May 2016 US Job Creation Continues Major Downtrend: Paltry 38,000 Jobs Created

[MajarTheLion]

The economy in the US continues to get worse. While 162,000 jobs were "expected", only 38,000 jobs were created in May 2016.

Unfortunately, the news gets even worse. March and April job creation numbers were "revised" down by a total of 59,000. As of May, the downtrend in job creation has lasted eight months, from a high of nearly 300,000 jobs to the nearly 90% worse number of 38,000 jobs created.

While the unemployment rate dropped from 5.0% to 4.7%, the majority of that is due to people leaving the work force (obviously, most of them are people that simply gave up on finding a job in this tepid economy.

http://blogs.wsj.com/moneybeat/2016/06/03/may-jobs-report-everything-you-need-to-know-3/

With these facts in mind, is it any wonder voters consistently express the economy as their biggest concern this election cycle? I think not. Sadly, Barack Obama names the economy as the "accomplishment" he is most proud of.

http://www.cnn.com/2015/02/01/politics/obama-proud-of-saving-the-economy/

This is one of many reasons people of all political stripes feel our "leaders" in Washington DC are out of touch with reality.

[CaptHaddock]

Nice try blaming Obama for the lower growth of jobs. The fact is that during his administration the economy recovered from the Great Recession, which was brought to you by financial deregulation championed by Republicans like Greenspan, although the Dems did go along with it.

The decline in job growth could indicate a general slowing of the economy, but it's not clear yet. Jobs are usually a lagging economic indicator, not a leading one.

[shirtless]

Lets see the retail figures thats a good indicator , its like the canary in a mine.

[MajarTheLion]

Nice try blaming Obama for the lower growth of jobs. The fact is that during his administration the economy recovered from the Great Recession, which was brought to you by financial deregulation championed by Republicans like Greenspan, although the Dems did go along with it.

The decline in job growth could indicate a general slowing of the economy, but it's not clear yet. Jobs are usually a lagging economic indicator, not a leading one.

That's really quite laughable when one looks at the facts. But if you want to play the partisan game, I'll go along. The most sweeping deregulation of the banking industry was signed into law by Bill Clinton. So yes, I guess the very least you'll have to say is the Dems did "go along with it".

The bottom line is that clearly job creation is in a downtrend. The people who can't find work, or have to work multiple part time jobs because of Obamacare, don't care about Greenspan and the Republicans. They know who the president is. I don't know ANYBODY who is happy with this economy. You can look forward to this heavily weighing down the Democratic Party as we move towards November. Good luck blaming it on Republicans.

So.... what are your thoughts on the downtrend itself? Is slow European-style growth our new reality? Is having 45,000,000 on food stamps the new normal? You seem very concerned about blaming everything you can on Republicans. How do you expect to pull that off with Obama having 8 years in the White House?

[MajarTheLion]

Lets see the retail figures thats a good indicator , its like the canary in a mine.

I'm not so sure the millions who can't find work will be worried about the retail sales figures, but OK....

[CaptHaddock]

Nice try blaming Obama for the lower growth of jobs. The fact is that during his administration the economy recovered from the Great Recession, which was brought to you by financial deregulation championed by Republicans like Greenspan, although the Dems did go along with it.

The decline in job growth could indicate a general slowing of the economy, but it's not clear yet. Jobs are usually a lagging economic indicator, not a leading one.

That's really quite laughable when one looks at the facts. But if you want to play the partisan game, I'll go along. The most sweeping deregulation of the banking industry was signed into law by Bill Clinton. So yes, I guess the very least you'll have to say is the Dems did "go along with it".

The bottom line is that clearly job creation is in a downtrend. The people who can't find work, or have to work multiple part time jobs because of Obamacare, don't care about Greenspan and the Republicans. They know who the president is. I don't know ANYBODY who is happy with this economy. You can look forward to this heavily weighing down the Democratic Party as we move towards November. Good luck blaming it on Republicans.

So.... what are your thoughts on the downtrend itself? Is slow European-style growth our new reality? Is having 45,000,000 on food stamps the new normal? You seem very concerned about blaming everything you can on Republicans. How do you expect to pull that off with Obama having 8 years in the White House?

Repeal of Glass-Steagal, reprehensible as it was, was not a major factor in the Great Recession because the commercial banks were not the largest part of the problem. By the early 2000's 75% of all lending in the US was in the hands of the unregulated "shadow banking" system. i.e. mortgage-lenders like New Century Financial, hedge funds, investment banks, off-balance sheet debts, and the derivatives market. Greenspan, in thrall to the efficient market hypothesis of the fresh-water economists and its corollary, the impossibility of bubbles, refused to regulate these markets even after being warned of the bubble by Gramlisch in 2002. The immediate cause was the run on this vast unregulated banking sector. This was a Republican project and philosophy, but it's true the Dems did go along with it. Clinton did reappoint Greenspan, after all.

Job creation is in a three-month slowdown. That's not good, but it doesn't necessarily mean either a trend or a new recession. Jobs numbers are noisy. The larger problem of declining labor market participation, which dates from the Bush recession of 2001, is the secular trend. Part of this is the retirement of the boomers, but it also comes from the decline of manufacturing which owes a lot to the strong dollar policy of Rubin in the Clinton administration which favored the financial sector.

Poverty has multiple causes, but the changes since about 1980 can be laid at the feet of the Reagan tax cuts which shifted the benefits of increasing productivity from being shared broadly to being concentrated in the 1%. During the period roughly from 1980 to the present the share of the national income belonging to the top 1% went from 9% to 24% while the real median wage declined by 7%. By contrast in the same period in Germany the share of income of the top 1% went from 8% to only 9.5%. This is the cumulative effect of the Reagan, and later Bush, tax cuts, but also of anti-union legislation and a free-trade policy that exposed factory workers to competition with Chinese workers, but protected doctors and lawyers. The growth of inequality is the big story over the last 40 years and it was a Repub project, although the Dems went along with some of it. Obama has made some strides recently against inequality by raising tax rates on the rich. At the same time the labor movement is showing at least a little new life in the $15 minimum wage movement. If the Repubs were to get control of all three branches of govt they could be counted on to snuff those stirrings out in the blink of an eye.

Governments are more responsible for the economy during periods of recovery than prosperity. Clinton probably did not deserve all the credit he got. Obama should have done more by increasing actual spending, such as on infrastructure, for example, but he was blocked by the Republican Congress who were pretty clear they would prefer to trash the economy in the hope that Obama would be blamed. The Fed's monetary policy was always at best a weak substitute for the expansionary fiscal policy that was required, but not forthcoming. Still, Obama did a lot better than the Brits where Cameron's austerity program caused a second recession and nearly a third one before they came (partially) to their senses.

As for the effect on the election of the slowdown in job growth, I wouldn't expect it to be a big factor since, fairly or unfairly, the unemployment rate only affects those voters without a job. A recession would be a different story since it affects nearly everyone, but so far the next recession is not in sight. Slow recovery of the labor market has been a feature of the US economy since the recession of 2001. Recoveries from financial crises take longer than those of normal recessions induced by Fed rate increases. It's only been 8 years since the GR. We can expect a few more years of after-effects assuming there is no new shock such as from China. Low growth, low productivity growth, and low interest rates would seem to be the new normal for a while at least.