New U.S. job statistics for August show the unemployment rising to 9.6 percent. The private sector added 64,000 jobs, but that was offset by public sector reductions and the wind-down of census hiring, which brought the total change in August to 54,000 jobs lost. What do these numbers mean? Are they good news or bad news? Just how despondent should we be?
- 'Treading Water': Not Double-Dip, Not Recovery The New York Times' Motoko Rich writes, "With businesses adding about half the number of positions needed simply to accommodate population growth — much less dent the ranks of the jobless — the unemployment rate ticked up to 9.6 percent, from 9.5 percent. 'The overall picture is one where the labor market is still kind of treading water,' said Joshua Shapiro, chief United States economist at MFR Inc. 'It’s better than sinking, but it’s certainly not surging ahead.' Given the continuing addition of private jobs, albeit at a tepid pace, Friday’s monthly snapshot of the labor market seemed to calm fears of a double-dip recession. But the numbers are likely to do little to assuage political pressure on the Obama administration in the run-up to the midterm elections."
- Bad, But Less Bad Than Expected The Economist's Ryan Avent explains, "The new figures, including revisions to June and July data, show employment growth that is indeed flattening, but by less than seemed to be the case last month. And crucially, key figures in the employment report did not reverse course in August as many had feared. Employment, ex-census, increased. Private employment rose, as well (and July private employment growth was revised upward). Firms didn't trim hours, as might have been expected based on the flurry of bad news. ... It should be possible to recognise that these improvements, in the context of the month that was August, are genuinely positive. I'm not sure that we're operating in a linear world right now. If firms become a bit more optimistic they may opt to boost hiring and investment, increasing consumer optimism, and feeding a virtuous cycle toward a more appropriate level of employment growth. If firms become a bit more pessimistic, then they'll hoard more cash, markets will fall, deflation fears will rise, and so on. This is, objectively speaking, a bad jobs report. But if you feel worse today than you did yesterday, you're not paying attention."
- ...But Still 'Sucks' Liberal blogger Duncan "Atrios" Black sighs, "The private sector number will be seen as good news as it is better than expected but it still, you know, sucks." He adds of the White House refusal to pursue further stimulus measures, "It's incredible to me that genius political strategists think that what voters really want are tepid and timid half measures."
- Slowing Decline Not Same as Improvement Economist Brad DeLong notes, "'Getting Worse Slowly' Does Not Mean 'Is Better'. ... We would need 9 X 120,000 = 1,080,000 net private sector jobs in the nine months since last December in order to be able to hold the trend unemployment rate steady. Things in the labor market are not getting worse quickly. But things in the labor market are far from better by any sane metric."
- We Can Thank the People Who Gave Up Economist Mike Shedlock writes, "The drop in participation rate this year is the only reason the unemployment rate is not over 10%. The drop in participation rates is not that surprising because some of the long-term unemployed stopped looking jobs, or opted for retirement. Nonetheless, I still do not think the top in the unemployment rate is in and expect it may rise substantially later this year as the recovery heads into a coma and states are forced to cut back workers unless Congress does substantially more to support states."