In a stunningly weak performance, the American economy effectively ceased creating jobs last month, the government reported Friday, saying just 32,000 positions were added in July.
Put that in perspective. Imagine that the economy added 12 times that number of jobs in a year. That would be 384,000 jobs. With the econoy employing about 139 million workers that number would lower the unemployment rate by less than three tenths of a percentage point if that growth rate in employment was sustained for a whole year.
Mr Bush's treasury secretary, John Snow, reflected the administration's disappointment that the gain in jobs last month had failed to match Wall Street's 228,000 forecast.
Using the payroll survey measure there are still fewer people working now than at the beginning of Bush's term of office.
Payroll jobs remain 1.5 million short of where last winter the White House said they would be by now. To avoid being the first president since Herbert Hoover to preside over a net job loss, Bush must hope for 372,000 new jobs a month in August, September and October.
Analysts with the Economic Policy Institute, a liberal Washington think tank, said that the economy has lost 1.1million jobs since Bush took office in January 2001 and that job growth has not kept pace with the 150,000 new jobs that are needed each month to keep up with growth in the workforce population.
Note, however, that the payroll survey is only one of two major methods used to measure employment. The household survey provides a separate independent way to measure employment and the household survey is also the source of the unemployment rate.
The unemployment rate, based on the household survey paints a rosier picture of declining unemployment rates.
The unemployment rate, however, dipped to 5.5 per cent last month, from 5.6 per cent in June. The new rate was the lowest since October 2001.
The household survey paints a rosier picture.
The Labor Department said its survey of households — which includes agriculture workers and the self-employed — again showed a picture vastly different from the employers' payroll survey, with a whopping 629,000 jobs being added in July, to 139.7 million.
From the standpoint of the Presidential election what is very important is who is getting the new jobs. Are the new jobs going to voters or non-voters? Here the news looks worse for Bush's reelection prospects. See my previous posts Black Male Labor Market Participation Declines In Face Of Immigrant Influx, Non-Citizens And Illegals Getting Over A Quarter Of New Jobs, and Foreign Employment Rises In US As Native Employment Declines.
|Share |||By Randall Parker at 2004 August 07 03:01 PM Economics Political|