Contrary to the Bush Administration’s election-year
fantasies projections, our Bushian economy–an economy that has created more jobs in debt collection agencies than in the whole of the manufacturing sector combined–may be topping out.
Firms add 112,000 jobs, far fewer than expected, keeping the jobless rate at 5.6%. Analysts differ on whether the recovery is weakening or pausing.
By Peter G. Gosselin, LA Times Staff Writer
WASHINGTON — U.S. employers sent a shiver through the political and financial worlds by adding only 112,000 net jobs in June, less than half what had been expected and too few to budge the nation’s 5.6% unemployment rate.
The Labor Department’s announcement Friday of the weak jobs showing left President Bush seeking to put a positive spin on the news before a gala White House gathering called to showcase what aides and economists had thought would be closer to a net gain of 250,000 jobs.
Coming only two days after the Federal Reserve started nudging short-term interest rates higher to protect against economic overheating, the employment report convinced some investors that the economy might not be all that strong after all. They reacted by pushing long-term interest rates, which are set by the marketplace, to two-month lows, betting that the disappointing numbers might relieve the Fed of having to push interest rates up quickly. Stock prices, meanwhile, generally fell.
Economists, however, appeared split on whether the economy was slowing, or just taking a break in an otherwise solid growth path.
“This shows we may have a weaker-than-you-think economy,” said Jose Rasco, senior economist at Merrill Lynch & Co. in New York. “Consumers are going into headwinds, and businesses are reacting by holding off on investment and hiring.”
Bush administration officials from the president on down sought to put the best face on the report. Bush told a gathering of small-business owners in the East Room of the White House: “Our economy is strong and getting stronger…. We’re witnessing steady growth.”Treasury Secretary John W. Snow backed up his boss, saying, “The economy doesn’t move in a straight line up. It zigs and zags some.”
Meanwhile, Bush’s presumptive Democratic challenger, Sen. John F. Kerry of Massachusetts, used the kickoff of a Fourth of July weekend bus tour to blast the president’s economic record.
“This administration says to you that is the best economy of our lifetime,” Kerry told a crowd in Cloquet, Minn. “They say that this is the best we can do. They’ve even called us pessimists.
“Well, I say to them: The most pessimistic thing that you can say is that America can’t do better than we’re doing today,” Kerry declared.
And once agin, as is becoming common with this Administration, the rosy numbers from last month have had to be “corrected”–downwards.
The June jobs report included evidence of several kinds of economic weakness and crystallized a sense that rising gasoline prices, higher interest rates and a trailing off of the Bush-engineered tax cuts may finally be taking an economic toll.
The report showed that job gains in April and May totaled 581,000 — 35,000 lower than previously reported. It suggested that manufacturing’s comeback from nearly four years of job losses stalled last month, as factory payrolls unexpectedly slid an additional 11,000.
The report also showed that the average workweek slipped from 33.8 hours to 33.6 while the manufacturing workweek fell from 41.1 hours to 40.8. Average hourly earnings increased by only 2 cents to $15.65. Over the last year, average hourly earnings have risen only 2%, or about in tandem with inflation.
“What these numbers mean is that we’re not out of the woods as far as the labor market is concerned,” said Jared Bernstein, an economist at the liberal Economic Policy Institute in Washington. “There’s still enough slack in the economy that employers don’t feel the need to bid up wages.
After destroying a thriving economy by bad-mouthing it, crippling it with deficits, and using tax policy to skew income distribution so far toward the rich that their income has almost doubled while ours has been held to the 2% level of inflation, Bush is trying to tell us “We’re stronger.” What he must mean by “we” is him and his rich friends/contributors because the rest of us are struggling.