A Clear Warning From the Jobs Numbers
This week’s economic news was mixed, but the employment report on Friday was unmistakably weak. The economy added only 115,000 jobs in April, versus 154,000 in March and 200,000-plus in each of the three months before that. Even taking into account that unusually warm winter weather probably distorted the recent results, the underlying trend shows an economy that has been creating about 175,000 jobs a month — enough to keep the recovery crawling along, but too weak to appreciably raise hiring or wages.
Nor is it clear where more growth will come from. Manufacturing picked up last month, but activity in the larger service sector slowed. Recent auto sales were up, and home sales have been slowly, if fitfully, improving, but home prices continue to fall. Consumer spending, in general, rose in the first quarter, but it appears to be driven by people who are profiting from a rising stock market. Increased market volatility, like Friday’s 168-point drop in the Dow Jones industrial average, would make them nervous and less inclined to spend.
Election-year politics are bound to further confuse the economic picture and the way forward. On Friday, Mitt Romney blamed President Obama for the April jobs figures,saying that in a normal recovery “we should be seeing numbers in the 500,000 jobs created per month.”
The truth is that the economy has not seen job growth like that in nearly 30 years. More to the point, the policies Mr. Romney espouses — notably deregulation and tax cuts for the rich — were the favored policies under President George W. Bush, years when job growth and wage gains were, at best, anemic. And then the economy barreled into the Great Recession.
More deregulation and high-end tax cuts — along with the deep spending cuts Mr. Romney has endorsed in the House Republican budget — would mean less economic stability, greater inequality and fewer jobs.
Mr. Obama has called for sensible policies that would create more jobs, including infrastructure spending and aid to states to prevent layoffs and boost hiring among teachers and other public employees, but Congressional Republicans have blocked him at every turn. On Friday, Mr. Obama said that he would urge Congress “to take some actions on common-sense ideas” to boost jobs. There is no sign that Republicans are ready to see the light — especially when they see the weak economy as an election-year advantage.
The jobless rate dropped in April, from 8.2 percent to 8.1 percent, but the decline was caused by 342,000 people dropping out of the work force. A smaller work force means even slower growth.
Without further government help — especially more aggressive spending to boost demand — the economy simply does not have the momentum to heal itself any time soon. Millions of today’s unemployed and underemployed Americans will pay the price for the rest of their lives, in lost earnings, lost homes and shattered retirement hopes.
This is no time for political game-playing or ideological posturing. Americans need help now.
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