Republican Convention 2008

It's the Economy, Stupid, Redux?

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The jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers cut payrolls for the eighth month in a row. Job losses in June and July turned out to be much deeper. The economy lost a whopping 100,000 jobs in June and another 60,000 in July, according to revised figures. Previously, the government reported job losses at 51,000 in each of those months.

So far this year, job losses totaled 605,000.

The latest snapshot was worse than economists were forecasting. They were predicting payrolls would drop by around 75,000 in August and the jobless rate to tick up a notch, to 5.8 percent. The grim news comes as the race for the White House kicks into high gear. The economy's troubles are Americans' top worry.

On the flip side, worker wages gained about 0.4 percent in August over July. And second-quarter growth (latest available) was 3.3 percent (up from an original 1.9 percent estimate).

More here.

reason's Matt Welch on bubble bursting here.

Seasonal adjusted uemployment rates by month for past 10 years here.

Average annual unemployment rates going back to 1948 (fascinating!) here.

NEXT: Bill Me, Baby

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  1. The economy is growing while the unemployment rate goes up and wages go down? Huh?

  2. Where’s Carville to explain this with his stupid twang accent?

  3. The new president will wave his magic wand and fix the economy!

  4. Every 4 years the politicians put forth the idiotic notion that the economy is created by government and can be managed by government.

  5. What?— I dunno, 6.1% isn’t too bad anyway, but its entirely possible that between productivity gains &c. that the economy is growing, those lucky enough to be in good jobs are getting raises, and its just the poor saps in Detroit and the mortgage business that are getting canned.

    Or the numbers suck.

  6. Gil —

    I’ve never heard of a serious modern politician that claimed that the government *creates* the economy.

    You are right though, that they really love the pander of the notion that they can *control* it.

  7. I’ve never heard of a serious modern politician that claimed that the government *creates* the economy.

    They put forward the idea they create jobs, which is basically the same thing.

  8. Can you say “Misery Index”?

    10% inflation with 10% unemployment == 20% misery index.

  9. Its cute who Republicans still invoke the specter of Jimmy Carter. Almost as cutely pathetic as when Democrats in 1980 were still talking about Herbert Hoover.

  10. The economy is growing while the unemployment rate goes up and wages go down? Huh?

    Sure. No problem, employment/unemployment is a lagging indicator. Look at the graph for the last 10 years. The last recession ended, IIRC, in November of 2001. Yet unemployment continued to rise until peaking in June of 2003.

    There is no doubt that the economy has weakened over the past several months, and despite the recent good news in terms of GDP, may stay weak for awhile. As such, for unemployement to go up is not something shocking.

    As for wage growth, keep in mind it is a weighted average of all wages. So again it is possible that the wage goes up while unemployment goes down.

    Unusual, but not impossible or all that shocking.

  11. I’ve read that the economic growth figures are based on an assumption that we are experiencing the lowest inflation in five years.

    Does that sound plausible to you?

  12. Almost as cutely pathetic as when Democrats in 1980 were still talking about Herbert Hoover.

    I bet Obama will compare Bush to Hoover within the next 2 weeks.

    Any takers?

  13. Its cute who Republicans still invoke the specter of Jimmy Carter.

    I came of age, got married, and tried to raise a family during the Carter years. Those times are never going to be erased from my memory.

    By the way, have never voted for a democrat or republican for president. I voted for Ed Clark in 1980, and have voted LP every presidential cycle since then.

  14. “I’ve read that the economic growth figures are based on an assumption that we are experiencing the lowest inflation in five years.”

    Probably true because they take out food and fuel making it a B.S. number.

    “I bet Obama will compare Bush to Hoover within the next 2 weeks.”

    Hes too young to do that. Plus everyone that remembers Hoover is dead.


  15. I came of age, got married, and tried to raise a family during the Carter years. Those times are never going to be erased from my memory.”

    Well it might work on you. But a good part of the electorate this year either wasn’t born or was too young to remember it, so invoking it makes Republicans look old. Most people now just think of Jimmy Carter as that guy who builds houses.

  16. Most people now just think of Jimmy Carter as that guy who builds houses.

    Most people now don’t think of Jimmy Carter at all. Which is as it should be, since we should all try to ensure he never has any substantive role in national discourse ever again.

  17. Well it might work on you. But a good part of the electorate this year either wasn’t born or was too young to remember it, so invoking it makes Republicans look old.

