On Friday the Department of Labor released its monthly job report. The number of unemployed in the economy continues to look bleak.
In July, 131,000 jobs were lost, contributing to the 9.5 percent of unemployment rate. This number reflects only those who are actively looking for work.
In absolute terms, 9.5 percent translates into 14.6 million people unemployed and seeking jobs. Over 6.5 million people have been unemployed for 27 weeks or longer. The length of unemployed shows the continued difficulty of the unemployed to find work.
“The labor market improvement has slowed to a glacial pace, consistent with third-quarter growth even slower than the second,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, to Reuters.
A more chilling number is the “real unemployment rate”—16.5 percent of the American workforce are not working full time because of the economy. This percent reflects those unemployed, working part time for economic reasons, and those who have been unemployed so long they are considered discouraged—no longer looking for work.
The New York Times reported Friday:
“The private sector is still hobbled,” said Robert A. Dye, senior economist at PNC Financial Services Group in Pittsburgh, “and certainly is not nearly strong enough to overcome the drain on the government side.”
Government figures released last week confirmed that the American economy slowed in the spring, and the latest jobs numbers suggested that the weakness continued into the early summer. With economists and politicians fervently arguing over whether the economy is poised for liftoff or stalled on the runway, Friday’s jobs report did little to end the debate.
Some economists are talking about the risk of a “double dip” recession, and the political stakes for the Obama administration are rising as the midterm elections tick closer.
The Department of Labor report comes exactly one year after President Obama stated “worst may be behind us.”
The 2008 recession has ballooned into a “great recession” mainly because of the policies coming out of Washington. The current administration is seen as anti-business. Many businesses, both small and large, are hesitant to expand or hire new workers because of the current hostile tax and regulatory environment. Uncertainly of new legislative burdens and taxes also contributes to this hesitancy.
Unless Washington eases off the anti-business rhetoric, does not raise taxes—by keeping the current rates, decreases spending, and goes back to allowing the free market to function, we will continue to see job losses.
F. Vincent Vernuccio is Labor Policy Counsel at the Competitive Enterprise Institute.