Employers added a meager 80,000 jobs in June
July 6, 2012
This was not the employment report either the American worker or the Obama campaign wanted to see right now. The Labor Department said the U.S. economy created just 80,000 jobs in June, less than the 90,000 economists had been forecasting. And private-sector job growth was just 84,000, down sharply from 105,000 in May. Not doing fine.
The unemployment rate stayed at a lofty 8.2%.
As a research note from RDQ economics put it: "The good news is that employment growth is not slowing further but there is no sign of it picking up either. At this pace, job creation is not fast enough to lower the unemployment rate with the labor force growing at close to 150,000 per month on average." Shorter: Stagnation Nation
This continues to be the longest streak - 41 months - of unemployment of 8% or higher since the Great Depression. And recall that back in 2009, Team Obama predicted that if Congress passed its $800 billion stimulus plan, the unemployment rate would be around 5.6% today.
Just 75,000 jobs were created, on average, per month in the second quarter vs. 226,000 in the first quarter. And for the year, monthly job creation has averaged just 150,000 vs. 153,000 last year. Both numbers are extremely weak.
But those top-line numbers actually overstate the health of the labor market.
- If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office-65.7% then vs. 63.8% today-the U-3 unemployment rate would be 10.9%. Even if you take into account that the LFP should be declining as America ages, the unemployment rate would be 10.5%.
- The broader U-6 unemployment rate, which includes "all persons marginally attached to the labor force, plus total employed part time for economic reasons," is 14.9%, up a bit from May.
- The average duration of unemployment ticked up to 39.9 weeks.
- It will take 219,000 net new jobs a month for unemployment rate to be below 8% on Election Day if current participation rate holds steady.
- Job growth during the three-year Obama recovery has averaged just 75,000 a month for a total of 2.7 million. During the first three years of the Reagan Recovery, job growth averaged 273,000 a month for a total of 9.8 million. If you adjust for the larger U.S. population today, the Reagan Recovery averaged 360,000 jobs a month for a three-year total of 13 million jobs.
- The U.S. work force remains shrunken with just 58.6% employed: