Context Darkens The Upbeat June Jobs Report: The jobs gap has been widening during the Obama recovery, not shrinking as it does during normal recoveries.

[SirLinksALot]

SOURCE: INVESTORS BUSINESS DAILY

URL: http://www.investors.com/politics/editorials/context-darkens-the-upbeat-june-jobs-report/


On its own, the June jobs report was a good one. A big gain in employment. Hundreds of thousands entering the labor force. And another month added to the longest string of consecutive private sector job growth. In the broader context, it's far less reassuring.

Obama's top economist, Jason Furman, called the 287,000 gain a "clear indication that the economy continues to make solid progress. U.S. businesses have now added 14.8 million jobs since private-sector job growth turned positive in early 2010."

Job growth was higher than expected, and it was widespread, and investors were happy about the news. These are all good things.

Now, how about some context.

First, this big gain came after May's dismal report, which the BLS revised downward to a mere 11,000 new jobs -- which effectively means zero.

Job growth continues to lag population growth. So far this year, for example, the economy has created a million new jobs. But over these same months, the working age population has increased by 1.5 million, according to Bureau of Labor Statistics data.

And while 14.8 million private sector jobs have been created since February 2010 -- as Furman boasts -- the population grew by 16.4 million.

In other words, the jobs gap has been widening during the Obama recovery, not shrinking as it does during normal recoveries.

As we have pointed out in this space before, had job growth under Obama's recovery been merely as good as the average recovery since World War II, there would be millions more people gainfully employed today.

While labor force participation ticked upward, at 62.7% it is still lower than it's been since the late 1970s, and well below where it stood when the recession ended in June 2009 -- when 65.7% of the adult population was in the labor force.

Meanwhile, average hourly earnings climbed at an annual rate of 0.9%, which isn't keeping up with even the current low rate of inflation.

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