Jobs: A Fourth Straight Spring and Summer Bummer
For most Americans, the arrival of spring means rising temperatures, the reemergence of green grass (and weeds), and a return to outdoor activities. It also appears, for the fourth year in a row, that spring's arrival will be accompanied by yet another swoon in the nation's job market.
Wrapping up a week during which several "unexpectedly" weak economic reports previewed trouble ahead, the government's March Employment Situation Summary released on Friday was the strongest indication yet that -- as was the case in 2010, 2011, and 2012 -- somewhat tolerable seasonally adjusted job growth during the winter will be followed by tepid spring and summer hiring.
This time, as a well-known Democrat amazingly noted on Sunday, President Barack Obama, his administration, fear-mongering leftists, and their sky-is-falling media apparatchiks shouldn't be able to hide from the direct results of their handiwork -- though of course they'll try mightily.
To see how bad things are, as is my custom -- and as should be the custom of anyone who's really trying to get a handle on what's happening in the economy -- let's look at both the raw (i.e., not seasonally adjusted) and seasonally adjusted figures for overall job growth since 2001:
As I noted in a column last year, the five months from February through June are crucial for employment growth in the U.S. economy, because that's typically when millions more people are hired than are let go. The more economically robust years during the middle of the past decade saw the economy add an annual average of 4.099 million jobs during those five months, despite the fact that the seasonally adjusted unemployment rate was barely above what is, for the U.S., considered full employment.
As seen above, despite horrid unemployment, vastly underreported under-employment, and assurances that the Obama administration's "stimulus"-driven policies would lead to a strong recovery, the average of the February-June time periods from 2010-2012 was more than 200,000 jobs lower than was seen during the previous decade's three strong years.
As I wrote last year: "An authentically recovering economy making a real dent in a horribly underutilized workforce should generate six million jobs on the ground" during these five months. Obviously, it has never come even close.
After February's strong raw result, the best performance in the 13 years shown above, it appeared that 2013 might finally see something resembling a breakthrough. Friday's report more than likely blew those hopes to pieces. March's raw figure of 759,000 jobs added was worse than each of the three previous years, none of which was considered impressive. Take a look at the seasonal conversions in the right half of the graphic above: if actual jobs added in April, May, and June trail last year's figures by March's shortfall of 142,000 (901,000 minus 759,000), we'll probably see negative seasonally adjusted job growth in one or more of the next three months.
The stay-the-course excuse-making from the White House and the press will reach a roar.
There are at least six good reasons why flatlining seasonally adjusted job growth may be in store for us during the next several months. I was ready with the first five after Friday's news:
- Gas prices: Though they haven't headed towards the $4 per gallon level feared several weeks ago, they're still unacceptably high -- and there's plenty of time for Obama's decisions and his regulators to make things nasty.
- The Social Security tax hike: True, this is a restoration of a tax which had been reduced by two percentage points for two years, but most consumers probably got used to living on the extra take-home pay. Now they don't have it. This is not as serious a factor as many observers make it out to be -- if it was, the temporary cut should have stimulated a lot of economic growth in 2011 and 2012, which didn't happen -- but it's still relevant.
- The fiscal cliff's tax hikes: The press and the Obama administration act as if they never happened, but the fact is they have already begun the process of siphoning $600 billion over the next ten years away from "evil rich" businesspersons, investors, and entrepreneurs, who in many cases would have used the money to invest in capital equipment and business ideas leading to immediate and long-term job growth.
- Obamacare's regulations: To name just one, many employers are already scrambling to minimize their number of full-time workers as a result of the legislation's "full-time employment" definition of 30 hours per week. Though the hiring of additional part-timers may artificially increase reported employment in the short run, the negative impact on economic growth, and therefore overall future job growth, will be significant.
- Obamacare's taxes: Almost forgot about those, didn't you? Statist health care's 2013 hits to investment income and on medical devices, both of which took effect on January 1, have to be considered in the mix. They weren't there in previous years.
One item not on the list is the Obama administration's favorite: namely, the supposedly awful impact of the federal spending "cuts" associated with sequestration. In most cases, these aren't "cuts" at all, but are instead reductions in the trajectory of future spending growth.
But one aspect of sequestration does belong at Number 6 on the list above. It may be far more important, and damning, than we now appreciate. It took a longtime Democrat, namely CNBC's Jim Cramer of all people, to bring it up on Sunday's Meet the Press with NBC's David Gregory:
(The employment report was) stunning. Stunning. And I think a lot of it had to do with fear-mongering. ... The president did make people feel everything is going to shut down in this country because of the sequester. A lot of the CEOs were very scared. A lot of the small business people held back, the bankers would tell you that.
Go back in time. A month ago, what was the rhetoric of the White House? It was, look, this is a really big deal. Everyone has to just stop and consider how bad this is going to be for the economy. Well, the CEOs stopped. They considered and they decided, you know what, we got to hold back.
In other words, sequestration itself is not at fault. Instead, the sequestration-related blame falls squarely on the shoulders of Obama, his staff, his partisans, and his media lapdogs for their non-stop scare campaign about what would happen when it took effect.
In late 2000 and early 2001, as the markets were plunging and the Clinton-era dot-com bubble was bursting, hysterical leftist losers accused the just-elected George W. Bush and Dick Cheney of "talking down the economy." History shows that the economy was already tanking on the day Bush 43 was sworn in.
Now it appears that Obama and his partisans have begun to succeed in talking down their own economy with their reckless, substance-free threats of Armageddon. It's tempting to delight in the payback, but the fact is that this sad behavior is hurting millions of Americans -- and Team Obama doesn't seem to care.
Because of that, all I can say is: shame on you. Please stop before you make the situation -- which is already on its way to becoming pretty bad -- even worse.