Almost everything in today’s jobs report suggests recession-like conditions in the labor market. You don’t want to read too much into any one report, but considering the last two reports together, the American jobs machine has stalled.
–Payrolls not only went nowhere in June—up only 18,000—but May’s lousy 54K was revised down to 25K;
–Unemployment is now on a rising trend, up steadily from 8.8% in March to 9.2% in June;
–Both average weekly hours for people who have jobs, and their average hourly wages, fell slightly, meaning smaller paychecks and less buying power;
–The employment rate—the share of the working-age population employed, and a key measure reflecting employers’ demand for labor—was 58.2% in June, the lowest in almost 30 years;
–Underemployment, including the 8.6 million “involuntary part-timers” (meaning they want, but can’t find, full-time work), was 16.2%, up from 15.7% in March;
–The average unemployment spell is now just under 40 weeks, about 5 weeks longer than it was a year ago.
–The government sector continues to shed jobs, down 39,000 last month. Due to fiscal tightening, state and local governments, down 25,000 in June, have been shedding jobs since mid-2008 and are now down 577,000 since August 2008.
–Manufacturing, which was a bright spot a few months ago, has added almost no jobs over the past two months.
Look, I’m not trying to be unduly negative here. Obviously, a stall is better than the massive job losses that characterized the Great Recession. But if policy makers fail to recognize that our most pressing problem right now is job creation, they are a big part of the problem. We need them to be part of the solution.
What should they do? That’s for part 3.