Still Waiting on That Recovery Summer
Let me take a few minutes off from the Shutdown Diaries to get to Mollie's overview of today's jobs report. Private sector job growth was +57k, down from +73k in May and the boffo +241k in April (which now seems a distant memory.) I think those of us who would like to see smaller government have to accept that this means the headline number for employment is going to look a little more anemic, and you're better off focusing on the private sector numbers.
Still, the report had a large upswing in newly unemployed (+412k in workers unemployed less than 5 weeks.) It will be very interesting to see how that wave finds the job market. Those unemployed longer than six months is beginning to feel the bite of self-blame and the fear that they need new job skills or lower job aspirations. When I worked on research on elections and jobs, the short-term number was the one that influenced political moods. After a while, you stop blaming others and start blaming yourself. (I haven't read research in that area for more than a decade now, so perhaps someone can update my view on this.)
More than a third of unemployed workers have been on the bench more than a year, reports the Wall Street Journal. Planet Money has a nice chart site for this. Temp jobs are harder to come by, down 19,000 since April. The economic angst Mollie expressed is very real here in the Midwest as well, and my own area's economy still has lots of shakiness. And we are not one of those areas where home prices soared and dove. We felt the shock anyway and the temporary buzz of manufacturing that happened in the second half of 2010 is now just a memory.
The payroll hours and wages data are also disappointing, and I think they point to a very bad GDP report a few weeks from now. All this will make this yet another "recovery bummer".
(Shameless self-promotion: I do a business and finance radio program in the Twin Cities on Saturdays, 9-11am. This will be the first topic tomorrow.)
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Re: Still Waiting on That Recovery Summer
King, in a thread earlier today I predicted that this is the overture to a double-dip recession. Of course, I'm a total ignoramus and have no business making predictions like this, but the same doesn't apply to you at all! So, what do you think? Will the next GDP numbers show low growth, high growth, or no growth? And are we on the edge of a double-dip, or should I hang up my predictors hat?
Re: Still Waiting on That Recovery Summer
Rob, I've been against the double-dip throughout 2010 and 2011 -- I think 2013 is the Year of Reckoning -- but we go slowly through the rest of 2011. Presidential election years with incumbents running for re-election are usually faster growth, but if Congress succeeds in limiting spending that isn't going to happen either. I'd say instead we're vulnerable -- we could get by if no negative shock happens I think, but we're probably one good hiccup away from a second dip.