JOBS REPORT: NOT A PRETTY PICTURE
It’s becoming more and more clear that the government has failed in its efforts to create a sustainable private sector recovery. The monetarist bank bailout has failed to create the economic recovery that Ben & Co. said it would generate. This morning’s job’s data is just one more piece of evidence that shows the private sector remains weak at best. We’re now almost two years since the peak in the credit crisis and the greatest government intervention in US history and we can’t even generate 100K+ jobs at the private sector level per month. Via the AP:
“Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months.The Labor Department says companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate. The jobless rate was unchanged at 9.5 percent.
Overall, the economy lost a net total of 131,000 jobs last month, as 143,000 temporary census jobs ended.
The department also says businesses hired fewer workers in June than it previously estimated. July’s private sector job gains were revised down to 31,000 from 83,000. May was revised up slightly to show 51,000 net new jobs, from 33,000.”
It would be unwise to overreact to this news, but it’s certainly disheartening for those who are looking for a job or those who are looking for an economic recovery to actually materialize. The duration of this recession in the labor market is truly depressing.
(image via chart of the day)
There is the problem. Why are people looking for the government to create economic receovery in the first place? Isn’t this US, the land of the free, where everybody is out for themselves? You cannot have it both ways – all profits for yoruselves in good times and all losses/problems to the govenment in bad times.
ES,
Can govt not promote private sector growth? What if they had implemented a $1T tax cut as opposed to bailing out the banks? Do you think that would have had a substantially different impact on small business and main street? I certainly do.
Govt controls the money supply and therefore controls a large portion of economic growth. It’s a reality that the govt can and does promote private sector growth. Of course, if they initiate policy that results in misallocation of resources (for instance, putting money in the pockets of bankers) then the results speak for themselves….The truth is, we work in partnership with govt to achieve goals – not against one another.
So, what next? Do you think another round of QE is round the corner?
Sure and it will be as worthless as the first round of QE. I’ll write a piece on QE over the weekend. It’s time to totally debunk this myth that QE is even remotely beneficial….You just have to love how people keep turning to this failed Fed for answers. What will Ben do next? How will he save us now? When will people wake up to the fact that his policies have not saved us. They have saved the banks and that’s it. His save the banks policy has not trickled down. It has failed. End of story. When will people starting getting the message?
TPS, you are right , of course, in theory. But in practice, the government is so inpet. Whatever they try to do, they usually do it at 5 times cost and very slowly. I wish people relied on the government less and didn’t expect the government to fix everything, because it can’t. It only wastes our resources in the processes. Government should be kept to do simple tasks, everything that is complex, like economy, they simply cannot handle (see USSR, where I grew up). And the government should be stright about it – they cannot fix the economy, they can only help a little bit. Instead we are getting this lip service from politicians about the jobs they created while they waste even more resources and time. Honestly, what people expect the govenment to do? You are as smart or smarter than any government official.yes people looking at the govenment, not you to do something.
To fix US economy at this point is a herculean task , it requires sucrifice on everybody’s part, i.e. lower standard of living, shrinking of suburbia, but is anybody talking about it? Not at the govenment level, they just keep telling people what they want to hear. And “the people” are collectively expect the govenment to come up with some miracle to save us all , while no sucrifices or efforts are required on their part. It doesn’t work this way. You cannot get something out of nothing, other than fiat currency. And we’ve already been trying the fiat currency / monetarist cure for last 2 years. It is not working.
The buy the dip trade is back with a vengeance. Buy every single morning dip. You can almost guarantee a higher close. Everyone wants in on this market regardless of the data.
TPC is right, the correct responses to economic problems by gov’t would help….its just never been done…..alittle closer to “correct” would at least be an improvement….30% of a stimulus to keep states afloat is not a stimulus….the multiplier is next to zero……send them some TPC notes by the button, but don’t call it stimulus…….geez rebuild some of these crumbling bridges…..shovel-ready? …. we are 1/2 way into the same length of time it took to rearm, reorganize and win a world war.
its an oxymoron: gov’t and correct responses……..its a fact that might get a little better if we demand it,but will never appreciably change.
who was clamouring for a rate hike and home loan oversight at the height of the beer party?……..next to no one.
never will be….its intrinsic human nature…..just like u chase what runs from u and run from what chases u.
There shouldn’t be any surprise to a terrible jobs report unless you subscribe to the media’s constantly pushing a recovery and a need to buy stocks. QE2 just around the corner? Probably. The game will played out for some time to come as the economy continues to fall apart.
All I can say is, thank goodness JP Morgan informed us of how inline to good the numbers will be today. I mean, I don’t know about you guys but a June revision of -220k is bullish to me!
http://3.bp.blogspot.com/_Lk_7fZLagU4/TDst8rnXzbI/AAAAAAAABq0/pJqY0fT_T8I/s1600/kool-aid.jpg
Drink up boys!
I read somewhere a pretty good idea for promotion of domestic jobs. Raise taxes for those companies that outsource.