. So, yes, he won fair and square -- which is not a prediction for November of course, but neither is it like Bush in 2004 wanting to shake the legacy of 2000.

- ironyroad

July 6, 2012 at 3:14pm

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Obama didn't run on economic rescue in 2008, and he won. Obama isn't running on economic rescue in 2012, so he will win. Right? If it worked in 2008. I like "dead Democrat" because of the alliteration, but the more accurate assessment for 2008 would be that, GWB had made such a mess of things, that even a black man or a woman could defeat the Republican nominee in 2008.

- rayward

July 6, 2012 at 3:23pm

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That's an accurate assessment, in your view? I beg to differ. If McCain had made a less disastrous running mate pick, he could well be president today.

- ironyroad

July 6, 2012 at 4:49pm

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Talk about defining success down. To account for population growth, the economy need add about 150,000- or more --jobs/month. To reduce unemployment to 5% in a couple of years (or is that no longer a Dem goal?), the economy need add about 300,000 job/month. We did that in the 1990's. Scheiber calls 100K jobs per month fine -- or near fine -- or OK. What BS. It's a sad day when the average unwashed voter often disparaged by tnr commenters knows better than tnr pundits.

- drofnats1

July 6, 2012 at 7:17pm

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Even if (when) O'bama does win in November, what are his chances of getting a second, meaningful stimulus through congress? Slim, I would imagine. Hard to see a way out of this.

- IggyPop

July 6, 2012 at 8:06pm

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Drof, nobody has disparaged your understanding of economics. What we disparage is your farcical misreading of America's political landscape.

- AaronW

July 6, 2012 at 9:25pm

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Is there any estimate of the effect of the reduction in public employment on private employment? That has got to affect consumer demand for goods and services in the private sector. But somehow the connection is seldom made.

- brthompson

July 7, 2012 at 12:33am

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Blackton, ADP and the BLS use far different sampling methods and populations as I understand it. For example, I'm pretty sure that ADP only surveys private employers and, accordingly, doesn't measure the impact of government growth or shrinkage. But in my experience, on this and other issues the very best blog---and one that's aggressively non-partisan---is Bill McBride's Calculated Risk at www.calculatedriskblog.com. He tears apart numbers thoroughly and I find he hits a perfect balance between wonky number crunching/stats-talk and analysis for the common reader. He reviews not only the big reports like monthly ADP and BLS but also all sorts of weird ones like "builders notes" reports, numbers on architectural pre-billings, rail and intermodal transportation numbers and lots of stuff on housing, construction and mortgage lending which is his forte. Fun for the whole family and informative to boot. Check it out...

- SteveJudd

July 7, 2012 at 1:20am

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What is there to do, analyze, and re-calculate. We have been told by the head of the Federal Reserve, Bernanke, and by the Treasury Secretary, Timothy Geitner, that high unemployment is here to stay for years to come. If you do nothing, nothing happens. Hence 25 million Americans and their families , a third of the USA population will be unemployed and on poverty, for years to come. And ten million homes will be under foreclosure for years to come. On the other hand illegal drugs trafficking and consumption in the USA amounts to one trillion dollars. Somebody has the money, somebody enjoys forgetting. And according to the UN report on illegal drugs trafficking, money laundering saved USA banks from collapsing. Maybe the bailout of wall street also helped. Hey fellow American can you spare a dime, can you help an American to a meal? And nothing changes the fact that there are 25 million Americans unemployed, and 10 million homes under foreclosure. That their leaders do nothing to change it. Life continues. Mexico has a new president, and he is mucho guapo. Mexico city has approved and implemented same sex marriages, quite an achievement in such a strong Catholic country. The Mexican Catholic Cardinals have been in an uproar since. And Barney Frank, of subprime fame, is getting married with his companion, what should we call it a June bride/groom/whatever, and all of the above. BHO is not invited, Barney doesn't want the secret service around disrupting the festivities. Or is it the secret service may be attracting call girls and doing their thing. Well the republicans don't give a damn about the unemployed, and the democrats...well they are busy with weddings and such. What to do what to do coming November. How many assenine analyses will we get from the pundits Sheiber, Cohn, and TNRites. Marty Peretz is gone but not forgotten.

