Alarming lack of job creation in August

Alarming lack of job creation in August

September 7th, 2011 in Opinion Free Press

To tens of millions of Americans who have no jobs or who cannot get enough hours at their part-time jobs to support themselves and their families, the most recent employment report will not come as any surprise.

In August, there was no net increase of jobs in the U.S. economy, and the unemployment rate remained stuck at 9.1 percent. That was the worst jobs report since last September, according to the Labor Department.

The alarming jobs figure in August seemed to take quite a few experts unawares. Economists had predicted -- or perhaps hoped -- that a net 93,000 jobs would be created in August, so it was an unpleasant surprise when new jobs were not created.

In fact, from June through August, job creation averaged only about 35,000 positions per month. That's obviously preferable to actually losing jobs, but that number is not nearly enough to keep up with the normal growth of our nation's workforce.

The United States needs to be producing about a quarter of a million new jobs a month to begin making progress against our high unemployment rate. The indicators from the past few months -- and the ongoing push in Washington to throw good spending after bad -- do not suggest that major private-sector job growth will be happening anytime in the near future.

Considering our high unemployment -- as well as the continuing housing market collapse, low consumer confidence and economic expansion of only 0.7 percent in the first half of this year -- can there really be much doubt that we face the serious possibility of another recession?

And even if we technically do not fall into a new recession, the likelihood of robust growth seems remote at best.

"[E]ven if the U.S. economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still-elevated unemployment rate lower," Paul Ashworth, an economist at Capital Economics, told The Associated Press.

President Barack Obama plans to deliver a big speech later this week on his plan to create jobs. But it is expected to be more of the same -- lots of government spending and borrowing to "stimulate" the economy.

We would rather he give a speech candidly acknowledging that the previous stimulus didn't work, and that the federal government is going to get out of the way of the free-market economy, cease its threats of tax increases, and roll back undue, job-killing regulations in ObamaCare and other unwieldy programs.

But we won't hold our breath waiting for that speech from our big-spending president.