Today, the Department of Labor released their monthly report on employment, and it was ugly. The headline news is that only 54,000 jobs were created and unemployment rate increased to 9.1%. Of course, one can argue that the rise in the unemployment rate reflects nothing more than an increase of 272,000 in the number of people looking for work. Normally, that is a good sign, when people decide to start looking again. This time, it just may be a sign of desperation . . .
A little deeper look shows the private sector gained 83,000 jobs, while governments laid off 29,000. Last month, the private sector gained 251,000 jobs. This is a huge decrease in job creation, reflecting the stalled economy, as discussed frequently in this blog.
Worse, we found out the March and April reports over-stated actual job creation by 39,000 jobs.
Maybe worst, the number of people unemployed over six months increased from 5.8 million to 6.1 million. This is the hardest demographic to help and a real human tragedy.
The Dow futures dropped 100 points on this report. I suspect the President's job approval dropped at the same time. No incumbent president has ever been re-elected when the rate of employment was over 7.2%. The President only has 17 months to change this, which will probably not be enough time. Given that this recession was not a garden-variety recession, where employment rebounds relatively quickly, my prediction is that the Republicans can win with any serious candidate.
