July Jobs: Better, but Still Lousy

The July jobs report is out and it was not as lousy as last month. The Labor Department said the US economy added 117,000 jobs last month and the unemployment rate ticked down to 9.1 percent from 9.2 percent, so a mild improvement over the last two reports, which were dismal. The report should help investors, who have seen US stocks plunge 11 percent over the past two weeks, which has plunked us into correction territory. ("Correction" is a nice way of saying of market thumping.)

Not to be a Debbie Downer, but isn't it sad to be celebrating only 117,000 jobs? It just shows you how low our expectations have dropped. Sadly, it's understandable why companies have not been willing to hire--demand isn't strong enough to prompt action. The government said GDP in Q1 grew by only 0.4 percent (revised lower from the initial 1.9 percent estimate) and in Q2, by only 1.3 percent. The current recovery, which began almost exactly two years ago, has seen annual growth of 2.5 percent, less than half the 5.4 percent enjoyed during previous recoveries.

The reason is clear: consumers have pulled back on spending as they dig out from their mountains of debt; and the government, which had picked up the slack, is entering an "austerity" phase, where spending will be reduced over the next ten years.

That's why the kabuki theater in Washington last month was so annoying -- as politicians dithered over a make-believe debt ceiling crisis, the REAL jobs crisis was as plain as day. Lawmakers on both sides beat their chests over their coveted values, but do nothing about job creation. Perhaps that's why a new CBS News/New York Times poll found that 82 percent of Americans disapprove of the way Congress is doing its job. Congress found a way to score the highest on something--disapproval! It was the highest disapproval rating since polling began in 1977.

And let's not let the Obama administration off the hook, either. During a press conference about the debt/deficit negotiations on July 11th, the President said: "I am not somebody who believes that just because we solve the deficit and debt problems short-term, medium-term or long-term, that that automatically solves the unemployment problem." But the President hasn't done anything substantive to address the unemployment crisis in America.

At yesterday's press briefing, ABC's Jake Tapper grilled Press Secretary Jay Carney on jobs:

[W]hat is the President doing? ... [W]e know that ... he went to fundraisers last night. What is he doing today? ... He stood up there and hectored Congress about all the stuff that needs to be done to help create jobs ... and then he flew off to Chicago. What's he doing today? ... So the same stuff he was doing a couple of months ago, calling on Congress to pass things? ... Has he called Mitch McConnell? Has he called John Boehner? ... [I]s he working on things that they can do? ... You're the one that's always saying the President can walk and chew gum at the same time. ... Other than calling on Congress to pass things that you've been calling on Congress to pass for months, what is he doing to help the economy?

He is working very closely with his senior economic advisors to come up with new proposals to help advance growth and job creation. He is working with members of Congress to help advance growth and job creation. And he will continue to do that. There are things that Congress can do now to create jobs, and they should; there are things that Congress will be able to do when they return from recess to help create jobs and spur growth, and they should. And he looks forward to working with Congress to do that.

With unemployment high, housing stuck and growth petering out, investors are content to wait out the summer and see what develops and Congress is taking an early vacation. The unemployed don't have either of those luxuries.

July Jobs Report:

• July Jobs: +117,000 (June revised +46,000 from +18,000, May revised to +53,000 from +25,000)
• July Private Sector Jobs: +154,000 (June revised higher to +80,000 from +57,000)
• July Unemployment Rate: 9.1 percent (from 9.2 percent in June...partly due to 193,000 people dropping out of the labor force)
• Under-Employment Rate (marginally-attached, part-time): 16.1 percent (from 16.2 percent in June)
• Part-timers (hours cut for economic reasons): 8.4 million (from 8.6 million)
• Total Number of Unemployed: 13.9 million (from 14.1 million)
• Number of years to return to pre-recession employment (assuming current level of job creation): 4 (late 2014 or early 2015)
• Total Jobs Lost since beginning of recession in 2007: 7 million
• Long-term unemployed (jobless for 27 weeks and over): 6.2 million, from 6.3 million in June, which represents 44.4 percent of the total unemployed
• Average Hourly Earnings: up $0.10 to $23.1(Over the past year, earnings are up 2.3 percent)
• Average Workweek: 34.3 hours
• Government: -37K (ninth consecutive month of job losses. Over 500,000 total government jobs lost since peak in September 2008)
• Health Care: +31,000
• Retail: +26,000
• Manufacturing: +24,000
• Construction: +8,000

Jobs: The Elephant in the Room
Debt Deal Done: Now Worry About the Economy

Jill Schlesinger

Jill Schlesinger, CFP® is the Emmy-nominated business analyst for CBS News. She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co-owner and chief investment officer for an independent investment advisory firm. She began her career as a self-employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.

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