Monday, 7 May 2012

Disappointing Jobs Figures

It was slightly bemusing to witness the American media's rather complacent assumption over recent months that the economy was on a path to permanent recovery.  Over the last several years, the jobs market has warmed noticeably during the Christmas season only to weaken again in the following months.

Unfortunately, the most recent jobs report suggests that history may be about to repeat.  Only 115,000 net jobs were created last month, continuing a downward trend that began in March.  That is an awful number.

The official U-3 unemployment rate has dropped to 8.1% - because 342,000 more people dropped out of the labour force.  The participation rate now stands at 63.6%, down from the 65.7% figure that President Obama inherited.  If those who have simply given up on finding work are counted, the actual unemployment rate reaches a diabolical 11.1%.

Republican challenger Mitt Romney recently claimed that the American economy should be adding 500,000 jobs per month, a number that seems rather outlandish when juxtaposed with the current recovery.  Historically however, his claim is justifiable.  In April of 1984, the corresponding month of the Reagan presidency, 480,000 jobs were created.

The current numbers are simply not good enough, and there is little hope of a renewed policy response emerging prior to election day.  The end of the year, regardless of November's victor, will see the implementation of a series of tax increases that could even threaten to push the economy back into recession.

It matters not what Republicans pass in the Congress.  Democrats still paralyse the Senate, and Mr. Obama will remain in the White House until at least January of next year, with the power to veto any conservative proposals.

America needs a decisive change of course, and the President is the only man who can deliver it. The status quo is not working.

No comments:

Post a Comment