No Hope for Unemployment
The Labor Department announced that the economy generated essentially no private sector jobs in May and unemployment fell largely because workers abandoned the labor force.
• Lest there be doubt, the Obama Administration continues to prove it can grow the government. May saw 412,000 new federal employees – largely Census workers and hopefully really temporary.
• This is a remarkably weak report, especially as compared to expectations. Payroll employment gains were weak across the board and the household survey – often a better indicator at turning points – showed job losses of 35,000.
• Despite the weak job numbers, the unemployment rate fell because workers abandoned the job market – the labor force fell by 322,000 in May.
This is the pattern one can expect over the remainder of the year. The economy is recovering but it remains at a low level of activity and employment. Jobs will continue to grow, but not fast enough to quickly compensate for the loss of over 8 million jobs during the recession. Discouraged workers and unemployment will remain stubbornly high.
The bottom line: The keys to the fall election remain jobs and debt. There are not enough jobs, and they are not being created fast enough. Higher taxes, huge deficits, protectionism, and heavy regulation are already failing to speed the recovery.