Our ‘walking pneumonia’ economy is not making any real progress in terms of an improving labor market in the United States.
Consensus estimates for this report had an increase of 105k jobs with many economists recently revising their estimates higher to 125k. Their ‘guesstimates’ were not close as the non-farm payroll report released at 8:30am reflected an increase of a mere 18k jobs with downward revisions to the prior two months of 44k jobs.
Were there any hidden gems in the report? Not a one.
The unemployment rate moved higher to 9.2% from 9.1%. That increase was NOT due to an increase in the number of people looking for work but an actual increase in the number of people who lost jobs. Consensus estimates had the rate remaining steady to perhaps moving down to 9.0%.
The average workweek declined by .1 hour to 34.3 hours. That piece of data does not indicate any buildup in terms of orders.
Hourly earnings were flat vs an expectation of a .2% increase. The lack of any growth in wages will not help personal consumption and retail sales going forward.
Private payrolls did increase by 57k jobs but that was nowhere close to the expected increase of 125k jobs. Public payrolls declined by 39k.
What to make of this report?
For those who would want to make the case that the economy is in the midst of a double dip, this report adds significant fuel to that fire.
I would add that as the ‘sugar high’ provided by Uncle Sam and his sidekick Brother Ben (Bernanke) wears off, the natural state of the economy continues to be weighed down by the ongoing burden of private and public debts. While Washington tries to surreptitiously enact programs to devalue and/or restructure these debts, the weight of them continues to be a massive drag on the economy.
Does unemployment matter? Of course it does, although if we were to listen to Obama adviser David Plouffe we might not think so. What is this guy thinking? As The Hill recently reported, Top Obama Adviser Says Unemployment Won’t Be Key in 2012,
President Obama’s senior political adviser David Plouffe said Wednesday that people won’t vote in 2012 based on the unemployment rate.
Really? He’s an adviser? Our President may want to seek a little different advice.
The Obama campaign’s hope is that voters will feel the economy is improving in the fall of 2012, just as they did when Roosevelt and Reagan were reelected.
Remember, a basic principle of ’sense on cents’ is that ‘hope is a lousy hedge’.
That seemed to be at the root of Plouffe’s remarks on Wednesday, as quoted by Bloomberg.
“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” Plouffe said, according to Bloomberg. “People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ”
Plouffe does not seem to appreciate that ‘people vote their wallet’ and that first, last, and always, “it’s the economy stupid!!”.
Today’s report once again highlights that our ‘walking pneumonia economy’ continues to struggle.