Tell Me Again About How That Stimulus Is Working

by Pejman Yousefzadeh on July 2, 2010


Because for whatever reason, my lying eyes keep telling me otherwise:

A weak June jobs report offered the latest evidence that the economic recovery is slowing.

Employers cut 125,000 jobs last month, the most since October, the Labor Department said Friday. The loss was driven by the end of 225,000 temporary census jobs. Businesses added a net total of 83,000 workers, the sixth straight month of private-sector job gains but not enough to speed up the recovery.

Unemployment dropped to 9.5 percent — the lowest level since July 2009 — from 9.7 percent. But the reason for the decline was more than 650,000 people gave up on their job searches and left the labor force. People who are no longer looking for work aren’t counted as unemployed.

The latest figures suggest businesses are still slow to hire amid a weak economic recovery. Many economists were hoping to see more private-sector job growth, which would fuel the economy by boosting consumers’ ability to spend.

“It could have been worse, but it wasn’t good,” said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. “It’s adding to the evidence that growth has slowed.”

It should be noted that many of the job losses came as a consequence of census workers being let go. Their addition to the labor force was consistently underplayed by the Obama Administration, which sought to show that the economy’s overall performance was responsible for better job numbers. Of course, anyone who had been paying attention to the news knew that private sector hiring was just not strong at all, and that job numbers were inflated as a consequence of census hiring that would only be temporary in nature. Now that the census hiring has come to a screeching halt, there is no disguising how bad the job numbers look.

Even worse is the fact that the only reason the unemployment rate fell to 9.5% was that around 500,000 people stopped looking for work. Those numbers ought to frighten people.

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