The American jobs engine hit stall speed in May, with the economy adding just 69,000 new jobs while the unemployment rate climbed to 8.2 percent. [CNBC]
PRESIDENTS CAN’T create jobs to move the economy, but they can fall because of it.
The news was bad on Friday, with Dow Jones futures reacting immediately upon opening, with world markets weak.
There were also signs that growth China, which was a bulwark during the global recession, is slowing significantly. China’s manufacturing weakened in May, according to surveys released Friday. The European debt crisis is pinching exports from China, and leaders in Europe must decide whether to abandon the severe budget cuts that have lengthened unemployment lines across the continent. [Yahoo!]
…and we haven’t even gotten to Greece and the fallout if it leaves the euro.
However, people holding on to national polls and an economy that’s dipping weaker for now need to look deeper for predictors of what may happen in November. Ben White hits this point in Politico today, focusing on swing state economics that matter more than anything else for November:
“Most of the swing states by the third quarter of this year will have a lower unemployment rate than the national average,” said Xu Cheng, a senior economist at Moody’s Analytics who compiled the latest state-by-state economic data and updated Moody’s voting model for POLITICO. “And most of the battlegrounds will be below 8 percent unemployment, which will negate the ‘grumpy voter effect.’” Cheng was referring to data suggesting voters will discount by half any improvement in joblessness if the national rate remains above 8.
The Moody’s model, which accounts for unemployment, historical voting patterns, per capita income and other factors, currently predicts Obama will win at least 26 states and 303 electoral votes. The model is one of the few to forecast voting patterns based on economic statistics and other data. In 2008, it came within 25 votes of Obama’s margin in the Electoral College.
Of course, a lot can change between now and November. Europe is again on the cusp of crisis, with Greece possibly leaving the euro. Markets could grow skittish over the prospect of the “fiscal cliff” that will hit early next year when up to $7 trillion in tax cuts expire and spending cuts could slam the economy. Home prices appear to have bottomed out in many key places, but they could fall further.
As a snapshot, the jobs numbers today are bad, no other way to spin it. It’s another chapter in the story for 2012, but it’s not the end of the story.
It does, however, give Mitt Romney a springboard for what he’s been talking about for a long time on the economy: “Obama isn’t working.” The other side, however, is that in battleground swing states where he’s also campaigning, Romney’s meeting a climate where the economy isn’t bad, with states actually recovering.
It’s economics, which means it’s complicated for both candidates. However, with people already disapproving of Pres. Obama’s handling of the economy, today’s numbers are very bad news.
“adding just 69,000 new jobs’
That is better then a net loss isn’t it?
The math says otherwise! This economy needs to add roughly 150K jobs a month just to keep up with population growth. +69K means there are more working age people out there without jobs. Although I am an Obama supporter and recognize the role that the economic crisis in The Euro Zone/Chinese slowdown affects us here, President is largely to responsible for the political situation he is in. He wasted too much time fruitlessly trying to appeal to cons who had no political incentive to work with him or any Democrat for that matter. Now the cons are in the drivers seat, all they have to do is sit on their hands and watch the recovery grind to a halt.
not to mention you also have this nugget of information buried below the May headline………….The change in total nonfarm payroll employment for March was revised from +154,000 to +143,000, and the change for April was revised from +115,000 to +77,000.
Therefore, the +69 might well disappear upon inevitable correction.
If I shared your ideology, I would immediately begin a full court nationwide press to draft Krugman into competition for the Democratic nomination and stop pussyfooting around with Obama.
Those figures (except for last month’s, of course) were revised upwards last month. Corrections happen, thanks to the BLS mis-estimating this or that in any period.
The basic problem is, as Solo mentions, that we need a lot of jobs just to stay even with the growth in population, and we’re not even managing that. We also need at least ten million new jobs to re-employ the folks who lost their jobs in the Crash of 2008, and we haven’t even put a dent in that sum, yet.
