The new jobs report cast some cold water on Vice-President Biden’s stimulus victory lap. The unemployment rate for men broke 10 percent last month. Top administration economists predicted that the stimulus bill would cause the unemployment rate to level off at 8 percent; instead it is 9.7 percent. The labor market is unlikely to turn around this year, as the number of hours worked remains flat. Companies are likely to increase the workloads of existing employees before they start hiring new ones.
Teenage unemployment hit a record high, breaking the 25 percent barrier for the first time ever. This is the first jobs report that measures the July minimum-wage increase, and economic literature shows that teens bear the brunt of the minimum wage. It’s not surprising that a minimum-wage increase in a recession resulted in a record unemployment rate for teenagers.
The only good news in this jobs report is that the rate of job losses has slowed from the first half of the year. I believe the recession will turn out to have officially ended this quarter, but the administration’s economic policies will make the recovery of the labor market painfully slow.
— Rea Hederman is assistant director of the Heritage Foundation’s Center for Data Analysis, where he is also senior policy analyst.