Jobs doldrums: Prospects for a revived economy still look dim
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On Friday, the Bureau of Labor Statistics reported that an uninspiring 80,000 jobs were created in June, leaving the nation's unemployment rate unchanged at 8.2 percent.
Adjustments for April and May didn't help either. The April jobs creation figure was lowered from 77,000 to 68,000 and the May number was raised from 69,000 to 77,000. It is generally considered that the U.S. economy has to add some 150,000 new jobs per month just to stay even with new entrants in the job market. Some 12.7 million Americans remain unemployed.
Politically, this is not good news for President Barack Obama. Four more sets of monthly figures will appear before Election Day, with the July statistics to be released Aug. 3, the day before Mr. Obama's birthday.
There is probably not much that he can do to improve the country's pallid employment growth record, at least in the short term. It is probably true also that, based on Republican opponent Mitt Romney's approach, amply illustrated by his hands-off recipe for dealing with the auto industry's woes, there is little reason to believe that, as president, Mr. Romney wouldn't be worse than Mr. Obama in his impact on job creation.
On July 3 the International Monetary Fund, after the release of its annual check-up on the American economy, followed by a press conference by IMF Managing Director Christine Lagarde, also poured cold water on current prospects. The IMF lowered its estimated growth for 2012 from an April figure of 2.1 percent to 2 percent. The growth estimate for 2013 was reduced from 2.4 percent to 2.25 percent.
These figures were accompanied by a stiff warning from Ms. Lagarde on three waterfalls awaiting the U.S. economy at the end of the year. The first is the expiration of the Bush-era tax cuts; the second is the automatic spending cuts that will occur in the absence of an agreement on planned budget reductions; the third is rising spending that reaches the debt ceiling.
Given the low prospects for constructive political compromise in Washington, the roar of the approaching falls will only grow louder with time.
First Published July 9, 2012 12:00 am