Robert Reich would be who I’d be pushing for, at least for President. Krugman or Dean Baker would make good economics advisors, as I suppose would lots of folks (Noriel Rubini, for instance). Anyone who saw this thing coming and said so, in other words.
Of course, there are so few progressives who even recognize that there is a problem, and that it starts with the party that is supposedly ours, that nothing like that is going to happen.
I agree with you.
“PRESIDENTS CAN’T create jobs to move the economy” -True phrase.
It’s businesses and entrepeneurs that create jobs.
However, it is the policies and regulations put in place by the President that impact how the business owners and entrepeneurs decide whether or not to take risks.
Gotta disagree there. It is customers who create jobs. If all our small business had customers creating demand the jobs would come. With so many unemployed and a big group of them not recieving any aide and the low wages that Joyce refers to below demand is way down.
All those supposedly “afraid” to invest because of the mythical horendous regulations would be only to happy to expand if they had the comsumer base to do so, regulations be damned.
Regulation whining is a red herring.
Are you a business owner, Lake Lady?
I suggest you speak with them directly to find out why they are not hiring.
Customers do not create jobs.
Businesses and entrepeneurs create jobs. They create the products for which there is great need or want. But they will not take the risk to create these products, thereby creating jobs, if they cannot justify the risk by financial and strategic analysis. (in which policies and regulation play a significant part.)
No I am not cjoblak, but I was raised in a small business family and I have relatives in business.
My Dad hired when he did not have enough employees to service his customers.
My grandfather who had a mid sized contruction company hired when he had the jobs to complete. He built all of the white brick buildings on the University of Missouri -Columbia campus. He and his contruction workers benefitted from the government investing in the University and so did the students. Oh, he complained of regulations too but he lived a very nice lifestyle and had plenty of everything. His goal was always to keep as many of his workers working as he could during the lean times. Vey different ethics compared to today.
Another thing, I think the days of creating demand with new products are coming to a close among the broader public, asperational purchases are a thing of the past to most.
On the other hand my sister- in-law who is a VP in Ralph Lauren’s Homegoods Division says business is booming.Their customer is doing just fine.
“His goal was always to keep as many of his workers working as he could during the lean times. ”
Note “the as he could.” Apparently, your grandfather was not a stupid businessman. He could justify the risk and kept as many working as possible.
Thank you for reinforcing all of what I just wrote.
Hogwash. Businesses don’t hire people unless there’s a need. There’s no need unless either:
- Current employees leave
- There’s more business
The latter requires more consumers of one’s product. That’s why there’s been no recovery – the demand isn’t there. There is plenty of cash, thanks partly to the Fed pumping so much into the banking system, and many big corporations having money to burn thanks to record profits. People aren’t consuming like they used to, and they won’t until they have jobs, or have jobs like the ones they used to have.
As for the crack about running a business, you clearly haven’t – not a successful one, anyway.
Are you responding to me, Cujo? If you are, then you didn’t read all of what I wrote.
See the part about business creating jobs based on needs or wants.
Business owners do what they do to make money. If there is no money to be made then they will not be hiring, and again, they are basing this on financial and strategic analysis. If the risk is too great, they will not take on more employees.
Yes, I was responding to you.
You didn’t check the video. The nonsense of talking about business owners being “job creators” is what I was responding to . You can dress that pig up any way you want, it’s still a pig. Without demand, which is what’s lacking in this economy thanks to high unemployment and flat wages for everyone not in the upper 1%, there will be no new jobs. “Job creators” is a nonsense term people use to justify continuing to do the same things that got us here – giving breaks to the rich so that they can “create jobs”. They don’t, and never have. What creates jobs is a healthy economy, of which business owners and executives are only a small, albeit important, part.
