Join The Census, See Your Neighborhood, Get Laid Off In The Near Future

Chart from Calculated Risk. Calculated Risk:

This graph shows the job losses from the start of the employment recession, in percentage terms – but this time aligned at the bottom of the recession.

The current recession bounced along the bottom for a few months – so the choice of bottom is a little arbitrary (plus or minus a month or two).

Notice that the 1990 and 2001 recessions were followed by jobless recoveries – and the eventual job recovery was gradual. In earlier recessions the recovery was somewhat similar and a little faster than the decline (somewhat symmetrical).

The dotted line shows the impact of Census hiring. In May, there were 564,000 temporary 2010 Census workers on the payroll. Starting in June, the number of Census workers will decline – and the two red lines will meet later this year.

Felix Salmon:

No single datapoint — not even the monthly payrolls report — can in and of itself mark the beginning of the end of the recovery. But this month’s numbers are still depressing, coming in well below lofty expectations, and having no silver lining: there were no upward revisions to previous months, there was no big fall in the unemployment rate, there was no obvious reason to believe that the 411,000 temporary employees hired in May to work on Census 2010 would otherwise have found private-sector employment.

The really recalcitrant number here is the unemployment rate, which is staying stubbornly near 10% no matter what payrolls do: when they’re healthy, more people start looking for work. But if you want a hint of a glimmer of hope, at least the broad U6 underemployment rate is heading in the right direction: it was 16.6% in May, down from a whopping 17.1% in April. (But it’s still higher than it was at the beginning of the year.) And more generally, of course, this degree of labor-market weakness is yet more reason to believe that inflation simply isn’t an issue for the foreseeable future, especially given the strength of the dollar. So the Fed is going to be happy keeping rates at zero for the time being: remember it has a dual mandate, and that Ben Bernanke should care just as much about bringing the unemployment rate down as Barack Obama does.

Ezra Klein:

If you’re looking for bright spots, you might focus in on the fact that 343,000 workers who were unwillingly part-time got upgraded to full-time. But you really have to be looking.

Doug Mataconis:

Additionally, the U6 unemployment rate, which is the broadest measure of unemployment and includes those who have simply given up looking for a job and part-time workers who would prefer to work full-time stands at 16.6%, down from last month but still incredibly high.

The lack of significant job growth in the private sector is a sign that the recovery, to the extent it exists, is incredibly weak and that employers are still not willing to take the economic risk of hiring additional workers. As long as that’s the case, we’re likely to see the unemployment rate stay well above nine percent for some time to come. Politically, that’s nothing but trouble for President Obama and the Democrats.

David Frum at FrumForum:

This economy is not reviving. President Obama’s so-called stimulus is proving to have been more like a painkiller. It helped some time for a temporary period at enormous cost. But now, NOW, is the moment for Republican alternatives.

Start with

1) Revive the payroll tax holiday

2) Welcome a lower dollar

3) Postpone the implementation date of all mandates in the federal healthcare plan by 36 months

4) Extend the Bush tax cuts for 5 more years

5) A crash program to approve and commence construction of 20 new nuclear power plants within the next 24 months.

Robert Reich at Huffington Post:

The only reason the economy isn’t in a double-dip recession already is because of three temporary boosts: the federal stimulus (of which 75 percent has been spent), near-zero interest rates (which can’t continue much longer without igniting speculative bubbles), and replacements (consumers have had to replace worn-out cars and appliances, and businesses had to replace worn-down inventories). Oh, and, yes, all those Census workers (who will be out on their ears in a month or so).

But all these boosts will end soon. Then we’re in the dip.

Retail sales are already down.

So what’s the answer? In the short term, more stimulus — especially extended unemployment benefits and aid to state and local governments that are whacking schools and social services because they can’t run deficits.

But the deficit crazies in the Senate, who can’t seem to differentiate between short-term stimulus (necessary) and long-term debt (bad) last week shot it down.

In the longer term, we need a new New Deal that will bolster America’s floundering middle class. Expand the Earned Income Tax Credit and extend it up through the middle class. Finance that extension through higher marginal income taxes on the wealthy, who have never had it so good.


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Filed under Economics, The Crisis

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