Why 431k Jobs Gain Might Be Bad News

We'll let the economic commentators explain

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The U.S. economy gained 431,000 jobs in May. Fantastic, right? Not so fast, say many economics and policy commentators. It turns out 95% of those jobs were "Census hirings," and thus temporary. Put together with the realization that it took billions of stimulus dollars to producers those numbers, bloggers are beginning to wonder: is this jobs gain even good news at all?

  • 'Big Disappointment,' says the MSNBC First Read team. "Officials and analysts privately expected somewhere between 100,000 and 150,000 private-sector jobs on top of the Census hirings, translating to, perhaps, 80% of the jobs created this month as Census. Without more private sector growth this summer, it could mean some rough NEGATIVE job months once the Census hires disappear."
  • 'Anemic on the Surface,' declares economics analyst Mike Shedlock, "and even worse with a close inspection of the details." The "hype" from administration officials and their ilk makes it even more upsetting.
  • How It Affects Politics: Here's the Real 'Katrina'  Mother Jones's Andy Kroll has the takeaway for the White House. "On the one hand, the administration can update its much-publicized, color-coded job-creation chart to show more growth in May," he writes. But officials know how superficial these successes are. "I wouldn't expect to see the administration openly touting today's report." Reuters's Felix Salmon goes further:
Expect unemployment to remain over 9% through the midterm elections--compared to a rate of just 6.9% in November 2008, when Obama was elected. It's that number, rather than anything going on right now in the Gulf of Mexico, which is really "Obama's Katrina".
  • 'A Good Report, with Two Dark Linings,' The New York Times' David Leonhardt calls it, the two caveats being (1) the Census jobs, and (2) that "the economy is a very long way from being healthy." He also notes, based on the breakdown, that "one of the more surprising aspects of the recent recession is how well wages have held up ... In this recession ... most workers who have kept their jobs have not had to take a pay cut." That said, he realizes that the load of bad news in this report could signal "a slowdown in hiring because businesses are worried about the state of the economy."
  • What Are You Talking About?  The report is "depressing, coming in well below lofty expectations, and having no silver lining" counters Reuters's Felix Salmon. 24/7 Wall St.'s Jon Ogg concurs: "A disaster… That is all that can be used to describe (politely) the May jobs data." Meanwhile, Bill McBride at Calculated Risk unloads a ton of graphs based on the employment report, which other bloggers eagerly snatch up. None of the graphs are particularly encouraging.
  • Confirmed: 'We're Falling Into a Double-Dip Recession'  Robert Reich, Berkeley public policy professor and former secretary of labor, translates the report simply as the following: "the labor market continues to deteriorate." He says in the short term, we need "more stimulus" and " in the longer term, we need a new New Deal that will bolster America’s floundering middle class." Without that, there's no way to break the vicious cycle of decreased spending leading to businesses creating fewer jobs leading to decreased spending. Left-leaner Harold Meyerson at The Washington Post, unsurprisingly, agrees: "Today’s jobs figures should dispel any notion that slamming the brakes on government fiscal stimulus is a good idea."
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