August 30, 2012
The Obama administration hailed Friday’s jobs report from the Labor Department’s Bureau of Labor Statistics (BLS), claiming that the 163,000 net new jobs in July represented a positive development after three months, April through June, in which US payrolls increased by less than half that number. The American media took a similar view in its coverage, and the stock market responded favorably, with its third-largest rise of the year.
What they were celebrating, however, is far from a genuine recovery in the labor market. Wall Street regarded the jobs report as providing sufficient momentum to avoid an uncontrolled economic collapse, while ensuring that the conditions facing the working class remain so precarious that there will be no significant pressure on corporations to raise wages. The White House no doubt takes a similar view.
The actual share of the adult population that is employed fell from 58.6 percent to 58.4 percent in July, while the broadest measure of unemployment, counting both those who are discouraged and have stopped looking for work and those working part-time involuntarily, rose from 14.9 percent to 15 percent–nearly one in every six workers.
There is ample reason to doubt whether the jobs report accurately describes the real situation in the labor market. A separate report by the Labor Department, based on its survey of households, found a decline of 195,000 jobs in July. Moreover, the BLS figure of a rise in 163,000 jobs was based on raw data showing a decline of 1.2 million jobs, which was seasonally adjusted to yield an increase. This may well be overstated because the historical pattern for July is heavily influenced by the traditional auto industry changeover period, which did not take place this year.
This article was posted: Thursday, August 30, 2012 at 3:14 pm