Rotten May jobs report underscores weak recovery

(MoneyWatch) The May jobs report showed that only 69,000 new jobs were added last month and the unemployment rate inched up to 8.2 percent. Given that this month represents the three-year anniversary of the end of the Great Recession (according to the National Bureau of Economic Research, the 18-month recession ended in June 2009), now is a good time to discuss how things are going in the recovery.

Reports released over the past two days confirm what many have been feeling: Corporate America has participated in the recovery, while many workers have not. The all-important monthly employment report and its less important cousins - weekly jobless claims, Challenger, Gray & Christmas job cut report and the ADP private sector employment report - all paint a picture of an uneven jobs recovery.

Will the weak employment report prompt action from policymakers?

2012 underscores the herky-jerky nature of job creation. The year got off to a strong start - in January, the economy added 275,000 jobs and February there were 259,000 new jobs. Then the slowdown began, starting with March, when job creation totaled 143,000, followed by April's 77,000 and now May was 69,000. You don't have to be an economist to notice that the trend is moving in the wrong direction.

Yesterday, Cleveland Fed President Sandra Pianalto said that despite the end of the recession, "the cutbacks in both labor and capital spending have only partially recovered.Three years after the recession, why hasn't the jobs picture improved? The recovery has been too slow to prompt companies to hire. When the government released the second estimate of first quarter growth, GDP was revised down to 1.9 percent from the original estimate of 2.2 percent. While the pullback was expected - economists warned that the 3 percent GDP in the last quarter of 2011 was propelled by one-time restocking of inventories - it is disheartening that the economy is stuck in a slow-growth recovery. In 2011, the economy only grew by 1.7 percent. As a means of comparison, from 1947 until 2010 the average quarterly U.S. GDP growth was 3.3 percent

Despite the tepid growth, corporate America continues to do just fine. Company profits, after tax and unadjusted for inventories and capital consumption, increased at an 11.7 percent annual rate from the previous quarter and were up 14.8 percent from a year ago. As the economy has improved, companies have been able to make more money with about the same or maybe a slightly larger labor force. This is good news for stock prices, which have almost doubled since the March 2009 lows. But improved profitability hasn't helped enough of the 12.7 million Americans get back to work, nor has it trickled down into meaningfully higher wages for those lucky enough to be employed.

The fact that corporate America has continued to thrive, while many Americans are treading water (or worse) extends a trend established in the first half of the recovery. Economists at Northeastern University found that from the second quarter of 2009, when the recovery began to the fourth quarter of 2010, "corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent."

At the three year anniversary of the recovery, it's understandable why there is great frustration brewing among many Americans. Yes, there has been great overall progress since the economy bottomed. But the box score is heavily lopsided in favor of corporate America versus the American worker.

-- Jobs created: +69,000 (April: +77,000; March: 143,000; Feb: 259,000; Jan: 275,000)

-- Private sector jobs created: +82,000

-- Government: -13,000

-- Unemployment rate: 8.2 percent (from 8.1 percent - the lowest rate since January 2009)

-- Under-employment rate (marginally-attached, part-time): 14.8 percent (from 14.5 percent-- in 2007, the rate was 8 percent)

-- Total number of unemployed: 12.7 million (from 12.5 million)

-- Long-term unemployed (jobless for 27 weeks and over): 5.4 million representing 42.8 percent of the total unemployed

-- Average workweek: 34.4  (from 34.5)

-- Average hourly earnings: up $0.02 to $23.41 (up 1.7 percent over past 12 months)

[alphaa10000]

THE "JOB CREATORS" COMMENT

Thank you for your comment, which confirms what many Americans suspect-- business owners are not job creators. Instead-- as you yourself said-- "We could hire but won't as long as we do not absolutely have to."

The recession began in 2007-2008, while a GOP SEC and a GOP president were in charge. That GOP-promoted experiment in "free market" policy crashed and burned for all Americans to see, along with much of their 401ks and pension funds. The scandalous behavior of Wall Street banks and funds was a disaster scene, and left a consumate mess for recovery.

Clearly, for most of us, the recovery is slow and disappointing. Yet, corporate America, including the Wall Street financial sector, is now doing quite nicely, and literally rolling in cash. The problem is not their wealth, but the stupid, fearful greed that lets many try to rationalize starving their own country's economy for three, almost four years by hoarding and not spending cash.

