Alright, the new job numbers for June are in.... and although they weren't as bad as we warned they could be, they were still pretty disappointing. Some estimates were that we could have added upwards of 170,000 jobs, to which we ask 'WTF were you thinking?'... As usual, it ended up in the middle. Of course, the possibility that those numbers will be adjusted down are distinct. It happens a lot.
First, a point of personal privilege... I commented on this on a Facebook page yesterday, relative to a couple points I made from my post before it came out. I think some guy who is a retired IBM'er spent about an hour to comment on how forecasters plan well ahead, not month to month relative numbers. Here is my response: Uhh, I commented while at work, so the time to fully comment on all I know about how decisions like this are made is impossible, and quite arrogant. I don't have the time to explain all I know, and it's kind of talking down to others to comment that way. In short, you didn't tell me anything I didn't already know - go back to the golf course and enjoy your retirement!
Yes, the economy is still sputtering along, and nowhere near the rate of creation needed to spur recovery and affect unemployment in a positive way.. We're stuck still at 8.2%, which is bad news for Barack Obama - he's still .1% up from April... Some say that number will fall despite the lack of jobs , due to the dropping of millions from unemployment payrolls who have exhausted their benefits. We're not sure about that. People not drawing benefits are still included in the numbers - as long as they are still seeking work. If they give up, then they don't count - but few actually give up...
Still, the environment to discourage people is there... The road to employment is a lot like highway traffic - everyone is moving along on the available lanes. If the lanes available (jobs in demand) is enough for the cars driving on it (worker supply), then traffic moves along smoothly. However, close one or two of the lanes (layoffs), and a massive traffic jam ensues. Some get stuck in the wrong lane (underemployment), some get cut off (too much competition) - and some just get off the road altogether. This is a terrible time for high school, college students and recent grads. The gigs they usually get are being taken by adults who have to do something to make money. Survival of the neediest...
If 80,000 jobs a month continue to be the norm - about 40,000 less than is needed just to keep up with population growth - the traffic jam will only get worse. That closed lane needs to be freed up. Tax policy needs to be simplified, and set on a long term path so businesses can actually make long-term plans. The final decision on Obamacare might assist in that as well, but we don't think American Business has a real grasp on the actual costs involved, so we have our doubts. DC hasn't shown a willingness to do that, so we don't see any improvement in the job market at least until 2013 - or later. Washington is the construction crew that has the lane closed, and Tony is sitting in the truck, munching on a donut right now - all while the cones blocking the lane are firmly in place...
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