The Bureau of Labor Statistics jobs report this morning reminded me of my reaction when the credits (finally) rolled on Clash of the Titans: “Really? That’s it? What a let down. Boring.”
Unemployment was virtually unchanged, with the U-2 rate up from 9.5% to 9.6% in August. In fact most of the unemployment figures didn’t move much from July to August. But they did move up. And the slight uptick across the board for unemployment is the first time figures have moved up since April. That recovery summer administration promised was a dud, a sign of slow growth, and failed economic policy in the White House and Congress.
While most numbers remained relatively letharically still, there were were three bigger shifts:
- A decrease of 323,000 of individuals who have been without work for 27 weeks or longer. Nevertheless, there are still 6.2 million long-term unemployed individuals, which accounts for 42% of the overall unemployment predicament.
- An increase in the number of “involuntary” part-time workers by 331,000 pushed those unable to find full-time jobs up to 8.9 million. This bumped the U-6 unemployment rate—a total that combines those looking for a job and those with a part-time job that want full-time work—up to 16.7%.
- A sharp cut in government employment of 121,000 jobs, with nearly all of those being temporary Census workers.
At the end of the day, the job situation is this: There are now 14.9 million Americans without a job… 23.8 million if you count the involuntary part-timers. Meanwhile the labor force participation rate has steadily declined from August 2009 to August 2010—falling from 65.6% to 64.7%. Though most figures are relatively unchanged, they are all still pretty grim. We may not be going backwards into a double dip, but is there that much of a difference between 1% growth and -1% growth?
While the numbers aren’t necessarily a sign of a lackluster fall ahead, they do show that the policies of extending unemployment benefits and trying to save the job market with stimulus cash haven’t worked out too well. Unless you want to assume some crazy multiplier and claim the stimulus has saved jobs, as the CBO recently estimated.
Of course, the CBO’s estimate was that the stimulus has increased the number of Americans by between 1.4 million and 3.3 million—which is a huge gap. There is a distinct problem with estimation methodology if your high-end is nearly double the low end. It means that many of the numbers going into the calculations are not precise. It also does not take into account how many jobs the private sector may have made during the same time frame had the stimulus not been crowding out private investment. The baseline assumption is that without the stimulus money, there would have been no jobs created during that time. It is all a matter of hypothetical, but if the stimulus has really crowded out somewhere close to Robert Barro’s $900 billion in private investment estimate, then the private sector may have created just as many if not more jobs as opposed to the stimulus.
One thing is certain, what jobs the private sector could have created in the past year would have been, on the whole, more sustainable. The government is really good at creating short-term jobs, like census workers and road builders. And they are good at creating long-term bureaucratic work on federal payrolls that have little accountability and spectacular taxpayer paid pension plans. What they have not proven good at yet is building stable, sustainable, private sector job growth.