Zero Job Growth Latest Bleak Sign for U.S. Economy – the article, titled that, is published in New York Times today.
As it seems, August brought no increase in the number of jobs in the US, as Obama promised. According to NY Times, this is a signal, that the economy has stalled and that inaction by policy makers carries substantial risk.
The government report on hiring, released on Friday, prompted another round in a relentless diminution of economic expectations. The unemployment rate, at 9.1 percent, did not change last month, and the White House said it was expected to stay that high through at least 2012.
Also, the U.S. Bureau of Labor Statistics (BLS) revised July’s job gains downward – from 117,000 to 85,000.
This lack of job growth – which comes after ten straight months of modest employment gains – left the U.S.
unemployment rate unchanged at 9.1 percent. Meanwhile the “underemployment” rate – a broader, more accurate measure of joblessness – ticked up from 16.1 to 16.2 percent.
But even with the national unemployment rate holding steady at 9.1 percent, James Bianco at Bianco Research said there is little good news in the latest government report.
"Even if you account for the Verizon strike, which was 48,000 workers, and sort of added that back in, it's still not a good number. It paints an economy that is decelerating and it paints a job market that continues to slow dramatically over the summer," said Bianco.
According to experts, The economy needs to create at least 150,000 jobs a month just to keep up with gains in population – which it clearly isn’t doing. As a result, a total of 14 million Americans are currently unemployed – including 6 million who have been without a job for more than 27 weeks.
As Fitsnews mentions, for U.S. President Barack Obama, the job report is positively awful news. In promoting the passage of his so-called “stimulus” bill in 2009, Obama’s economic advisors claimed the measure would keep U.S. unemployment below 8 percent. That clearly hasn’t happened … in fact, with the exception of February and March of this year, the unemployment rate has remained above 9 percent since the recession “ended” in June 2009.
The payrolls numbers were also distorted downwards by industrial involving 45,000 workers at Verizon Communications who were classed as being unemployed while they were on strike, remarks Euronews also.
There is some consolation for the White House from the fact that although hiring cooled, in August there is little sign companies have responded to the darkening economic outlook by laying off workers.
But President Obama needs job growth to stimulate the economy and help get him re-elected next year. The US needs to generate 150,000 jobs or so each month just to keep the unemployment rate steady over time.
He will lay out a new job creation plan in a speech before a rare joint session of Congress next Thursday.
U.S. stocks fell on the weak jobs report – as did nervous markets from Asia to Europe.
In Italy, where top economic experts gathered Friday to talk about the prospects of a global recovery, the assessments were predictably grim.
Nouriel Roubini, an economics professor at New York University, said, "I do not expect a global recession, I do not expect a recession in fast-growing emerging markets, but the economic data from the United States, from most of the eurozone, from the United Kingdom, suggests that we may have an economic contraction."
Economists say slow growth in the U.S. and the debt crisis in Europe has dramatically increased the chances of another painful downturn.
According to Voice of America, that puts even greater pressure on Washington, where President Barack Obama will announce a major jobs initiative on Thursday, September 8 before a joint session of Congress.
Gene Sperling, director of the White House National Economic Council, said the president's proposals are significant and deserve bipartisan support.
"People will see that in the areas he discusses, on tax cuts for workers and small businesses, strategies for the unemployed, jobs to rebuilding America, that these are the types of things that have been historically deserving of bipartisan support," said Sperling. "And we're going to hope very much, and he's going to urge Congress very much, to put partisanship and politics to the side, and put the economy and workers to the front."
And car buyers lifted U.S. sales last month also. As Business Times writes, analysts had expected a weaker August because of anxiety about the economy and Hurricane Irene, which forced many dealers to close during the month's final weekend.
The manufacturing sector managed to expand in August for the 25th straight month. Last month's growth, though modest, defied fears that manufacturing, one of the economy's few sources of strength, had contracted last month.
Meanwhile, fewer people applied for unemployment benefits last week, a sign that layoffs have eased a bit, mentions business edition.
The economy's weakness was underscored Thursday by the Obama administration, which estimated that unemployment will average about 9 percent next year, when President Barack Obama will run for re-election. The rate was 7.8 percent when Obama took office.
The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.
Next week, Obama will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth.
Discussion about this post