Some in business circles profess to understand capitalism, but if capitalism is a system of any kind, it is based on keeping a dynamic flow of capital to promote economic growth. Capitalism is not about anal retentive economics, of making and hoarding profit for its own sake.

As strange as it may seem to those who disagree with Warren Buffet about the source of wealth in society, capital comes from the efforts of all Americans. When great portions of the country are without work, everyone will suffer until all of us have real growth and opportunity again.

If capital is a dynamic thing-- and most writers about capital understand it dies unused in the vault or Swiss bank account-- then the only capitalists are those who, in a time of greatest need, are now busy investing in their country and communities..

Meanwhile, as your neighbors fall on hard times, perhaps you will find it harder to salute the flag and celebrate this country's greatness, knowing you can and should do more-- much more. After all, an economy is a community activity.

---------------

It Takes a Whole Community to Raise a Business--
http://www.youtube.com/watch?v=3Wc9bWc-WRs

[bob7896]

Three and one-half years into his term and Oblamie is creating fewer and fewer jobs.
Heckuva job...ONE TERM.

[alphaa10000]

Bill the GOP for the continued recession, in part because of their frantic efforts to roadblock all Obama recovery legislation, and in part because GOP policy on Wall Street launched the recession.

And remember the GOP has done its worst to obstruct recovery, and prolong the recession it created.

And thank Obama for helping to pull us out of the GOP-created disaster into recovery.

TWO TERMS

[brendastalings]

The Blamer and Chief is in full tilt now! It's Europe...No, I mean Congress...umm, the GOP? I forget now. I just know it can't be me.

[GrannyCares]

So much for 'HOPE AND CHANGE'!! We have had 40 long, hard, DEPRESSING MONTHS of blaming others for Obama's FAILURE.

Thought it interesting yesterday: Team Obama attempted to blame the European situation for the increase in unemployment. BUT, quickly caught themselves and went after Congress! How foolish they appear and sound!

Do you think that Obama would call an immediate cabinet meeting, with the Speaker of the House and Senate Majority Leader and announce the following to give businesses something to plan on?

* Extend Bush Tax Cuts for FIVE (5) Years.
* Announce that OBAMACARE is going to be revisited, with discussion and debate OPEN TO THE PUBLIC -- as he promised in 2008 -- and that all initiatives will be on the table with potentially LESS GOVERNMENT interference in individual health care.
* Capital Gains tax rate reduced to 15% for a minimum of four years to cause US to become more competitive
* Punitive Regulations will be reviewed over the next six months with the intent of removing those hindering job creation -- with a special focus on drilling for natural resources on government lands. (Set up a weekly report to the American people on what regulation was reviewed; what action was taken; why; and the number of potential jobs that could be created, as determined by the industry (NOT BY THE GOVERNMENT).

Is he doing this?

NO!

Obama's schedule indicates that he is back on the campaign trail barking for money!!

And he expects Americans to vote for FOUR MORE YEARS OF THIS %$#@????

Really feel for those Americans in their 50's and older who have been affected by this recession; could not find work; and have given up hope -- in America! Thanks for nothing Obama!

[tpaine1]

But then he would have to admit that the Obama-Pelosi-Reid brand of "crony socialism" doesn't work - like socialism ever has.
Not going to happen. Look at all the Democrat cronies and contributors he's helped to trillions of tax dollars.

[alphaa10000]

Tax cuts aggravate the deficit, as a matter of basic math, which is why Bush and the GOP congress (which passed them) also provided an expiration date, which the current GOP has chosen to ignore.

The GOP wants most of America to suffer cuts in government programs, many of which boost the economy. All for the sake of preserving their rich patrons at our expense.

Tax cuts for the wealthy did not boost the economy under Bush, whereas taxes under Clinton did not stop the economy from roaring ahead. Laffer was not amused.

Regulations like Glass-Steagall kept US investors safe for more than 70 years from depression (the last one launched by GOP policy). Proper regulation promotes business, but improper or no regulation is what Bush brought under the label "deregulation", and made it his policy. Wall Street and recession (some say another depression) was the result of that policy.

Capital gains tax is less than half of what it was under Reagan, and so the discussion should be why the middle class should pay what wealthy GOP patrons do not want to pay of their own, fair share.

