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United States News Title: US economy created no job growth in August, data show Employment growth ground to a halt in August, as sagging consumer confidence discouraged already skittish U.S. businesses from hiring, keeping pressure on the Federal Reserve to provide more monetary stimulus to aid the struggling economy. Nonfarm payrolls were unchanged last month, the Labor Department said Friday. It was the first time since 1945 that the government has reported a net monthly job change of zero. The August payrolls report was the worst since September 2010, while nonfarm employment for June and July was revised to show 58,000 fewer jobs. “The bottom line is this is bad,” Diane Swonk, chief economist with financial services firm Mesirow Financial, told CNBC Friday. Despite the lack of employment growth, the jobless rate held steady at 9.1 percent in August. The unemployment rate is derived from a separate survey of households, which showed an increase in employment and a tick up in the labor force participation rate. While the jobs report underscored the frail state of the economy, the hiring slowdown probably will not be seen as a recession signal as layoffs are not rising that much. A strike by about 45,000 Verizon Communications workers helped push employment in the information services down by 48,000. Allowing for the decline from the Verizon strike, private payrolls would have risen by 62,000. "August was a pretty rough month for the economy," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pa. "We saw financial markets tighten. I think businesses sort of responded by putting hiring on the back burner," he said before the release of the report. An acrimonious political fight over U.S. debt, which culminated in the downgrade of the country's AAA credit rating from Standard & Poor's, and a worsening debt crisis in Europe ignited a massive stock market sell-off last month and sent business and consumer confidence tumbling. With the unemployment rate stuck above 9 percent and confidence collapsing, President Barack Obama is under pressure to come up with ways to spur job creation. The health of the labor market could determine whether he wins a second term in next year's elections. Obama will lay out a new jobs plan in a speech to the nation next Thursday. “The economy is slowly grinding to a halt,” said Steve Blitz, senior economist for ITG in New York. “The problem, however, on the policy side is that I wonder whether the numbers are truly weak enough to galvanize a political response.” Story: Stock not recovering from early session plunge “To me, the major take away from this number is that it keeps policy in limbo — it’s bad but not bad enough,” he added. The weak employment data could strengthen the hand of officials at the U.S. central bank who were ready at their August meeting to do more to help the sputtering economy. The Fed cut overnight interest rates to near zero in December 2008 and it has bought $2.3 trillion in securities. Many analysts say its arsenal is now largely depleted, although they expect it to do more to try to prop up growth. Dodging recession Although hiring cooled, there is little sign companies responded to the darkening outlook by laying off workers. First-time applications for state unemployment benefits have hovered around 400,000 for weeks. The steady jobless claims, relatively strong consumer spending, continued demand for manufactured goods and increases in industrial production suggest the economy will steer clear of recession. "We do not expect the economy to slump, but rather to slouch and stagger," said Patrick O'Keefe, head of economic research at accounting firm J.H. Cohn in Still, analysts warn the economy is so weak, any fresh shock could send it tumbling. In the first half of the year, the economy expanded at less than a 1 percent annual rate, bad news for the estimated 14 million unemployed Americans. If job growth does not accelerate, it could take more than four years to return to the pre-recession employment level. Private payrolls increased only 17,000 after rising 156,000 in July. Government employment fell 17,000, contracting for a 10th straight month. The decline in government payrolls was tempered by the return of 23,000 state workers in Minnesota after a partial government shutdown in July. Details of the employment report were weak, with manufacturing payrolls falling 3,000, reflecting the slump in business confidence. Factories added 36,000 new workers in July as disruptions to motor vehicle production caused by a shortage of parts from Japan eased. The average work week dropped to 34.2 hours, the fewest since January, from 34.3 hours. Average hourly earnings fell three cents.
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If Obama had embraced his own deficit commission's report last December, which simplified the tax code and lowered the top personal tax rate to 23% and top corporate tax rate to 25%, the economy would be in a lot better shape. Unfortunately, the economy is only going worse thanks to Obama's EPA which is poised to shut down 8% of the coal-fired electrical plants in the U.S. next year, after they already shut down a big portion of oil exploration in the U.S. Obama is also likely to stop the Keystone XL pipeline, which would deliver oil from Alberta to refineries in Texas and Louisiana. This is the most anti-growth, anti-business administration in the history of the country. Thankfully, he is going to get tossed out on his rear end next November. I think that it will be a long time before American's are ready to embrace left wing lunatics again.
There's more oil exploration occuring in the US today than there was in 2008. Regardless, study after study shows that even if the US were currently harvesting all of its known reserves the impact on pricing would be minimal. This is the most anti-growth, anti-business administration in the history of the country. Payroll tax reductions...extension of tax cuts and expansion of others... That's right out of the supply side text book. What you folks fail to realize is that Obama is running the same playbook that has been run for 22 of the last 30 years...no wonder you hate it. It's track record sucks.
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