I have owned a business and what you are shopping is complete supply side BS. Supply side economics have been shown to be a compete fraud. Have you ever taken an Econ 101 class where you learned the basics of supply and demand? Obviously not. If ALL the regulations disappeared tomorrow we would still be in the same boat. Supply side operates on teh fallacy that if you make something you will have customers for it which is a fallacy. Demand is what keeps things going. With supply side you have to create ARTIFICIAL demand. It’s kind of like those infomercials telling you that you need something when you don’t. We hired people when demand for our product went up and it had nothing to do with anything else out there. Supply siders think everything operates like a plantation with the “plantation owner” deciding who gets jobs and who doesn’t. Without a customer base, there is no company. If all this worked so great then we would have gained jobs during Bush’s terms instead of losing millions of jobs.
If the real unemployment rate was used — counting people who for various reasons aren’t included in official totals — things would look even worse, because things are even worse. And if the fact that lots of people who got jobs in the last few years are being paid less; and that one reason the lower paying jobs are less available is because people who use to make more are taking those lower paying jobs … if numbers that reflect the realities of millions were used, maybe, just maybe, we the people would get serious about holding the feet of the Electes, Dems and Repubs, to the fire. Maybe.
Yep, *real* unemployment rate.
The biggest thing that hasn’t happened that could be a real game changer is Greece & what’s happening in China as well.
It’s really not all about the US.
The slowdown in growth in both the US and China is all about Europe! I believe there is suppose to be an election in Greece and if that election doesn’t go the way lenders want that 69K number will look good compared to the number a few months from now!
No, it isn’t. We don’t trade that much with Europe. When Europe collapses, there will be a ripple effect here, but that hasn’t happened yet. Right now, our problems can clearly be blamed on the failure of our leaders to do what was needed.
I completely agree that unlike individual country’s in the Euro Zone our problems are completely within the power of our leaders to deal with. I don’t see the conflict between what you said and what said. It’s true that the Europeans are pretty low down on the list of people we trade with but what your not recognizing is that there is a psychological aspect to economics which means your very true statement isn’t going to matter much to people on Main Street or Wall Street.
That’s your argument, that a place most Americans couldn’t find on a map makes them worry about their economy? Good grief, you can reach a long way for a justification. What people are looking at is the economy in their own neighborhoods, which, collectively, isn’t all that good. They can’t find jobs, or they can’t find anything but McJobs that don’t pay jack. Storefronts and offices are empty right where we live. Why in the world would anyone worry about Greece?
-(guess who)
I wish someone other than Romney was going to be our next President. In the Primaries many people in the GOP were openly dissatisfied about the lack of choices the Republican Party had to offer. Day by day it is getting clearer that Mitt Romney will be our President come January, 2013. Barack Obama was and is nowhere near qualified to be President of the United States and it shows, big time.
Shovel Ready Jobs
Green Jobs
Yes We Can
Hope
Change
Solyndra.
Do you really think that’s anything remotely resembling a valid point? Speaking as a former defense worker, I can tell you that there are enough contracts awarded there based on political convenience to fund a thousand Solyndras. Nothing worth doing in government is going to be free of this sort of thing. The best you can hope for is to minimize it, which at least partly requires trying to find honest people to run the government.
Lots taxpayer stimulus money gone bad. Another failure, how many failures does it take for you to figure out it doesn’t work. And where is all that money anyway?? In some undeserving person’s bank account.
Cujo,
What video are you talking about???
And that is bullshit about business owners not being job creators. I really wonder what planet some of you have been on lately. Customers do not “create” jobs. They are the ones with the “need or want”. The business owner creates the business that creates the jobs to create the goods or services that are needed or wanted. Customers do not create. They do not take the risk. They do not go to the bank to get the business loan to create a business which would supply new “jobs” to create the goods and services that are wanted or needed.
People need a job so they can buy the goods or services that they require. You have it backwards. Someone has to create a job for them so they have the money to buy, which by the way STIMULATES the economy. You have it backwards.
See that blue type in my first comment? Click on it. All else will be revealed.
