August 3, 2014
A 'jobless recovery' according to The New York Times
By Silvio Canto, Jr.
Friday's jobs report is out and The New York Times and the Obama administration won't like it. The NY Times is correct in calling this a "jobless recovery" in their latest editorial:
"For the fifth straight month, the average workweek for most of the labor force was stuck at 33.7 hours. Factory overtime, once a mainstay in the lives of working-class Americans, dropped in July for the second straight month. Average hourly wages have, at best, kept pace with inflation over the past year. Pay is languishing, but working longer hours is not an option.
In its statement, the Fed said it was basically a tossup whether the economy would speed up or slow down. Faster growth, however, generally requires a healthy real estate market and that requires a healthy job market, especially for younger workers.
But in July, the jobless rate for workers ages 25 to 34 was 6.6 percent, compared with 6.2 percent over all. Among young people who are working, many are in low-wage or part-time jobs, or jobs that otherwise do not make use of their education or experience. So it is not surprising that the sale of new homes plummeted recently at the fastest pace in nearly a year. Sales of existing homes have risen, a positive sign but a questionable trend given the still-ailing job market.
The most likely scenario is for the economy to continue to muddle along at an overall annual pace of 2 percent to 2.5 percent."
The good news is that The NY Times has identified the problem, i.e. not enough job creation.
Perhaps someone at the White House will read this editorial and propose something serious to make life easier for the nation's employers. So far, the Obama administration has done little to support employers. They've focused on populist rants, a minimum wage proposal that won't create jobs and regulations passed by going around the Congress.
Wonder why the economy will continue to muddle along at an annual pace of 2%?