Story from Bloomberg News.
Employment in the U.S. unexpectedly stagnated in August and the jobless rate held at 9.1 percent as American employers became less confident in the strength of the recovery.
Payrolls were unchanged last month, the weakest reading since September 2010, after an 85,000 gain in July that was less than initially estimated, Labor Department data showed today in Washington. The median forecast in a Bloomberg News survey called for a rise of 65,000. Hourly earnings and hours worked both declined. The August data included a 48,000 drop in information industry jobs, mostly reflecting striking Verizon Communications Inc. workers.
The first U.S. credit downgrade, political squabbling over the budget and mounting fear of a default in Europe caused the Standard & Poor’s 500 Index to plummet 17 percent from July 22 to Aug. 8, prompting companies and consumers to cut back. The lack of hiring is one reason Federal Reserve Chairman Ben S. Bernanke last week said the central bank still has tools available to stimulate growth.
“Net employment flat-lined in August,” Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, who forecast a decline of 5,000, said before the report. “When the outlook is uncertain, businesses don’t hire. Calls that we’re on the cusp of a recession or already there are not completely unwarranted.”
Estimates of the 86 economists surveyed by Bloomberg for overall payrolls ranged from a decline of 20,000 to a 160,000 increase. The unemployment rate was projected to hold at 9.1 percent, according to the survey median. Estimates ranged from 9 percent to 9.2 percent.
Don Surber comments:
Only a mouth-breathing, in-bred moron was surprised to learn that President Obama’s policies have put the economy in a stupor. I thought Bloomberg News was a wire service that specialized in commerce. Have they no one at that agency who does anything but kiss-up to the socialists who are now in charge of our government?
What a mess. The month of August began with the first downgrade of America’s credit rating in memory. That failure alone should cost him his job.
Youth unemployment tops 25%. Black unemployment is at 16.7%. Hispanic unemployment is at 11.3%.
14 million people are jobless.
6 million people have not had a job for more than 6 months.
86 million working-age people are not in the job market.
[…]Few companies are expanding as they wonder what in the heck his EPA policies will do to them, what in the heck his health insurance policies will do to them and what in the heck his tax policies will do to them. The 9.1% unemployment rate in August matches July as the economy hits the horse latitudes, where it will stay for about another year until hope of a new regime change begins to take hold.
Barack Obama’s presidency has hurt the poor and minorities the hardest. Their jobs were the first to go and on his watch, 1.5 million fewer Americans have jobs than on his Inauguration Day. This is terrible. He may have inherited a recession but he seems bound and determined to make it a depression.
What does Bloomberg mean by “unexpectedly”. Does letting the government take money from taxpayers and businesses create jobs?
CBS News reports on what the stimulus does:
ABC News reports on more stimulus spending:
And this one features a real economist:
Let’s learn some economics and find out why Obama’s government spending, green jobs, tax the rich, regulate businesses approach hasn’t work to create jobs.
Economics in One Lesson
Perhaps it is time to review Henry Hazlitt’s book on basic economics “Economics in One Lesson”. Let’s look in chapter 4, which is entitled “Public Works Mean Taxes”.
Excerpt from that chapter:
Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.
And consider Chapter 5 as well, entitled “Taxes Discourage Production”.
In our modern world there is never the same percentage of income tax levied on everybody. The great burden of income taxes is imposed on a minor percentage of the nation’s income; and these income taxes have to be supplemented by taxes of other kinds. These taxes inevitably affect the actions and incentives of those from whom they are taken. When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only fifty-two cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected. It does not expand its operations, or it expands only those attended with a minimum of risk. People who recognize this situation are deterred from starting new enterprises. Thus old employers do not give more employment, or not as much more as they might have; and others decide not to become employers at all. Improved machinery and better-equipped factories come into existence much more slowly than they otherwise would. The result in the long run is that consumers are prevented from getting better and cheaper products to the extent that they otherwise would, and that real wages are held down, compared with what they might have been.
There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.
And the results we see today are consistent with the predictions of basic economic theory.