[Unitepeople]

by Shallow_Rs_Are_CRET-_-Ns June 1, 2012 4:01 PM EDT
LOL!...History shows us that the more the Republicans get control of the three bodies
____________________

Failed history I see:
of the last 50 years 35 of them have seen control of congress in the hands of the democrats.
The 36th President was Lyndon B. Johnson (November 22, 1963 - January 20, 1969)

The 37th President was Richard Nixon (January 20, 1969 - August 9, 1974)

The 38th President was Gerald Ford (August 9, 1974 - January 20, 1977)

The 39th President was Jimmy Carter (January 20, 1977 - January 20, 1981)

The 40th President was Ronald Reagan (January 20, 1981 - January 20, 1989)

The 41st President was George H. W. Bush (January 20, 1989 - January 20, 1993)

The 42nd President was Bill Clinton (January 20, 1993 - January 20, 2001)

The 43rd President was George W. Bush (January 20, 2001 - January 20, 2009)

The 44th President is Barack Obama. President Obama was in office from January 20, 2009 to the present (2010).

Read more: http://wiki.answers.com/Q/Name_all_the_us_presidents_in_the_last_50_years#ixzz1wahdoNcf
So maybe you should stop while your ahead.

[alphaa10000]

Through most of those decades, Americans have had a president of one party and a congress of the other. The Johnson years and Bush years were exceptions.

Under Johnson, all three branches of government were dominated by Democrats. Whatever we think of civil rights progress, Johnson also led us into Vietnam.

Under Bush, all three branches of government were now in GOP hands-- leaving us with Wall Street and a broken economic system, two wars, a growing gulf between rich and poor, and a country literally falling apart at its seams.

Most of us would understand that as an informal proof of the danger of a one-party system.

[Unitepeople]

Oh Slick Will just stabbed Obama in the back and praised the hell out of Romney's job performance at Bain. Can you feel the Love OBAMA . I guess Slick got his revenge on Obama for beating his wife. In other news Obama is dropping in the electoral map faster than a falling asteroid. Now he is barely tied with Romney in NEV REID'S HOME STATE and in Iowa and is far behind in FLA, has lost S.C behind in N.C and is trailing in Colorado. Now we learn that WIS is in play as well as PEN. Not a good day or week for Obama. Even worse for the country but you know it is only Obama that matters.

[Jesus_to_ground_control]

What do you want, a rotten job report or stable jobs that will last and accumulate!

[Unitepeople]

Jesus you want to say that again in English? I mean Obama has only given us rotten jobs and no accumulation and no jobs that will last not even his GOV jobs which he was forced to reduce.

[Jesus_to_ground_control]

Dreamt in the U.S.A

Excuse my English! The job market is evolving and people are adjusting to the new technologies at the workplace.
I predict that the economy will get better in the next two to four years when the U.S. directs eighty percent of its resources the worldwide market.

[Another_American]

Corporate America may be doing fine but it is because it is about the dollar. Do more with less. Eventually, it will all implode.

If jobs are increasing, where are they? If you look at the transportation industy, governmental agencies are not spending money on infrastructure as a whole. For every million dollars spent on infrastructure improvements,3ooo jobs are created. It is a spider web affect. Do the math. Investments need to be at home. You can't ship these jobs over seas.

[wfw3536]

VP Biden has said on a couple occassions recently that Obama and his administration now own this economy. Well, maybe he should tell the president as he goes around making every excuse possible that the present state of the economy isn't his fault. When is Obama going to "man up" and start running on his failed record?

[hypnotoad72]

Well, private industry creates 90% of all jobs.

Saying "taxes" in of itself won't help because of all the subsidy and bailouts they get. They nullify each other and then some. Don't believe me? Find my posts where I post 60 articles delving into corporate welfare.

Also, as any remaining jobs require degree + massive experience, those currently in college may not be able to find work because of the lack of it and volunteer work does not pay the bills.

Worse, as those entry level jobs are in other countries, they will have the experience companies (who lobbied to get welfare in return for offshoring jobs as well) will have the experience they've engineered at our expense.

http://hubpages.com/hub/HowH1BVisaFRAUDiskillingAmerica

http://www.ontheissues.org/senate/mitch_mcconnell.htm#Corporations
"Voted NO on repealing tax subsidy for companies which move US jobs offshore. (Mar 2005) "

etc, etc, etc

Don't blame government - it's simply bought and paid for.

[realtimecoffee]

I know it doesn't get said much, but thank you for all the links and the time it took to assemble them.