July Jobs Report: What it actually means and what the candidates are saying about it
The July jobs report was better than expected but unemployment remains high. Is it good news or bad news for Pres. Obama?
We found out this morning that 163,000 jobs were created during the month of July. This was the highest rate of job creation since February but the unemployment rate ticked up very slightly to 8.3% (actually from 8.21% to 8.25%). It was better news for Latino unemployment which dropped from 11% to 10.3%. Given the conflicting figures (better-than-expected job growth but higher unemployment) each side of the political spectrum was out spinning.
Presumptive Republican presidential nominee Mitt Romney wasted no time in criticizing the Obama administration.
“Today’s increase in the unemployment rate is a hammer blow to struggling middle-class families,” he said in a statement that also promised to strengthen the middle class and add 12 million new jobs during his first term.
“We’ve now gone 42 consecutive months with the unemployment rate above 8%. Middle class Americans deserve better, and I believe America can do better,” Romney said.
But Alan Krueger, chairman of the White House’s Council of Economic Advisors shot back with a statement of his own saying Obama’s policies are working.
“While there is more work that remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression,” he said. “It is critical that we continue the policies that build an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”
President Obama touted the private sector portion of the report, but said there is still more to do.
“We’ve got more work to do on their behalf, not only to reclaim all the jobs that were lost during the recession, but also to reclaim the kind of financial security that too many, Americans have felt was slipping away from them for too long,” he said of the unemployed at a press conference on Friday.
Sen. Harry Reid (D-Nev.) criticized Republicans in the House of Representatives for failing to pass tax cuts for middle-class families by demanding that the cuts extend to all Americans, including the wealthiest.
“[W]e have now seen 27 straight months of private sector job growth, along with encouraging progress in critical sectors such as manufacturing. Our economy is recovering, but recovering slowly,” he said in a statement.
The conservative Heritage Foundation also weighed in on the report, slamming the Obama administration on its blog for promoting “job killer” policies.
“President Obama and his congressional allies should set aside their ideological fencing for the good of the economy,” wrote Amy Payne. “Extend the 2001 and 2003 tax policies for at least a year to strengthen the nation’s economic security. Prevent the jump in the payroll tax rate. Prevent the implementation of the new Obamacare tax hikes. Prevent the mandated budget cuts known as “sequestration” that threaten national security.”
The Bottom Line
This jobs report was better than most expected; however, with unemployment stuck around 8.2% we are reminded that there will be no quick fix to the slow economy. Consumers continue to focus on saving and paying down their debts rather than consuming.
Both the Obama and Romney camps are right in a way. The job market continues to recover but unemployment is still too high.
The good news is that we are not heading into a new recession. Around 172,000 private sector jobs were created in July signaling that companies are hiring at a decent pace. Both the services sector and manufacturing did well during the month. Employment in professional and business services increased by 49,000 while jobs in leisure and hospitality rose by 29,000. The number of manufacturing jobs grew by 25,000.
The bad news is that there are still some threats out there, like the European debt crisis and slowing emerging markets, which could really hurt the U.S. economy. The public sector continues to shed jobs as the federal and local governments cut back.
There are only three monthly jobs reports before the November election. An exceedingly good or an exceedingly poor report could still have an impact on the race but time is running out.