Will the weak employment report prompt action from policymakers?
(MoneyWatch) COMMENTARY Today's employment report was disappointing. Only 69,000 jobs were created in May, the unemployment rate rose from 8.1 to 8.2 percent, and downward revisions to previous months, for example April's number was revised down from 115,000 to 77,000, made the picture even worse.
But is it enough to prompt action from policymakers? Monetary policymakers have indicated that they do not see the need for further stimulus. There are exceptions such as Federal Reserve presidents Charlie Evans at Chicago and Eric Rosengren at Boston, but the predominant sentiment is that the present level of stimulus is sufficient unless the economy takes a large downward turn.
Given the risks ahead from Europe, the chance the oil price hikes could derail the recovery, and the weakness in the latest job market data, a case can certainly be made for more aggressive monetary policy. Thus, there is no doubt that the probability of another round of easing from the Fed has increased. But I don't think this will be enough, by itself, to prompt an actual change in policy. Instead, the Fed is likely to use communication to say that the balance of risks has changed, and then remain in wait-and-see mode. However, if there are any further indications of weakness, and in particular if there are any signs of a deflation threat, then the Fed is likely to act.
Action from fiscal policymakers in Congress is much less likely than action from the Fed in any case. This is an election year, and the chances that the two parties can set aside their differences and implement an additional stimulus package to, for example, build infrastructure are near zero. Tax cuts are one exception, Republicans would likely endorse some types of tax cuts and there are Democrats who would go along, but even here worries about the deficit and fights over who should get the tax cut -- should it be upper, middle, or lower income households, etc.? -- would likely stand in the way.
The pace of the recovery has been far too slow to date, and the employment report for May does nothing to change the expectation that the slow recovery will continue. In fact, it may be even slower than we thought, and a double-dip has to be considered seriously. Policy could help, but worries about inflation at the Fed and the inability of politicians to put the needs of workers above political bickering are standing in the way.
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50% - due to policies and circumstances out of anyones control (It's the way the world is people)
25% - due to failed policies in this country of the past, including GW Bush (equal Republican and Democratic fault here - mostly because both supported a debt/growth for growths sake economy)
Now we get to the present day....25%.... and it's mostly one of behavior and actions within our form of government: Most of the fault goes to the unworkable Congress and because of their actions of delay, denigrate, deny, destroy, stall, and refusal to compromise... and acting like spoiled brats these past five years, even when they were in the minority, 20 out of the final 25% goes to the worst Republican Party this nation has ever seen.
I give the final 5 percent to President Obama and the Democrats, mostly because they tried to placate these Republicans all along and should have been stronger in their stand on issues.
I will vote for Obama because a Romney Administration, coupled with a wacko Tea Party House of Reps and a blatenly partisan conservative Republican Supreme Court would be an unmitigated disaster for the middle class, the poor, the elderly, women, sound energy policy, international relations, science in general, and the natural environment in this country. I hope a more unfettered second term will allow him to continue his slow but steady progress, as much as he can to factors out of his control, in getting us out of this mess.
The problem is BOTH parties. Obama promised change, yet there is no difference between his and Bush the Younger's goverance. They both gave us astronomical debt, bailouts for banksters, tax cuts for the 1%, and no action on the real problem: our tax code promotes outsourcing.
Change the tax code as follows: corporate tax rates are hereby inversely proportional to the percentage of American workers employed by the company. This calculation must include both direct and indirect workers. The latter category includes the workers who make products companies like Walmart import.
saucymugwump.blogspot.com
a) Abandon all plans to grant "amnesty" to illegal aliens.
b) Deport anyone not legally in America.
c) Put in an immediate moratorium on any new legal immigration.
Immigration, both legal and illegal has been hurting American workers in all job categories for years. America has not needed any new immigration for years. The only people still in favor of it are those with ulterior motives, especially to strengthen the hand of various foreign gov'ts that want to get as many of their people as possible onto American soil, e.g. Mexico, India, Pakistan, China.
Conclusion 1: No one has any control over macro-economics, so why blame anyone?
Conclusion 2: Obama is a useless weak sister who can't get anything accomplished, so why vote for him again?