White House: Don’t “read too much” into unemployment numbers
The U.S. economy added a paltry 80,000 jobs in June, which isn’t even enough to keep up with population growth. Economists had expected that 90,000 or more jobs would be added, but private-sector job growth dropped, prolonging a trend that started early this year.
The unemployment rate remained at 8.2 percent. This is the 41st straight month we’ve been at 8 percent or higher. But Alan Krueger, chairman of Obama’s Council of Economic Advisers said in a statement that, “It is important not to read too much into any one monthly report. There are no quick fixes to the problems we face that were more than a decade in the making.”
He does have a point, the official employment number doesn’t tell the full story, as James Pethokoukis of AEI points out:
– 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%.
Approximately one-third of positions created in June were temporary service jobs. There were 821,000 discouraged workers in June. The unemployment rate for whites and Latinos stayed the same. Unemployment for black Americans rose to to 14.4 percent.
Fears of a serious slowdown in an already tepid recovery are real: In April, May and June the economy created 75,000 new jobs, while there were 226,000 new jobs created on average in January, February and March. This week we also learned that corporate profits declined last quarter, the first decline since the fourth quarter of 2008. Also, manufacturing shrank in June for the first time in nearly three years.
But don’t read too much into numbers.