Jobs Report Even Worse Than Expected -- Will Lawmakers Keep Cutting Taxes for the Rich and Spending for the Poor?
Analysts' expectations ahead of today's monthly jobs report were lowered this week after the release of troubling news about manufacturing, housing and retail sales. But they weren't lowered enough.
In its seasonally adjusted report, the Bureau of Labor Statistics announced that only 54,000 jobs were added to the economy, far below the monthly average of 182,000 new jobs added in the first four months of 2011. The private sector added 83,000 jobs, less than a third of what it did in April. Layoffs of 28,000 public-sector employees in financially straitened state and local governments brought the overall numbers down.
The official unemployment rate rose to 9.1 percent.
Chart courtesy of Calculated Risk
Numbers for job growth in March and April were revised downward as well, in March from 221,000 to 194,000, and in April from 244,000 to 235,000.
Whether the sharp reversal of a steadily improving job creation trend since January will be a one-month affair or something more permanent will without doubt be a big topic of discussion today. The report will certainly add to growing concerns about the slowdown in an economic expansion that has been anemic in terms of job creation since it began 23 months ago.
“You are always going to have some good things and some bad things that happen, always,” said Neal Soss, chief economist at Credit Suisse. “Why do the downs feel so much more threatening these days? Because economic growth should be much faster. Any little adversity feels much worse when growth is so much closer to zero.”
While most economic analysts do not believe that the economy will slide back into a recession — which would technically mean that the economy would start shrinking again — they acknowledge that with such low levels of hiring, the expansion is barely perceptible to many Americans.
The number of officially unemployed rose to 13.9 million. The labor force participation rate held steady at a low 64.2 percent, where it has now remained for five months. The employment-population ratio held steady at 58.4 percent. The number of Americans without work for six months or more rose to 6.2 million.
An alternative measure of unemployment—U6, which includes the underemployed and a portion of the nation's discouraged workers, fell slightly to 15.8 percent.
One of the bright spots in previous jobs reports have been the gains in the manufacturing sector. But in May, manufacturing jobs fell by 5000.
From January 2000 to December 2009, the U.S. lost 5.8 million manufacturing jobs. Since January 2009, it has lost a net 853,000 manufacturing jobs. But from January 2010 to April 2011, some 250,000 manufacturing jobs had been gained.
So what will be Washington's response to this disastrous report and its confirmation of what other economic news has been showing? Could it be cut taxes on the rich and cut spending on the poor?
Among other statistics in today's report:
• Unemployment rates for adult men, 8.9 percent; adult women, 8.0 percent; teenagers, 24.2 percent; whites, 8.0 percent; blacks, 16.2 percent; and Latinos, 11.9 percent; the jobless rate for Asians was 7.0 percent, not seasonally adjusted.
• Number of people working part time involuntarily (who would prefer full-time work): 8.5 million
• Number of people jobless for 27 weeks and more increased by 361,000 to 6.2 million.
• Employment in the retail trade rose 57,000.
• Mining employment rose by 7,000
• Construction employment was unchanged.
• Employment in health care services rose 17,000
• Employment in professional and business services rose by 44,000.
• The average workweek for production and non-supervisory workers rose 0.1 to 34.4 hours.
• The average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents, to $22.98.