[Marxism] U.S. Showed No Job Growth in August; Rate Stays at 9.1%

Louis Proyect lnp3 at panix.com
Fri Sep 2 07:02:02 MDT 2011


(This is the first zero growth rate since 1945.)

NY Times September 2, 2011
U.S. Showed No Job Growth in August; Rate Stays at 9.1%
By SHAILA DEWAN

The economy showed no job growth in August, the first time there has 
been no increase in net jobs in the United States in 11 months.

The flat performance in the job market was down sharply from a revised 
85,000 gain of jobs in July, the Labor Department said Friday, and was 
far below a consensus forecast by economists of 60,000. The unemployment 
rate stayed constant at 9.1 percent in August.

The nonfarm payrolls numbers were unchanged in August after a prolonged 
increase in economic anxiety that began with the brinksmanship in 
Washington’s debt-ceiling debate and was followed by the country’s loss 
of its triple-A credit rating, stock market whiplash and renewed 
concerns about Europe’s sovereign debt.

The jobs figure, a monthly statistical snapshot by the Department of 
Labor, may appear more negative because it does not include 45,000 
Verizon workers who were on strike when the survey was taken.

Economists blamed both sluggish demand for goods and services and the 
heightened uncertainty over the economy’s direction for the slow pace of 
job creation, saying political deadlock was in effect creating economic 
paralysis.

“Business confidence surveys have uniformly pointed to businesses who 
are not laying off workers, but who are holding off on hiring while they 
wait for a clearer outlook — an outlook that became much cloudier and 
more volatile” beginning with the debt-ceiling battle in July, said 
Ellen Zentner, the senior United States economist for Nomura Securities.

There seems to be a consensus among economists that the United States 
will skirt a double-dip recession but that growth will linger at levels 
barely perceptible, much less comforting, to Americans without jobs.

“We’ve got at least another 12 months of difficulty to go through,” said 
Steven Ricchiuto, United States economist for Mizuho Securities USA. “I 
know that doesn’t help politicians who are worried about the elections.”

The poor showing is likely to be seized on by President Obama in his 
prime-time address to Congress on Thursday as proof that bolder 
government action is needed to create jobs.

There is considerable skepticism that any ambitious plan to bolster job 
growth would be politically feasible. But several economists said that 
given the fragility of the recovery, the payroll tax cut and extended 
unemployment benefits, both set to expire at the end of the year, should 
be renewed.

“It’s probably not the time for adding to fiscal drag,” said Jim 
O’Sullivan, the chief economist for MF Global. He said that together the 
tax cut and unemployment account for 1 percent of the gross domestic 
product.

Some analysts downgraded their forecast for the jobs numbers on Thursday 
based on new economic indicators including weaker online job 
advertising, a rise in announced layoffs and a growing pessimism about 
the job market by consumers. A major report on manufacturing showed 
slowing employment growth and shrinking production and new orders.

But other indicators suggested that fears of recession have outstripped 
reality. Consumer confidence dropped sharply and pending home sales 
dipped, but in July retail sales increased and orders for durable goods 
– expensive items often purchased on credit — were up four percent. On 
the other hand, a report on chain-store sales indicated slack 
back-to-school shopping, further slowed by Hurricane Irene.




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