- JAIMECHUCH

July 7, 2012 at 7:34am

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BTW the exuberant Colombian call girl that opened our attention to secret service men indulges and earthy pleasures, is also not invited to Barney Frank's wedding. Is it going to be just a civil wedding, or also Jewish wedding. You know Reform rabbis will be willing to officiate. At any rate Mazel Tov, Barney and Beau. Wish you all kind of happiness and good healt. And many many children you can adopt or procreate. Skunk can give you details, he posts it with frequency...his daughter...partner....inseminated...granddaughter.... Skunk will be willing to repeat it if you can stand his whining and fear that when he is gone to the big adios, because he is not a believer, the devil will grabe him by the balls. But again he doesn't believe in the devil either. Is all fine with his shit chicken wise speaking.

- JAIMECHUCH

July 7, 2012 at 7:59am

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Should have been grab.

- JAIMECHUCH

July 7, 2012 at 8:03am

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An interesting development out of Small Business Land, the small companies are looking to see what they can do to get their employment levels below 50 and avoid the Obamacare Mandates. These businesses have huge incentives to be below 50 employees where the mandate kicks in. Evidently these companies are looking to outsource and switch to Temps to get under the line. It makes sense if you are the one who has to report to the government about compliance. It kind of hurts when you are the one leaving the sompany. The administration better have a plan to help these small companies understand what they can do to grow and maintain compliance, but I doubt it. Who doesn't want free health insurance?

- CRS9TNR

July 7, 2012 at 11:13am

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The biggest part of this story is the numbers for African-Americans: while all other ethnic groups have held steady since Spring, black unemployment has risen over .5%. For young African-Americans its at a staggering 40%. (I'd mention the loss of low skill jobs from modernization and the effect of illegal immigration since the 1980s, let alone the newly unfettered 800,000 DREAM-ers, but in the past when I've done this I've been called a racist, rape-enabler, and supporter of the sex slave trade (I'm not exaggerating) so we'll just assume that those numbers are just random blips (kinda like what the Tea Party does with evidence of global warming).

- Lymon1

July 7, 2012 at 12:44pm

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Lymon1 I have had the same experience. However I critized BHO for not helping his half brothers. Although these are harsh words, they are the truth. What BHO has done is worst than my harsh words. It is unforgivable that Black youth unemployment is running at 50%. BHO knows that he has the Black vote in his pocket thus ignores their plight and suffering. He has been criticized by the likes of Tavis Smily (PBS) and even more by Cornell West the Harvard/Princeton professor and activist. To no avail, BHO just ignores them. Due to his advisors , that are wrong, BHO clings high unemployment. As I said befor the head of the federal reserve, Bernanke, and his treasury secretary, Timothy Geitner, insist that high unemployment is here to stay for years to come. These people should be fired. The bottom line is that BHO has significantly jeopardized his re-election. The republicans are worst, they are enemies of the middle class. If they come to power there will be a tsunami. Maybe just maybe that is what we need. The dilemma is what do you do come November. Certainly BHO is the best of two worsts. A third candidate would be ideal, but so far there is none.

- JAIMECHUCH

July 7, 2012 at 6:31pm

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Maybe just maybe Hillary will decide to run. As Tavis Smyly keeps saying. Keep The Faith.

- JAIMECHUCH

July 7, 2012 at 6:37pm

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Here you have it BHO ignores Tavis and those that criticize him. Tavis Smiley: Obama Is The First President Who Hasn't Invited Me To White House First Posted: 08/10/11 03:18 PM ET Updated: 10/10/11 06:12 AM ET React Amazing Inspiring Funny Scary Hot Crazy Important Weird Follow Barack Obama , President Obama , Video , Tavis Smiley , Tavis Smiley Cornel West , Tavis Smiley Obama , Tavis Smiley Poverty Tour , Cornel West Obama , Media News , The Backstory , Media News SHARE THIS STORY 857 102 330 Get Media Alerts Sign Up Submit this story NEW YORK -- When Cornel West recently spoke to The Huffington Post about media coverage of African American issues, the Princeton professor argued that President Obama is avoiding journalists who’ve offered tough critiques of his administration, such as PBS host Tavis Smiley. "Obama won’t touch him with a 10-foot pole," West said. On Wednesday, Smiley backed up West's viewpoint during a C-SPAN sit-down with him to discuss their 16-city poverty tour. “Prior to his being elected, he came on my radio programs and TV programs with regularity,” Smiley said. “Once he got elected and my critique of him -- about holding him accountable to various things didn’t sit so well with him or the people around him -- he has not, at this point, come on my TV or radio programs one time since he’s been in this White House.” Smiley said that Obama, whom he's known for years, "is the first president in my professional career that hasn't invited me to the White House." WATCH: The White House didn't have any immediate comment in response to Smiley's statements. FOLLOW HUFFPOST MEDIA ON Facebook: Like 46k Twitter:   Get Alerts CONTRIBUTETO THIS STORY Send Corrections Send us a Link Contact us Send a Tip Send Photos/Videos Comment

