AP: Economists, Analysts, and Experts Are ‘Baffled,’ ‘Confounded’ By Job Market That Is ‘Defying History’
If we are believe two late Friday afternoon dispatches from the Associated Press following the government’s awful Employment Situation report earlier in the day, you would think that even a cadre of cops with the talent of Sherlock Holmes couldn’t solve the mystery of the underperforming job market.
Economics Writers Christopher Rugaber and Paul Wiseman went with themes of “baffled economists” and “defying history,” respectively.
First, here are a few paragraphs from Rugaber’s risible report (bolds are mine):
Weak hiring casts doubts on strength of rebound
Hiring slowed to a near-standstill last month, raising doubts that the economy will rebound in the second half of the year.
The report baffled economists who had predicted much stronger job creation. And it escalated a debate in Washington over how to spur hiring and energize the economy while also cutting federal spending.
… For President Barack Obama, the sputtering job market represents a threat 16 months before his re-election bid.
Two years after the recession officially ended, companies are adding fewer workers despite record cash stockpiles and healthy profit margins.
A result is that more people are giving up looking for work.
Rugaber’s headline presupposes the existence of a “rebound.” That’s highly debatable. Pending revisions which seem likely to push the number even further downward, the fact is that employment has risen 524,000 seasonally adjusted jobs since the recession ended 24 months ago, an average of 22,000 per month. Over 90% of those jobs (479,000, again seasonally adjusted) have been added at temporary help services. The comparable actual figures (i.e., not seasonally adjusted) are 637,000 and 491,000. As I’ve been saying for 18 months, since the AP’s Jeannine Aversa cited the “Economy’s Fall –and Rebound” as the number one business story of the year for 2009(!): “Rebound? What Rebound?.”
Rugaber’s fourth excerpted paragraph continues the establishment press’s beyond-annoying habit of tying anything and everything to President Barack Obama’s prospects for reelection, in this case mostly breezing right past the frightening human cost of the economy which has developed on his watch. But of course, Rugaber never cites any Obama administration policies which might be causing the current economic malaise.
The AP reporter’s final two excerpted paragraphs represent a not-subtle attempt to blame the problem on meanie employers who won’t hire people. Chris, they would do so if they thought they could do it profitably. Why don’t you work on figuring out why they won’t?
The rest of Rugaber’s report cites several other excuses: the weak housing market (why is it weak, Chris?), rising energy prices (again, why is that occurring?), and how employers have suddenly become more “nimble” at determining exactly when they need more help (was logistics software just been invented sometime in the past month?) — anything to avoid looking at administration policy for the root causes.
Paul Wiseman’s whines are little better, but at least give him credit for looking at the human side. On the other hand, Wiseman, like Rugaber, looked over the scene of all the job killing and tagged computer software as an accomplice (bolds are mine):
Flat jobs data signal weakest recovery in decades
The job market is defying history.
A dismal June employment report shows that employers are adding nowhere near as many jobs as they normally do this long after a recession has ended.
… The excruciatingly slow growth is confounding economists, spooking consumers and dismaying job seekers. Friday’s report forced analysts to re-examine their assumption that the economy would strengthen in the second half of 2011.
… the June numbers were even worse than May’s, even though gasoline prices are falling and factories revving up again.
Among the frustrated is Cris Cohen, who was laid off in April from a job as a contractor for Cisco Systems in Raleigh, N.C. He’s been searching for work since then, futilely combing job listings, reaching out to friends and setting up a website with a resume and a blog.
“In the past when I’ve left jobs or been laid off, I’ve just contacted connections I have had, and that’s led to opportunities,” says Cohen, who has a wife and a 9-year-old son. “Now it’s just seems much more dry…. There’s just always that anxious feeling, that nausea.”
One problem is that after slashing jobs during the Great Recession, employers are still reluctant to replace them. They’ve learned to squeeze more work and revenue out of reduced staffs.
Other factors are restraining hiring, too. More sophisticated software lets managers scrutinize changes in their businesses minute-by-minute. They can postpone hiring until they’re certain they need more workers.
Over at Heritage (HT to commenter dscott), Mike Gonzaez cites five legitimate reasons why hiring is lagging, all of which tie directly to Obama administration policies:
Stimulus package—The nearly $1 trillion boondoggle failed to stimulate, as we all now know, but made government grow beyond its means. … The government stimulus bill did not create jobs; instead it filled job creators with fears of future tax hikes or more borrowing, and thus future artificially high interest rates.
Obamacare—It took the Administration and the Democratic-held Congress a year and half to ram this piece of legislation down the throat of the American people, time that could have been spent fixing the employment picture. Worse yet, Obamacare imposes vast and expansive new regulations and made labor costs uncertain. …
Frank-Dodd Financial Bill—The heavy-handed Dodd-Frank financial regulation bill not only placed needless burdens on small as well as large financial institutions, but has deterred investment by imposing ill-defined restrictions on those who want to invest in the economy. And it did so without addressing the real causes of the financial crisis.
Environmental Protection Agency regulation—Unable to get Congress to pass Cap and Trade, with its skyrocketing electric rates, the Obama EPA is skinning the cat another way—mandating costly regulation. …
Regulatory Assault on Employers—The Administration’s enforcement agencies view employers as lawbreakers who need to be brought in line. … Obama’s message to employers has been clear: “We suspect you are breaking the law and we will get you.” Small wonder they are not hiring.
Read the whole thing.
I’d add energy policy as a sixth direct and indirect administration-driven cause on top of the five Gonzalez. On the direct side, ask unemployed oil industry workers in the Gulf and elsewhere. On the indirect side, look at what has happened to retail traffic since the gas price spike in the spring.
Getting back to AP: The causes of the current situation are not baffling at all. Its reporters’ failure to even get into the neighborhood of citing the obvious demonstrates that they’re deliberately botching their investigations.
Cross-posted at NewsBusters.org.