    Not particularly relevant. I never experienced the depression or WWII. But the people that did controlled government right up through GHW Bush.

    Right now, the boomers (people my age and older) are still struggling to take the reins aways from old geezers like McCain.

    Obama may be the darling of the younger generation, but they don’t vote consistently nor do they hold any position of power at any level of government.

    Besides, people that panic over 6% unemployment just plain piss me off.

  18. Besides, people that panic over 6% unemployment just plain piss me off.

    Personally I’d give a pass to the people *who are in the 6%* to be pissed off.

    Wouldn’t you?

  19. The new president will wave his magic wand

    Clinton flashback!

  20. From Gallagher:

    one fourth of the people that I meet are stupid.

    people complain about 10% unemployment . . .

    me, I complain about 15% of stupid people that got jobs.

  21. By the way, I was married with kids and unemployed when Gallagher made that joke. I still laughed at it.

  22. Well, we know Bush doesnt care about the economy and neither does his “mini-me” sidekick McBush. they both seem to think everything is just hunky dory. I guess since they have MILLIONS in the bank it doesnt matter.

    Jiff
    http://useurl.us/12m

  23. And second-quarter growth (latest available) was 3.3 percent (up from an original 1.9 percent estimate).

    Nationwide, sure. But what are the numbers in MI, OH, and PA? Those are the states that will count in November.

  24. I have been unemployed for 4 years now and even I don’t think it’s that bad.

  25. The business cycle happens. 6.1% is not historically high by any standard. As pointed out above it is a lagging indicator. As the oil bubble bursts and the housing market works itself out, growth should go stay around 3% and the UE rate will come down again sometime next year. Even with a housing bubble bursting and an oil shock, the unemployment rate is still equal to 1994, when Bill Clinton was in office and presiding over a “booming economy.

  26. Didn’t a mandated minimum wage hike just come to pass? Didn’t the government effectively force people out of work with it?

  27. Very interesting. My employer has job vacancies of about 10% in everything from unskilled assembly to skilled blue collar to management and can’t find qualified employees at good wages. [Plenty of applicants who fail drug test, don’t show up for second interview, don’t show up for work after first week, etc. etc.] Maybe things will pick up but it would appear that with 5% or lower, you are scraping the barrel.

  28. The business cycle doesn’t generally happen in 5-6 years, though.

    We’re in what’s supposed to be the upswing of the business cycle, after the recession of 01. Were it not for the financial shenanigans that turned the downturn in the housing market into a cascade of crises in the markets, that’s where we’d be.

    OTOH, it was consumer spending based largely on those same shenanigans that made the 01 recession relatively mild.

    The last time an economic downturn was caused by – as opposed to resulting in – a downturn in the financial markets? 1929.

  29. As long as the roots are not severed, all is well. And all will be well in the garden. . . . Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.

  30. With higher unemployment, you get a better caliber of staff taking your order at McD’s. So I guess there is an upside.

  31. “The last time an economic downturn was caused by – as opposed to resulting in – a downturn in the financial markets? 1929.”

    1987 Joe. And 2001 after the tech bubble burst. Further, we are seven years into the business cycle and the economy just suffered an enormous price shock from oil. You might have missed it but the price of oil doubled in the last year. It was in a few of the papers.

    It would be nice if you actually you know thought about economics in terms beyond “Democrat in office, economy good, Republican in office, economy bad”.

    Joenomics: So easy a caveman can do it.

  32. There wasn’t a recession in 1987, John.

    The tech bubble burst in 2000, and the capital swiftly moved into the go-go real estate market.

    Further, we are seven years into the business cycle and the economy just suffered an enormous price shock from oil. An event which took place after the housing bubble popped, and after the trends started to turn south.

    You, John, are perhaps the most poorly informed person to regularly comment on these threads this side of Gil Martin. Seriously, learn something before you decide I don’t know what I’m talking about, just because it isn’t what you want to hear.

  33. Oh no, I get it, there was a decline in the stock market in 1987, and then, after 3-4 years of growth, it caused a recession.

    Dumb as an iron rail, John.

  34. And another round in the never-ending grudge match between joe and John.

    Quittin time on Friday afternoon. I hope you two enjoy beating each other to a bloody pulp.

