The US still has a serious jobs problem

Obama can't breathe easy as the US economy remains moribund.

By Jonathan Berr Aug 3, 2012 1:14PM
July's unexpectedly strong jobs report, which sent the stock market into the stratosphere, is no cause for celebration, though it does offer reason for optimism.

The 163,000 increase in non-farm payrolls is partly due to the automakers laying off fewer employees than expected.  US auto sales should continue to be fairly strong because many people have held onto their cars for longer periods and many of these vehicles are showing signs of age.  General Motors and Ford Motor both generated strong earnings in North America in the last quarter that were overshadowed by losses in Europe.  Even with an expected slowdown, US auto sales are on pace to have their best year since 2007.

There were other positives, with professional and business services rising by 49,000,  leisure and hospitality surging by 29,000, manufacturing employment increasing by 25,000 while health care employment registered a gain of 12,000.  The average workweek was unchanged at 34.5 hours. 

Employment ticked up to 8.3% as the numbers of long-term unemployed, those out of work for 27 weeks or more, was little changed at 5.2 million. These people account for 40.7% of the unemployed.  Though the numbers of discouraged workers fell to 852,000, that figure is still extraordinarily high.
The economy is more or less creating enough jobs to keep up with population growth.  As Bill McBride noted in Calculated Risk, at this rate the economy would add around 1.9 million private sector jobs in 2012, less than the 2.1 million it added in 2011.  That means that odds are strong that unemployment will remain at 8% at the end of the year. 

Of course, this is bad news for President Barack Obama's re-election effort. Republican challenger Mitt Romney has repeatedly hammered the incumbent for the stubbornly high unemployment rate.  Obama's retort that he has done the best he could given the cards he was dealt -- the worst economic crisis since the Great Depression -- isn't much of an counter argument even if it happens to be true.  Romney has thus far made a compelling argument that he would be a better steward of the economy.  Most polls show Obama with a small lead over Romney. Voter sentiment will change between now and the election, which will be among the closest in history.

This underscores a simple truth: The US has a jobs problem.  Congress needs to focus on that  issue and push other issues such as tax and entitlement reform to the side.

--Follow Jonathan Berr on Twitter@jdberr


 


 

 
5Comments
Aug 4, 2012 6:11PM
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We have over 3,000,000 unfilled, high-paying jobs RIGHT NOW.  But we don't have people with the skills to fill them.  In part, it's the fault of businesses who don't want to train employees.  But the biggest problem is that our education system, in the hands of politicians and educational leaders looking to make themselves look good by playing statistical tricks, pushed one lame plan after another, culminating in the abominable "No Child Left Behind" - better called "No Child Gets Ahead."
We pay up to $500,000 per year per person to house severely disabled Special Education children in boarding schools.  We don't spend a cent of the kids most likely to find a cure for cancer one day.  We hire extra math teachers so math-weak kids can "catch up" to a still low level.  But we spend virtually no money to make  sure our able kids have marketable job skills.  There's a severe shortage to trained auto repair mechanics and carpenters right now: but our schools can't brag unless more kids go to college: so vo-tech is out.  Our colleges graduate huge numbers in majors like psychology and phys. ed even though there are 5-20 grads for every available position available.  Meanwhile, math-oriented areas go short of graduates.  And our high schools don't hire that extra math teacher to make sure enough kids can handle accounting, chemistry, engineering and similar majors: it doesn't make the superintendents look better, so they screw them.


Aug 5, 2012 6:28PM
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free trade has created 25 million poor paying jobs.they have replaced the 30 million great paying jobs exported by american manufacturers.the rich thank you
Aug 5, 2012 10:52AM
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Not all JOBS which are advertised are being filled. Some employers are advertising and then NOT hiring anyone. Some jobs now require applicants to be multilingual - Spanish and Mandarin.
Some jobs positions which used to be able to be filled by people with job experience are requiring higher education degrees - for example, they want Sales people who have Engineering degrees and degrees in Business management, regardless of many years of experience....and they're paying about HALF of what they used to pay
Aug 5, 2012 10:43AM
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What specifically is Romney planning to do to create job growth?

Repealing all of the laws and regulations doesn't prove that this method will suddenly create millions of jobs.

Aug 6, 2012 1:55PM
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We have real problems in this country that ONLY CONGRESS can fix people !!! Obama cannot do anything without the US Congress ! Has any person on this board ever read the US Constitution? LMFAO . And the US Congress goes on a 5 week vacation! Whats that say about our LEADERS.... Republicans like Romney says more tax cuts to create jobs? LOL He will run the country like he did BAIN CAPITAL. Any Questions ?? Obama trys to do things but the day he walked into the White House the Republicans said they are going to do everything in their power to make him fail! LMFAO. Now thats the FACTS Americans if you do not believe it you are truly part of the land of the STUPID. So WE AMERICANS need to see the REAL story and facts ! We have wall street who has been running on NO SOUND investing principals ! They are looking for another welfare bailout from the FEDs ! The super low int rates have done nothing ! The so called job creators have not done their job with all their stimulus and tax cuts for the last ten yrs ! Wall street when the meltdown came in 08 wall street investors and big banks LOST  11 trillion out of this economy killing all our home values that we had in our homes ! 50 million Americans like me are underwater home owners who has never been late and owe more than our homes are worth ! YA and the US CONGRESS goes on a 5 week vacation ! ONLY IN AMERICA land of the free??? HOME of the TRULY STUPID...
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