In this morning’s press release on the employment numbers for May, the Bureau of Labor Statistics’ lead was “no change”: non-farm employment “changed little (+69,000)” and “the unemployment rate was essentially unchanged at 8.2%.” But little change in a severely depressed labor market is very bad news for workers. Even worse news for the Obama Administration is that the labor market so far in 2012 shows no sign of the turnaround he needs.
While it’s true that the increase in employment of 69,000 was not much below April’s increase of 77,000, it was 143,000 in March and higher than that in February. The unemployment rate’s increase from 8.1% to 8.2% can be viewed as essentially unchanged because it’s small, but if these figures hold up, the data still show 220,000 more unemployed than the month before.
Unfortunately, this bad news is likely to hold up because the same trends appear across lots of related indicators: the recently unemployed (less than 5 weeks) increased from 2.54 to 2.58 million; seasonally adjusted initial unemployment insurance claims rose by 10,000 (to 383,000, about where it has been stuck for the last 6 months despite the tightening of eligibility requirements by many States); the long-term unemployment rate (27+ weeks) increased quite substantially, from 5.1 to 5.4 million), as did the median duration of unemployment (from 19.4 to 20.1 weeks). Significantly, the rate of those working part-time but want a full-time job also increased, from 7.8 to 8.1 million. And to top it off, average hourly pay for non-supervisory workers has been flat at $19.70 (up 3 cents from March).
The problem, of course, is that while private sector employers have not been hiring at a pace that offsets the massive job destruction of 2008-10, austerity politics is actually leading to absolute reductions in government employment, and at an accelerating rate. Obama is in a tough spot, since even if employment picks up dramatically, the unemployment rate could continue to increase as millions of discouraged workers re-enter the labor force.
I woke up this morning and anxiously waited to get this report. I suspected it wasn’t going to be good. Too many things are happening in the States and around the world for there to be significant improvement in the job market, it seems to this non expert. The common wisdom is that this makes it so that Obama’s re-election is less likely. Perhaps this is true but it doesn’t make sense. All indications are if the U.S. followed the kind of policies that Romney and the Republicans advocate we would be in much worse shape, as the British experience reveals. Can an intelligent accounting of this make a difference? I hope so and will explore it in a future post.