- JAIMECHUCH

July 7, 2012 at 6:41pm

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Maybe we should ask Tavis Smiley and Cornel West to become third party candidates. At any rate we celebrate today Serena Williams becoming tennis women champ in Wimbledon, for the twelfth or thirteenth time. And with her sister Venus they win women's tennis doubles coming up in the same Wimbledon. Serena has a record of more than one hundred aces, superior to men like Federer and such. It was just great to watch Serena win, a charming sweet young lady at thirty. There has been racism and bigotry during their careers. But all have failed miserably.

- JAIMECHUCH

July 7, 2012 at 7:19pm

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Aaron.. I gather your reading of the political landscapre is that voters regard 8% or worse unemployment for years to come and flatline GNP growth as just fine... and thats why BHO has such a huge lead over Mittens and Repubs who advocate certifiably insane policies. yuh..Riight. The economic picture in October will most likely decide this election. Dems like you may well yet thank their lucky stars that Predident Mittens, like candidate Mittens, doesn't generate much of a personal following.

- drofnats1

July 7, 2012 at 10:16pm

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And AaronW lives in Australia. They have austriches that , what else, when in trouble ..they bury their heads in the sand.

- JAIMECHUCH

July 7, 2012 at 11:21pm

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First the spelling is ostrich. Second the Australian relative is the emu. They are the largest birds. And one of their eggs can accommodate a dozen chicken eggs. ..... Omelette anyone? AaronW... have you tried an emu as your pet? aaaah those Aussies.

- JAIMECHUCH

July 7, 2012 at 11:32pm

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Drofnats, you seem incapable of refraining from putting words in people's mouths. Do I think 8% unemployment is "fine"? No. Do I think the voters think its "fine"? Again, no I don't. Do I think that Obama deserves blame for his failure to push for more significant stimulus in 2009? Yes, I do. Where I find your assessment of the state of affairs fanciful and farcical is in your oft-stated opinion that punishing Obama by delivering the White House to Romney will somehow result in a resurgence of liberalism and Keynsian economic policy. My read on you is that you are so deeply and personally affronted by Obama's shortcomings that you cannot stomach supporting him under any circumstances. You wanted a liberal primary challenger to emerge. When that didn't happen you had either to swallow your bile and throw you support behind the Democratic ticket as imperfect as it is, or develop a theory as to why not supporting Obama will ultimately work out in the favor of progressivism. Trouble is there is no data whatsoever to support your theory and much data to contradict it.

- AaronW

July 8, 2012 at 4:07am

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Jamie Church, I live in Australia but I am no more Australian than you are a psychologically stable adult.

- AaronW

July 8, 2012 at 4:11am

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AaronW you have the psychological knowledge of an emu. Each time you are unable to challenge an argument, that happens often, you call your adversirer crazy. Typical behavior of inferiority. Go and jump with your pet kangaroo. AaronWaste you not. A typical schnuck if not schmuck.

- JAIMECHUCH

July 8, 2012 at 7:31am

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AaronWaste you not, it is JaimeChuch, not Church. Pay attention and stop having the brain of an emu. I apologize to the emus of this world for comparing them to AaronWaste you not. You see there is now winter in Australia and AaronWaste you not is shivering, psychopath as he is he calls everybody else loco, meshugener, and loves BHO the president of the unemployed. But Mitten Ruminating is an enemy of the middle class. Is fun to confront this Aussie with his weakened mind.

- JAIMECHUCH

July 8, 2012 at 7:44am

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What do you do in Australia AaronWaste you not? Collect emu eggs in the beach? No you collect emu droppings. Psychological stable adult...that's one for you. Wally rings the bell.

- JAIMECHUCH

July 8, 2012 at 7:51am

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"the impulse to game out what the political constraints will allow, then proceed within them, rather than start with the optimal policy" This seems so accurate as to to be obvious. It could also be reversed to apply to Republicans with the exception that they ignore "all" restraints and start with "reckless" policy.

- Nusholtz

July 9, 2012 at 7:56am

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