  35. There wasn’t a recession this time Joe, outside of your imagination. There was a slowdown in 2000 and 01 primarily because of the tech bubble bursting. The asset bubble in Japan burst in the early to mid 90s before the slowdown. There was a slowdown in 87 that happened as a result of the 87 crash. I am very well informed, you are just so ignorant and biased you won’t listen to anything that doesn’t fit the Dem good republican bad format. Caveman logic is about as high as you go on any subject that is even remotely political, which is sad because you are not a stupid person, just grossly narrowminded and dogmatic. Try thinking about econ sometime. It is a great subject.

  36. I’m done. I had a point, I made it, and I had a bug to slap away.

    By all means, if anyone who can put the shapes in the right holes in the box cares to address what I wrote, I’m all ears.

  37. I thought between 1982 and 1990 we had growth, and then a pretty nasty recession in 91-91?

  38. There wasn’t a recession this time Joe, outside of your imagination. A bit early to make that pronouncement, chief. Actual economists are talking about a slowdown which might or might not qualify as a recession, and which will deepen in the short term.

    There was a slowdown in 87 that happened as a result of the 87 crash.

    Not a recession.

    The asset bubble in Japan burst in the early to mid 90s before the slowdown. The early-to-mid 90s were AFTER the recession, John.

    And 2001 after the tech bubble burst. Ten years after the previous recession, and investment capital as a whole was quickly replaced through the housing market. IE, not the cause of the recession.

    No, but seriously, the only possible reason you don’t like what I’m writing is cuz i kant do teh ekinomiks.

    I love people who get to the demand curve on page 6 of a text book and think they’re knowledgeable.

  39. BDB,

    Growth slowed a bit in 1987, then picked back up, until 91-92.

    Oh, and, oogo booga, joe kill many elk with stick!

  40. “Oh, and, oogo booga, joe kill many elk with stick!

    Where’d that come from?

  41. Oh, nevermind. I get it.

  42. Oh, and, oogo booga, joe kill many elk with stick!

    Can you field dress it? Did you attend a town meeting once? Then you might be the next VP!

  43. creech- your employer is desperate to find qualified candidates, yet is comfortable rejecting them *after* they’ve chosen to hire, based on the results of a drug test?

    Nothing personal, but that company deserves its pain.

  44. Personally I’d give a pass to the people *who are in the 6%* to be pissed off.

    Sure. If unemployment reached .0001%, then the .0001% are pissed off.

  45. Joe-5:16

    Thank you for not including me on your most uninformed list.

  46. Yeah, what Don Mynack said.

    As soon as that came out, I was thinking, is this somehow related to the rise in minimum wages? When can we get the figures as to how many of the newly unemployed are minimum wage earners? It would be a dream if there was a correlation so we can ream the Democrats with the news. Hasn’t anyone jumped on this already?

  47. It’s Friday, and we have 2 special bailouts for you this weekend. They’re named “Fannie & Freddie.” I wonder if the Chinese government is among the shareholders slated to be wiped-out? That should lead to some geopolitical fun. (I’m sure it’s all those damn Libertarians’ fault!)

  48. I guess that would depend on who you ask! Dictator Bush and his lil mini-me sidekick “McBush” think everything is just hunky dory! Just shows they have lost complete touch with the sheeple.

    Jish
    http://www.anonymize.kr.tc

  49. So far this year, job losses totaled 605,000.

    How many of those who lost their jobs are still unemployed? And what about job gains? While we do have problems, it’s not so horrible as the media makes it out to be.

  50. Brandybuck-

    Its not the media. If anything, they are underselling the reality. Don’t tell me you are one of those people who finds the gvt.’s numbers credible or reliable.

  51. liberymike,

    The media thrives on bad news. No one buys a newspaper or switches channels to a talkshow to hear good news. Doom and gloom sells.

    I don’t find the government’s numbers particularly reliable, but I do know the corresponding “jobs created” statistics are NEVER reported by the media. We’re not hearing the whole story. I’m not saying the economy is great, because it’s not. Unemployment is high. But we’re not in the middle of the next Great Depression like the media is implying.

  52. “creech- your employer is desperate to find qualified candidates, yet is comfortable rejecting them *after* they’ve chosen to hire, based on the results of a drug test?

    Nothing personal, but that company deserves its pain.”

    Deserved repeating.

    Don’t piss away your liberty. I’m tired of the war on some drugs piss testing. It doesn’t prevent accidents in the workplace and does not increase the reliability of potential employees. It is a waste of time, money and dignity.

  53. But so many well connected Democrats & Republicans make so much tax money from the piss test “industry.” How could such a good transfer from the productive/apolitical types to the nonproductive/political people who were meant to rule us all be bad?

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