The economic indicator that hits closest to home lurched farther into negative territory, according to the Labor Department. They announced that unemployment has now hit a 26-year high of 8.9%, extending a streak of record-busting reports over the last six months. The BLS tried mitigating the news by showing a decrease in joblessness claims, but that’s because of one particular employer:
U.S. employers cut 539,000 jobs in April, the fewest since October, according to government data on Friday that signaled the economy’s steep decline may be easing.
However, the Labor Department said the unemployment rate soared to 8.9 percent, the highest since September 1983, from 8.5 percent in March. Payrolls figures for March and February were revised to show job losses were 66,000 more than previously reported.
The administration will hammer on that 539,000 number in order to show progress, but that’s deceptive. The loss in private-sector employment actually came to 611,000, more than the 590,000 jobs anaylsts expected. How did they get to 539,000?
Losses in April were tempered by a big 72,000 jump in government payrolls and overall, private sector employment fell by 611,000 last month.
Governments used stimulus money to hire workers in April. Most of those jobs are on “shovel-ready projects,” and won’t be permanent employment, while the rest will expand bureaucracies needed to manage those jobs. More to the point, all of those jobs cost American taxpayers, including the unemployed, to maintain. That doesn’t create wealth and opportunity as much as it sucks both out of the market, and allow politicians to claim credit for growth that doesn’t exist.
We’re remaking the WPA, not reducing unemployment. Since government is the least efficient way to transfer resources to people and projects, we’re going about this in a manner guaranteed to prolong the agony rather than end it, just as FDR did during the Great Depression. We need capital to flow back into the market rather than into the Beltway, and we need to build investor confidence rather than threaten them with “madman theories of the presidency.”
Update: I’m hearing that 66,000 of the 72,000 government jobs were temporary positions with the Census Bureau. If anyone has a cite for that, shoot it over to me.
Update II: HA commenters come through with several cites on the Census jobs. I’ll go with the CBS Marketwatch link, for an argument-against-interests cite:
Government added 72,000 jobs, mostly temporary census jobs. State and local governments added 6,000 jobs, despite widespread accounts of layoffs.
Prosperity through beancounting!