Economy gains no new jobs in August

posted at 10:33 am on September 2, 2011 by Howard Portnoy
[ Fiscal Stimulus ]   

Barack Obama has accomplished many firsts in his presidency. He was the first sitting president to debase the office by appearing on late night TV, where for good measure he insulted the Special Olympics. He is the first president on whose watch the nation’s AAA credit was downgraded by Standard & Poor’s.

Now he can add to his record the dubious distinction of being the first president since World War II to preside over an economy where net zero jobs were created in a given month.

That’s the headline for the August jobs report, which brings with it the ominous possibility of dip number two in the recession.

Some economists had expected the report to show a net gain of 75,000 new jobs, which in itself would have hardly been a cause for celebration, since in order to return to the pre-recession unemployment rate the economy needs to add a quarter million jobs a month for five years.

The weakness in the jobs report was underscored by revisions to the employment data for June and July. Collectively, those figures were lowered to show 58,000 fewer jobs added. The downward revisions were all in government jobs.

Reacting to the report, market strategist Liz Ann Sonders of Charles Schwab in San Francisco said:

We’re in this very flattish-type phase. The only relatively good news, and I would emphasize ‘relatively,’ is we’re not in firing mode, not in a job-loss mode. We’re in an extraordinarily slow job-gain mode.

The unemployment rate outwardly held at 9.1 percent. But when you add in the legions of the unemployed who have stopped looking for work, the number rises to 16.2 percent, tying the yearly high. Overall, the number of people “marginally attached to the labor force”—meaning workers not included in the unemployment count because they had not sought work in the past four weeks but have looked in the past year—rose from 2.4 million to 2.6 million.

If there is any comfort to be had, it is in the knowledge that the White House is “on the case.” As the president told NBC’s Brian Williams in August:

Well, look, we—we anticipated that the recovery was slowing. The economy is still growing, but it’s not growing as fast as it needs to. I’ve got things right now in—before Congress that we should move immediately. And I’ve said so before I went on vacation, and I’ll keep on saying when I—now that I’m back.

Before you get all excited about the president’s solution, it is worth noting that the above comment was made in August of 2010.

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