News America Doesn't Need: Employment Figures Stink Up the Joint

The economy continues to be the top story as it has been since the real estate market and credit markets crashed. Employment figures remain in the doldrums and the recovery has been far slower and weaker than anyone could have hoped for.

The May and June figures give little reason to hope that a lasting recovery is in the offing.

U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dousing hopes the economy would regain momentum in the second half of the year.

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.

The unemployment rate climbed to a six-month high of 9.2 percent, even as jobseekers left the labor force in droves, from 9.1 percent in May.

"The message on the economy is ongoing stagnation," said Pierre Ellis, senior economist at Decision economics in New York. "Income growth is marginal so there's no indication of momentum.

U.S. stock index futures fell sharply on the data, while U.S. bond prices rose. The dollar rose against the euro.

The government revised April and May payrolls to show 44,000 fewer jobs created than previously reported.

There's no way to put a positive spin on any of this. Job creation is key to a recovering economy, and the lack of jobs means not only that the unemployment rate isn't going to improve, but that businesses aren't seeing the kind of expansion and growth that would spur them to hire more people.

This is bad news for the Obama Administration, which needs the economy to recover in order to convince voters that he deserves a second term in office, but the GOP isn't exactly offering anything more than demagoguery. The real estate morass is the real impediment to a lasting economic recovery, and it will take years to see the effects of the foreclosures and lost real estate values be assumed by the parties to those transactions (and by the taxpayers who have picked up additional losses in a vain attempt by politicians to stabilize the markets).

There are no easy answers and there are no silver bullets that will automagically create millions of jobs or bring back the construction industry and related industries that were lost because of the real estate crash. A new stimulus package wont solve matters either, and the prior stimulus package (ARRA of 2009) spent hundreds of billions on transfer payments to states to prop up state budgets that were crashing down under massive deficits rather than pumping hundreds of billions of dollars into infrastructure investments as was claimed. Had that money gone to true infrastructure projects, we might see more of a recovery in the construction industry. Alas, that was not to be.

Instead, we'll continue to see the economy limp along despite the best and worst intentions of politicians across the political spectrum.