The dismal August employment report is a particularly depressing way to go into the Labor Day weekend.
“They approach the issue of economic growth as if it’s a bill, it’s a piece of legislation, it’s a program, when it fact it is a philosophy.” — Douglas Holtz-Eakin, former CBO Director, speaking of the Obama Administration on CNBC’s Squawk Box program September 2, 2011
This morning, the Bureau of Labor Statistics that the economy created zero net new jobs in August, far below an already weak estimate of 75,000 jobs. Job creation is generally thought to need at least 225,000 (give or take 25,000) jobs on a monthly basis to keep up with population growth and thus lower the unemployment rate. (Late yesterday, rumors of estimates below 75,000 jobs were partly responsible for the afternoon stock market sell-off.)
The combined revisions for June and July were negative 58,000 jobs, meaning the total job change reported today is a negative number.
The early stock market reaction was sharply negative, aiming for the Dow Jones Industrial Average to start the day down 200 points. Perhaps more important than stocks is the action in the bond market where the federal government’s 10-year note is trading around 2.04%, in position for its lowest closing yield in decades. (The note had traded at a slightly lower yield in the past few weeks, but never ended a trading day at a yield this low or lower.) Early on Friday, Gold is up about $50, at a new record high around $1880/ounce. On the other hand, fears of a double-dip recession are hitting oil and copper prices, with October oil futures down about $3, trading around $86/barrel.
A substantial reason for the weak number in August was the strike at Verizon, which took about 45,000 workers off payrolls. However, this number was already factored into analyst estimates.
Health care gained about 30,000 workers, with other modest gains in mining, professional services, and temporary help services offsetting the striking Verizon workers and a loss of 17,000 government workers to get to a net change of zero for the month. Employment by local governments has declined 550,000 jobs in the past three years.
This report provides a high-tension backdrop for Wednesday’s Republican debate and Thursday’s “jobs speech” by Obama. The Republicans will have one of the biggest targets ever to aim at; it will be interesting to see whether they primarily direct their fire at Barack Obama or at each other.
Here’s a preview of Wednesday:
Rick Perry: My state leads the nation in job creation while Governor Romney’s state was 47th in job creation…but our real problem here is Barack Obama’s total lack of understanding of business.
Mitt Romney: Governor Perry inherited a state with no state income tax, and I applaud him for not changing that. I inherited a state dominated by liberals and improved it. Beyond that, however, Rick was in office while other people created jobs while I actually created many thousands of jobs in the private sector. He’s the spectator; I’m the player.
Jon Huntsman: My tax reform plan, which was endorsed by the Wall Street Journal last week, is the best job creation proposal anyone has put out. And please don’t ask me about civil unions again.
Rick Santorum: Why isn’t anyone asking me a question?
Then comes Barack Obama’s Thursday night offering, the latest speech in a presidency full of sound and fury, signifying nothing. He’s already poisoned his speech by outsmarting himself regarding speech timing, now going on the air in a time slot that must have Speaker of the House John Boehner (R-OH) smiling: 90 minutes before the kickoff of the first game of the NFL season, and at a time (7 PM Eastern) during which essentially nobody in the western half of the country will be watching.
Why would the president put himself in this position when he could speak any day at any time and probably get a bigger audience than he will on Thursday? Because he knows that the optics of his speech, namely lecturing Congress, is more important than the content which will likely include nothing particularly unexpected or inspiring. Barack Obama has already shown that his 2012 campaign strategy will be to run against Congress since he can’t run on his own record. He’ll blame Congress for not passing legislation, for not focusing on jobs, hoping that Americans don’t notice that the Republican House of Representatives has passed “Cut, Cap, and Balance,” a repeal of Obamacare, and a responsible budget, whereas the Democrat-controlled Senate has passed nothing of importance.
Obama will, in his angrier-than-Clintonesque way, wag his finger at Congress, making sure that his media people get dozens of photographs and video clips to use in future campaign commercials.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?