HolyCoast: Economy Gains No Jobs in August, Rate Holds at 9.1%

Friday, September 02, 2011

Economy Gains No Jobs in August, Rate Holds at 9.1%

This isn't good for anybody:
The US economy created no jobs and the unemployment rate held steadily higher at 9.1 percent in August, fueling concerns that the US is heading for another recession.

It was the first time since World War II that the economy had a net zero jobs created for a month.

Economists had been expecting the report to show a net of 75,000 jobs created, an unusually low number considering the US is technically more than two years removed from the end of the last recession.
Allahpundit looks at the effect on 2012:
Remember, the conventional wisdom six months ago was that eight percent is the magic number on unemployment. If the rate starts trending downward and dips below that, then O's in good shape for reelection; if not, not. Fast forward six months and the best-case scenario is now . . . 8.3 percent. I hate looking at this issue through the lens of horse-race politics for the same reason I hate looking at counterterrorism that way, because it reduces human suffering to a crude electoral calculation. But reality is what it is. I don't know how he's going to explain this to voters next summer, especially when he's on record as saying he'd deserve only one term if he didn't have the economy back on track in three years. Maybe the Super Committee will do good work on tax reform and that'll goose consumer spending; maybe O's jobs plan will surprise us and have a positive effect; or maybe we'll continue to stagger along economically but his strategy of complaining about congressional Republicans at every opportunity will carry him to victory. If this is any indicator, though, even Democrats are heading for the lifeboats.
Cue the new jobs plan which will promise massive spending that the House can't possibly support, and that will give Obama an excuse to claim his plan would have worked but the obstructionist Republicans wouldn't let it go into effect. It's going to be a year of whining.

UPDATE:  Political Math adds this:
July's jobs numbers were revised downward. Otherwise we would have lost 58K payroll jobs.
And from Kevin Hassett:
Job creation ground to a halt in August, and the U.S. is now clearly sputtering toward a recession. Downward revisions to prior months make this bad report worse than it seems.
It might be that this jobs report stimulates the Obama team to drop all the Keynesian nonsense, but I doubt it. Frankly, I expect Obama’s jobs speech to be the worst presidential speech in my lifetime. Their position throughout this recovery has been that the U.S. can have the highest corporate tax on earth, a big regulatory crackdown, and a vast expansion of labor-union power, and still expect a positive jobs story because of cash-for-clunkers and green jobs. This jobs report indicates how much damage that view has done.

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