No Change In Jobs Report Equals Bad News

The latest jobs report changes nothing. We had no engine of economic growth when we all woke up on Friday morning, and we still don't have one. We have no operative plan to fix what ails us. We are in a bad place and sliding toward a worse one.
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The latest jobs report changes nothing. We had no engine of economic growth when we all woke up on Friday morning, and we still don't have one. We have no operative plan to fix what ails us. We are in a bad place and sliding toward a worse one.

The Republicans are banking on continuing economic disaster as their pathway back to the White House, sabotaging any and all efforts to address the decline. The Obama administration is so beaten up and despondent that it has apparently convinced itself that the Oval Office confers no authority to address the unraveling of American middle class opportunity. A modest nudge downward in the unemployment rate, from 9.2 percent to 9.1 percent, changes this narrative not one bit.

Indeed, it stands as testament to the dismay that has characterized thinking about the economy in recent weeks that a jobs report that presents little change in any key area managed to register as good news on Friday, sending investors into paroxysms of buying.

Before the Labor Department released its snapshot of the job market, the rest of the week had been unsettling to say the least. A slew of lousy data -- a pullback on the factory floor, still-elevated new claims for unemployment benefits, and a fresh decline in consumer spending -- had combined to bring a chorus of worrying about a double-dip recession. (In many cases, the worriers are the same people who were talking about vigorous recovery back in early 2010.)

Meanwhile, the rest of the planet was looking weak, too. In Europe, for example, officials have been publicly fretting that Greece will still be unable to pay its debts, even with a second bailout. Spain and Italy could be next in line for rescues. All of this bad sentiment crystallized on Thursday to produce a global sell-off in stocks.

But in the schizophrenic view of the trader, Friday's jobs report fixed everything all up. The report that showed 117,000 net jobs added to the economy in July, not even enough to absorb new entrants to the workforce.

Not that we needed it, but here was another sign of the yawning gap separating the people who manage money from the people who actually work for it, depending on paychecks to pay their bills. The comfort in the markets came courtesy of a jobs report that repeated the words "little changed" with great frequency.

It is worth noting some of the things that stayed essentially the same: 13.9 million people are still officially unemployed, and 44 percent of them -- more than six million -- have been out of work for six months or longer. This at a time when 30 states are borrowing money from the federal government to keep paying regular unemployment benefits, and six states -- Michigan, Florida, Illinois, South Carolina, Arkansas and Missouri -- have rolled back the duration of unemployment checks.

Also pretty much unchanged: The number of people who are working part-time because they can't find full-time work, or because their hours have been cut, a group that numbered 8.4 million in July, according to the Bureau of Labor Statistics.

Ditto the rate of unemployment among African Americans, at 15.9 percent; among Hispanics, at 11.3 percent; and among teenagers, at 25 percent.

So the report was terrific news in the same way that we might celebrate when a very sick patient ignored by their doctor and showing no sign of improvement manages to get through the night without contracting anything worse.

The simple fact is that the economy is broken down. We used to be able to separate consumers -- whose spending amounts to 70 percent of the economy -- from workers. Even as wages stagnated for the vast majority of working people over the last quarter-century, Wall Street came up with gimmicks to get around this as a constraint on spending. We feasted on stock bubbles fueled by companies with no products but great stories that seemed to justify otherwise insane valuations. We enjoyed a real estate bubble boosted by exotic mortgages that allowed homeowners to turn extra value into cash.

But today consumers and workers are pretty much the same people, and at the moment that means declining fortunes for most Americans.

The only way to change that is to change the thing that didn't change on Friday: the fact that huge numbers of people are unemployed or anxious about joining those ranks, while our leaders are doing little to nothing about it.

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