By Paul Solman.
Private companies hired only 83,000 new workers in May — the fewest in nearly a year. Local governments cut 28,000 jobs last month, the most since November. They have cut jobs for 22 straight months.
From the New York Times: “There are just so many people jumping around with great specialized résumés and willing to work for nothing,” said Bob Hiller, 64, an architect in Tucson who was laid off in October 2009. “It’s hard to compete.”
Mr. Hiller’s jobless benefits will soon run out because Arizona’s Legislature never updated a state law that would allow workers to receive more federal money.
A mere 54,000 jobs added in May, says the survey of employers, in contrast to the consensus forecast of 180,000. An unemployment rate going back up, according to the survey of households. Our U-7, the most inclusive index of under- and unemployment, remained basically unchanged at 17.9 percent, representing nearly 29 million of our fellow Americans. Four million of them out of work for more than a year, a great many eminently hire-able. The headline in the Financial Times Friday morning makes the implications of today’s dreary unemployment jump vivid: “US jobs data escalate fears of double dip.”
With the future probabilistic and therefore unknowable (or unknowable and therefore probabilistic), there’s been much to-ing and fro-ing about the shape and even orthography of an economic recovery, as we explored with economist Simon Johnson and Campbell’s alphabet soup a year ago.
Would economic growth take the form of a “V” -– sharp up after sharp down? A “U,” with a longer bottom? A long “U” –- Johnson called it a “bathtub” –- with a much longer bottom? Or the dreaded “W”: Down, up, and down yet again? The “W” is the double dip.
Again we warn, as we do every month, against over-reacting to any given month’s data. The numbers come from samples. Some people don’t respond. Extenuating circumstances like the Japan earthquake may be having a big but temporary effect. On the other hand, the job gains of March and April were revised downward by 39,000, almost as many jobs as were supposedly added in May.
To those of us in the business of interviewing Americans, the numbers don’t come as much of a surprise. Indeed, what’s taken us off guard is the seeming imperviousness of the stock market to what seems to be happening around it. Only a few days ago, when the Dow soared, I wondered aloud if the big U.S. companies in the Dow Jones average were not now buffered from the domestic economy because so much of their business is done abroad.
But I was just doing what I mock in others: interpreting daily stock data as if clear meaning is there to be extracted. Longer term, stock prices do a decent job of reflecting the economic mood of Americans and American prosperity, or lack of it. The Dow is down 2 percent for the week as I write this (11 a.m. EST), more than 4 percent over the past month.
On the other hand, it’s up around 6 percent since January 1, more like 20 percent in the past year.
A last word on the unemployment numbers. Even though college grads are out of work as perhaps never before, they’re doing better than their non-grad rivals. But less than 30 percent of Americans have a four-year college degree and that percentage may be going down. (Population growth in the U.S. comes from immigration these days and at least in their home countries and when they first get here, today’s immigrant groups attend college at lower rates than the population as a whole.)
A recent piece of ours debated the relationship between technology and under-/unemployment.
According to one view, the longer-term implications for workers without marketable skills are scary indeed.
MIT’s Erik Brynjolfsson offered this grim forecast at the end of the story:
"I’m an optimist about technological progress, but I’m not nearly as optimistic about our ability to keep up with it. We have got some real problems. I just want to make it clear that the problem is not stagnation. The problem is more serious in some ways, which is our basic human ability to keep up with technological progress. That problem is going to get worse and worse as technology speeds faster and faster."
The Wall Street Journal has a neat interactive graph that puts today’s unemployment rate in historical perspective.
We’ve often pointed out that today’s numbers are actually higher than those in the past, due to changes in methodology and the number of Americans now in jail or on disability who probably would be unemployment if in the job market. But the WSJ graph is a useful way to highlight the historical significance of today’s joblessness.