Today’s Bureau of Labor Statistics jobs report for June suggests the economy is again nearing even officially-defined recession and weakening further as state, local and federal government cuts to jobs and contracts to private employers begin to take a serious toll. Conditions could get far worse. My updated, detailed data tables and graphics are available.
In a reprise of earlier self-interested but economically incompetent hysteria over the current (awful) federal budget deficit, it is vital to understand that the private sector today employs 1,999,000 (1.8 percent) FEWER Americans than 11 years ago in June 2000 – when the U.S. had almost 30 million fewer people. The sustained, 11-year plunge in U.S. jobs is the first since 1927-1938, when the Depression-era job gains of 1933-1936 were sharply reversed in a devastating deficit-reduction effort.
It is simply not possible to have any understanding of today’s economy, the federal budget or future prospects without an appreciation of this remarkable 11-year crisis in which most industries – virtually every industry that faces foreign imports and offshore outsourcing – have suffered unprecedented job losses. The $6.3 trillion in U.S. production losses and foreign borrowing represented by the current account trade losses over this period take an enormous toll now in jobs, production and tax revenue even as they reflects a hollowing out of productive resources and ongoing crises in the future.
In today’s report, BLS revises down the number of total jobs in May by 44,000 before estimating that only 18,000 jobs were created in June. That is, BLS now estimates that the U.S. has 26,000 fewer jobs in June than it previously estimated for May. Furthermore, since the average workweek fell by 0.3 percent in June (from 34.4 hours to 34.3) the total numbers of hours worked in the private sector is now estimated to have fallen back to a level 0.2 percent lower than in April.
Because the number of paid hours in the workweek fell in June and even average nominal hourly wages declined slightly, average weekly wages fell 0.3 percent in June even before adjusting for any inflation. These declining wages again drive down consumer purchasing power even for those still employed, at a time of well-justified rising concerns for the security even of still existing jobs and the economy.
The over-emphasized official unemployment rate rose only to 9.2 percent in June from 9.1 percent in May only because the number of people counted in the active labor force declined by 272,000 people. Although the U.S. population is estimated by the U.S. Census to have grown by about 8 million people over the past three troubled years, the number of people counted in the labor force (as working or actively looking for work) has declined by 894,000 people, or 0.6 percent. This is the first sustained three-year decline in the U.S. labor force on records that begin in 1948.
If the labor force had grown by 3.7 percent over the past three years – as it averaged over the previous 20 years – the official jobless rate would now be at unprecedented post-World War II levels of about 13.5 percent. If the current labor force had grown by over 5 percent as it did in 1982 – the year of post-World War II record unemployment of 10.8 percent — today’s official jobless rate would be almost 15 percent — and even this arithmetic counts as employed those 8.6 million people who now are working part-time only because they cannot find full-time work.
Today’s report shows that those who are totally jobless but still actively seeking employment average a record-shattering 39.9 weeks – 9 months – searching for a job. This is almost twice as long even as at the worst of the deep 1981-’83 recession.
Those who ignore the severe U.S. jobs crisis and insist on repeating the devastating mistakes of 1930 and 1937 should be ashamed of themselves – either for their ignorance or for their misguided self-interest.
The months ahead could be quite difficult.