How will the Washington Post report the latest assessment of job losses in August? Earlier this week, the Post said that the expected loss of 228,000 jobs would give “strong evidence that improvement in the economy is finally filtering through to the job market.” Unfortunately for the Post’s attempts to spin a growth in unemployment from 9.4% to 9.5% as great news for the Obama administration, job losses were more than 30% above expectations, according to the Wall Street Journal:
Service-sector employment declined by 146,000 in August, while goods-producing jobs including construction and manufacturing fell by 152,000, according to Automatic Data Processing Inc., a payroll firm.
The combined loss of 298,000 jobs was an improvement from July’s revised drop of 360,000 and was less than half the pace of declines seen earlier this year. …
Still, many were hoping to see more of an improvement in August now that key sectors of the economy, such as manufacturing and the housing market, are showing some encouraging signs.
ADP tends to be slightly more pessimistic than the Bureau of Labor Statistics, so that number will come in a little lower in tomorrow’s BLS reports. Why? ADP only surveys private-sector jobs. As the WSJ notes, government has expanded its hiring by 2,000 each month this year, on average.
Regardless, the August numbers belie the notion that a significant recovery is upon us in the job market. The CBO made that plain enough for everyone last week, when it predicted net job losses throughout 2010. Economies do not recover through job losses, although they eventually recover despite them.
What is also plain enough is that the stimulus has done very little to stimulate, now more than six months after its passage. Joe Biden will make the mistake today of bragging about Porkulus rolling ahead of schedule, which should prompt people to ask — where’s the stimulus?
Vice President Joe Biden will claim Thursday that the $787 billion stimulus plan “is doing more, faster, more efficiently, and more effectively than we had hoped.”
In a speech planned to mark the 200-day mark since the American Recovery and Reinvestment Act took effect, Biden will say that $62.5 billion in tax cuts have been delivered, $1.9 billion contracts have been awarded to small businesses, and more than 10,000 transportation projects approved.
If so, then why has the money slowed? If Porkulus is ahead of schedule, then why haven’t we seen an economic stimulus? The President’s Council of Economic Advisers justified the spending of $787 billion on the prediction that it would create enough jobs to keep unemployment under 8%. We’re now heading towards 10% and above without a single sign that this massive spending has done anything but stimulate the government.
Update: Initial claims also didn’t decline as much as analysts predicted, and more bad news comes from the retailers:
The Labor Department said the number of laid-off workers applying for benefits dipped to 570,000 last week from an upwardly revised 574,000. That was a weaker performance than the drop to 560,000 claims that economists expected.
The number of people receiving jobless benefits totaled 6.23 million, up 92,000 from the previous week, which had been the lowest level since early April. Economists surveyed by Thomson Reuters had expected that number, which lags new claims by a week, to fall to 6.13 million. ….
Most retailers posted sales declines last month as shoppers restrained back-to-school purchases to focus on necessities. Discounters did better than upscale chains, but the results Thursday raised further concern about the upcoming holiday season.
I suspect the overall unemployment number may go higher than 9.5% tomorrow, as the Post predicted.