As Bob Stein explains below, the August jobs report, released this morning by the Bureau of Labor Statistics, was disappointing — just 142,000 jobs were added, and the labor force shrunk slightly. This is not atrocious, but it’s disappointing because the labor market had had a strong six months, with more than 200,000 added per month and the labor force holding steady. Bob also makes an interesting point about how unreliable August reports have been, and it’s possible with revisions, which can easily be in the range of tens of thousands of jobs, that this report won’t look too bad at all.
But the news has still prompted a couple lame apologias from the liberal economic class. Here’s Jason Furman, who’s the head of the president’s Council of Economic Advisers:
One obvious problem: The years prior to this current jobs-growth streak involved losing millions upon millions of jobs. The years prior to November 1996 . . . did not. (Mid 1995 to 1996 did see about one year of slower jobs growth — on the order of 200,000 or so jobs added. That used to be what we called “slower.”) Now, of course, there are reasons why merely repeating the late 90s performance isn’t so bad — e.g., the 1990s saw a labor force growing for demographic reasons, while now our population is aging. But if this is the best the White House has in a weak month, to say that we’re seeing jobs growth unseen since before the Patriots had won a Super Bowl, this recovery is pretty weak.
Something similar comes from Vox’s Ezra Klein, who suggests he has “a much more encouraging way to look at the jobs report.” He points to this tweet, from estimable health-care reporter Dan Diamond:
So today wasn’t a great jobs report. But graphed against past 6 years, things look a little better: pic.twitter.com/3MjWNu3IWh— Dan Diamond (@ddiamond) September 5, 2014
Klein does say, “Now you can go to [sic] far with this kind of thing: the economy was always going to recover, and the question with any recovery is how fast it happens. In this recovery, the line has not climbed nearly as quickly as we hoped.” Well, yes — that’s the entire point. Today’s jobs report is like what we’ve seen most of the recovery, and it was bad.
The economy was going to start adding jobs again, and it hasn’t done so very quickly at all. That chart (deployed to destroy the myth of the jobs-killing Obamacare by another Vox writer the other day) tells us nothing useful about the nature of this recovery, except that it has happened. For that one encouraging chart, I could come up with five others that, devoid of context, would make this look like basically no recovery at all — wage growth, labor-force-participation rate, employment rate as the share of the population, median net worth, median income, etc.
Klein goes on to point out one piece of further context that makes us look good: American employment, he says, “has been steadily climbing, and there are plenty of other countries — including much of Europe — that are mired much further down that curve.” This is correct, but that’s not because we’re doing anything right — it’s because we didn’t do anything so dumb as joining a currency union without a common fiscal policy and regulating our labor markets into ruin. (Indeed, in another post this morning, Klein seems to agree that we’re not actually doing much to help this recovery along.)
It’s possible that this morning’s news will be revised away, and that the employment picture will continue to improve at an above-trend rate. That would be, in the context of this recovery, great news for American workers. It still wouldn’t make this entire recovery, in context, good news.