The unemployment numbers for May hit earlier this morning, and it looks like Barack Obama didn’t save many jobs at all. Despite claims from both Obama and VP Joe Biden that the Porkulus package had saved 150,000 jobs, unemployment went up another half-percent to 9.4%, setting a new record for the past quarter century. Unemployment rose across a broad spectrum of demographics, too:
Nonfarm payroll employment fell by 345,000 in May, about half the average monthly decline for the prior 6 months, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The unemployment rate continued to rise, increasing from 8.9 to 9.4 percent. Steep job losses continued in manufacturing, while declines moderated in construction and several service-providing industries.
The number of unemployed persons increased by 787,000 to 14.5 million in May, and the unemployment rate rose to 9.4 percent. Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has grown by 4.5 percentage points.
Unemployment rates rose in May for adult men (9.8 percent), adult women (7.5 percent), whites (8.6 percent), and Hispanics (12.7 percent). The jobless rates for teenagers (22.7 percent) and blacks (14.9 percent) were little changed over the month. The unemployment rate for Asians was 6.7 percent in May, not seasonally adjusted, up from 3.8 percent a year earlier.
The AP has more of the details. This time, even government workers felt the pinch, after a blizzard of hiring in April:
Job losses — while slower in May — were still widespread.
Construction companies cut 59,000 jobs, down from 108,000 in April. Factories cut 156,000, on top of 154,000 in the previous month. Retailers cut 17,500 positions, compared with 36,500 in April. Financial activities cut 30,000, down from 45,000 in April. Even the government reduced employment — by 7,000 — after bulking up by 92,000 in April as it added workers for the 2010 Census.
A month ago, I asked in an AIP column whether Porkulus was irrelevant, considering the lack of response to unemployment. Dr. Christine Romer prepared the administration’s battle plan in January to get a massive stimulus plan in place immediately after taking office, and the economic adviser to President Obama warned of massive unemployment without the stimulus. In fact, she predicted it could crest at 8.8% if no action was taken (page 5):
The U.S. economy has already lost nearly 2.6 million jobs since the business cycle peak in December 2007. In the absence of stimulus, the economy could lose another 3 to 4 million more. Thus, we are working to counter a potential total job loss of at least 5 million. As Figure 1 shows, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0 percent, which is well below the approximately 8.8 percent that would result in the absence of a plan.
Innocent Bystanders updated Figure 1 in May to reflect unemployment with the $787 billion Porkulus in place:
They now have a new version with the May numbers; be sure to check the graph out at the link above.
Not only has unemployment not followed the predicted dark blue line after passing the Obama/Pelosi Porkulus package, we have actually exceeded the boogeyman light blue line for unemployment. We are heading towards double-digit unemployment and doing that while we incur the massive debt of the unstimulating stimulus package. We could just as easily have kept the money and ridden out the unemployment, much as we’re forced to do now, only being a lot poorer while doing it.
Why is this important? It demonstrates that the President and his economic advisers have gotten pretty much everything about this economic collapse wrong. Instead of contracting government spending and shoring up the credibility of the currency, they’re setting records in dissipating it instead. Instead of focusing on fixing the problem that government explicitly created — mortgage-backed securities — they’ve literally left that for last while they waste money chasing every Democratic constituency but ignoring the actual cancer in the financial system.
The people that brought you the original version of this graph have no business leading the economic policy of the US government, and we’ll be paying for their mistakes for decades.