The May jobs report from the BLS is out this morning, and the findings are not pretty. The headline number is that only 69,000 jobs were created last month, over 100k under the requisite amount to accommodate the population increase. Worse yet, the long-term unemployed rose from 5.1 million to 5.4 million, driving up the U6 rate to 14.8% from 14.5%. The U3 rate ticked up a point to 8.2%, as last month’s jobs numbers were revised down to just 77,000 from the previously reported 115,000. The March jobs numbers were also revised down.
It‘s hard to articulate just how terrible and ominous these numbers are for the future of our economy. Remember that just in order to break even with pre-recession levels, we need to create about 9 million jobs, at a clip of 300-500k per month. The deeper the recession, the more robust of a recover that is needed to break even. Also, keep in mind that the population is still growing, so we must create even more jobs to accommodate that increase.
The miracle of the American economy throughout the post-WWII era is that we have recovered from every recession stronger than we were before each downturn. At this point in the Reagan recover, we were creating over 300k new jobs each month – and that was when the population was much smaller.
We are now two years passed the end of the great recession, yet we are posting dismal jobs numbers and GDP growth of less than 2%. This is endemic of a centrally planned European-style economy, not the American economy that we know. Unfortunately, Republicans are just as guilty. Their continued support for welfare, entitlements, and ant-free market policies continued to drag down the economy with more debt and market-distortions.
We will never fully recover until we enact pure free-market policies where success is not punished and failure is not subsidized.
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