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My guess is that the private sector jobs (the ADP number) will be in the 50K range while the overall economy will be 20K to 25K max.
As I admitted in this post from yesterday (July 7), I was off fairly badly on my prediction for the ADP number. Unfortunately for the economy, I was a hell of a lot more accurate on the BLS number than the supposed expert economists (via Reuters):
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists’ expectations for a 90,000 rise.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.
The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.
But don’t get duped into thinking that Thursday’s stronger-than-expected ADP private payrolls number, as well as some solid data about the manufacturing sector in the past week, is a sign that the economy is back on solid footing either.
At his “Twitter Town Hall” Tuesday, President Obama continued to paint his theme that the jobs are being created in his response to a tweet/question from Speaker of the House John Boehner:
THE PRESIDENT: — John obviously needs to work on his typing skills. (Laughter.) Well, look, obviously John is the Speaker of the House, he’s a Republican, and so this is a slightly skewed question. (Laughter.) But what he’s right about is that we have not seen fast enough job growth relative to the need. I mean, we lost, as I said, 4 million jobs before I took office, before I was sworn in. About 4 million jobs were lost in the few months right after I took office before our economic policies had a chance to take any effect.
And over the last 15 months, we’ve actually seen two million jobs created in the private sector. And so we’re each month seeing growth in jobs, But when you’ve got a 8 million dollar — 8-million-job hole and you’re only filling it 100,000-200,000 jobs at a time each month, obviously that’s way too long for a lot of folks who are still out of work.
There are a couple of things that we can continue to do. I actually worked with Speaker Boehner to pass a payroll tax cut in December that put an extra $1,000 in the pockets of almost every single American. That means they’re spending money. That means that businesses have customers. And that has helped improve overall growth.
Uh Mr. President? The economy does in fact include both public and private sectors. Using June as an example, it doesn’t really help much when the private sector creates 157K jobs in a month but the public sector cuts 139K jobs. As I noted in this post yesterday, everything is interconnected and none of the pieces of the economy operate in a vacuum. And as for the “…payroll tax cut in December that put an extra $1,000 in the pockets of almost every single American?” That “…almost every single American…” does not include the millions of people who are and have been unemployed. Roughly 14M or more. It also does not include all the people who are now “independent contractors” or “self-employed” who are not counted in the official unemployed ranks but are struggling to find work of any sort nor does it likely include many of the people who are underemployed. When you add all these folks together, you are approaching 30M people or more is my guess. Which is nearly 10% of the total population of the United States.
Reuters had this article yesterday on the “99′ers” – people who have exhausted up to 99 weeks of unemployment compensation and are still struggling to find employment:
Unlike in much of Europe, the safety net of the U.S. welfare system times out for the long-term unemployed. The federal government and many states have provided extra help for those caught up in the worst labor market in decades but the U.S. debt crisis rules out further extension of the programs.
Coyne is typical of many middle-class Americans now struggling to get by.
She used to earn $70,000 a year as an administrative assistant until her firm began to downsize and left Coyne among the growing number of Americans struggling to live on unemployment benefits, and eventually on minimal food aid.
Now Washington is considering cuts to social welfare programs to shrink a swelling budget deficit.
It may not only be Americans like Coyne who feel the pain. Some economists say the cuts could make it even harder to shrink long-term unemployment that damages the wider economy by dampening consumer demand and lowering output.
My bold. There it is once again. There is no demand for goods and services. While I see articles frequently claiming that there’s a “new normal” on unemployment due to “structural changes,” that does not explain all the recent college grads struggling to find jobs.
Unfortunately for millions of us, nothing seems to be penetrating the Beltway Bubble and the consciousness of the (un)representative elected officials.
And because I can:
Cross posted from Just A Small Town Country Boy