No, I don’t have it backwards. What we’ve been doing these last few years is support the so-called “job creators” at the expense of everyone else, and we have a flat economy as a result. Big corporations are making record profits right now, and Wall Street is booming. They have lots and lots of money. If that was all it took to “create jobs”, then they would have been created already. What is needed is demand for more products. That means what it takes is the government doing the things we need to do while the economy is flat, to increase employment.
Let me just emphasize this, because you clearly do not get it – there is a lack of demand. Demand is created by jobs, which the so-called “job creators” are not going to create without more demand. Creating employment, at good levels of pay, is the way that demand is going to be increased. That means the government must do it. There is no one else right now.
Now, go do your homework and come back when you’ve learned something.
I can need or want a new car or new Ipad all day long. But, if I ain’t gots a job, which a business owner has created for me, I ain’t gonna get me a new car or IPad.
Sorry buddy, you’re dead wrong.
No, you’re wrong. No business owner is going to create I-pads for customers that don’t exist. Do you really think that they are going to pay somebody to sit around and do nothing? That’s what you seem to think is going to happen. It’s Econ 101–the basic laws of supply and demand. Things don’t “trickle down” as much you might like to think they do. Wall Street has record profits and if trickle down worked, we would have jobs all over the place.
Consumer spending is 2/3 of the economy and that is what drives the economy. When consumer demand is down, that’s when we get the situation we’re in now.
“Demand” means that there is money ready to buy something, or will be. Wishing for something you can’t afford isn’t demand in this instance.
Like I said, do your homework.
The government is more of a parasite, and is definitely not a job creator.
See Solyndra – parasite, (government)
See Cerner – job creator (non-government)
There is a consumer demand depending on the product. Apple/iPad is a good example. A good product will sell regardless of the economy. Then there is creating a demand, which car sales are an example. This demand is created by three things:
1. Age vehicles – your gonna have to eventually by one.
2. Affordable credit – now thisI is the ‘iffy’ part. care loans are sub-prime. A person does not have to have good credit to get one. But I guess the amount of loss is manageable compared to say a mortgage.
3. Incentives – price
Now when it comes to the economy, what is always kind of looked over is housing. And the impact that housing has on the economy. This has never been practically addressed.
Unless your solution to increasing demand is to hand out more transfer payments, which is always a temporary fix, then you ought to concentrate your discussions on solving for this…….
http://www.bls.gov/emp/ep_chart_001.htm
The people on the left side of the dotted vertical line won’t get jobs in green energy or teachers’ unions and probably not even state government………unless it is the DMV.
Back when there was a healthy manufacturing sector in America, and there were unions, people made a living at skilled labor. Nowadays, skilled labor generally commands a minimum wage. That chart has always looked somewhat like that in one way or another. The more education you have, the better off you are. So what? Unemployment is higher in just about every industry, and every job category. Demand for products spurs economic growth in conditions like this. More jobs, and higher paying jobs, means more growth.
We’re seeing the natural result of the last three decades of taking from the middle class and poor and giving to the rich. Until that trend is reversed, we’ll be seeing times like these.
I suppose President Obama is responsible for the world economy slowing huh?
He’s responsible for his own screwups, which have been plentiful enough to put us into the position of being worried about what Europe’s foolishness will do to us. I’ve mentioned enough of those screwups often enough that I’ll just recite the Cliff Notes versions here:
- Proposed a stimulus that was known to be far too small at the time as the only stimulus needed
- Refused to implement useful reforms in the financial industry
- In the worst financial collapse in almost a century, which was caused by widespread control fraud, refused to prosecute a single bank executive
- Refused to create a helpful means of writing down mortgages to reasonable levels, despite the losses of personal income that would result, while propping up the banks’ overextended finances whenever they asked for it
- Continued two useless and hideously expensive wars, which diverted money that could have been used to hire at least a million Americans.
As I also mentioned earlier in this thread, Europe’s problems don’t yet add up to a problem for us. That problem lies in our future, and it will come, unless a bunch of very foolish people wise up very quickly. That we find ourselves in this position, though, is at least partly due to the actions of President Obama and our other so-called “leadership” in DC.