No doubt all of us would take some good economic news right now, but that won’t come from the jobs report for June, which was released this morning showing the unemployment rate rising slightly to 9.2% and adding only 18,000 jobs:
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.
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.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.
The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.
Numbers from the two previous months were revised down by 44,000 jobs; April dropped from 232,000 to 217,000 and May from 54,000 to 25,000. In case you’re wondering, the economy needs to create around 120,000 jobs each just to keep up with population growth.
Another bad sign is the U-6 rate, what many economists call the “real unemployment rate,” jumped from 15.8% to 16.2%.
Just like government intervention in the economy in the 1930s prolonged the Great Depression, intervention and uncertainty with President Barack Obama’s economic policies are slowing the pace of recovery today.
While House Republicans have made it a priority to protect business owners during negotiations over the so-called “fiscal cliff,” there are signs that investment as businesses seeing more economic problems coming:
U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Corporate executives say they are slowing or delaying big projects to protect profits amid easing demand and rising uncertainty. Uncertainty around the U.S. elections and federal budget policies also appear among the factors driving the investment pullback since midyear. It is unclear whether Washington will avert the so-called fiscal cliff, tax increases and spending cuts scheduled to begin Jan. 2.
Companies fear that failure to resolve the fiscal cliff will tip the economy back into recession by sapping consumer spending, damaging investor confidence and eating into corporate profits. A deal to avert the cliff could include tax-code changes, such as revamping tax breaks or rates, that hurt specific sectors.
The Wall Street Journal does explain that the economy could see a boost when and if a deal is made to avoid the “fiscal cliff.” Don’t take that as a sign of approval from businesses and investors, but rather sign of them knowing what exactly they’re dealing with moving forward.
Over the last few days, President Barack Obama has made some interesting statements. During a townhall event in Florida on Thursday, Obama, who rode into the White House on the rhetoric of “hope” and “change,” said, “You can’t change Washington from the inside. You can only change it from the outside.”
This is sort of odd. Obama has been in the White House for nearly a full term. He was able to get some domestic policies, such as the stimulus and his health care bill, passed through a then-Democratic Congress. And while Hopey McChangeypants promised that these and other parts of his economic agenda would bring the United States out of a slump, we’re still stuck with 8% unemployment and significant economic uncertainty.
A new video from Rep. Tom Graves (R-GA) highlights what America is up against, after nearly four years of President Obama’s economic policies:
The issue of the fiscal cliff may have taken a backseat thanks to the party conventions and the distractions that have popped up along the campaign, but it looks like President Barack Obama’s tax plan, which would raise tax rates on families making more than $250,000 may be losing some steam among Senate Democrats:
President Barack Obama has made his tax position abundantly clear: Let the tax rates for the wealthiest Americans expire at year’s end.
But on Capitol Hill, some in his own party are ready to make a deal.
Senate Majority Whip Dick Durbin of Illinois is floating a six-month extension of current rates combined with budget cuts so lawmakers have time to reach a grand bargain deal early next year. Sen. Claire McCaskill of Missouri and other Democrats are open to a temporary extension of the top individual tax rate if Republicans agree to raise revenue in other parts of the Tax Code. Some liberals, like New Jersey Rep. Bill Pascrell, aren’t ruling out extending the current rates if the GOP agrees to sweeteners like a patch on the alternative minimum tax or extending dozens of lapsed business tax breaks.
And Florida Sen. Bill Nelson, along with several of his colleagues, won’t take any option off the table, knowing full well that high-stakes talks over taxes could result in any number of outcomes.
“I’ll certainly consider it,” Nelson said when asked about a short-term extension of all the Bush-era rates. “But I’ll consider anything.”
Blanche Lincoln, a former Democratic Senator from Arkansas, criticized President Barack Obama last week for the anti-business regulations that his administration put in place over the last few years:
A key small-business advocate and a former Democratic senator are teaming up to fight regulations coming out of the Obama administration that they say are hampering economic growth.
Former Sen. Blanche Lincoln of Arkansas and Dan Danner, the chief executive of the National Federation of Independent Business, signaled Wednesday that taking some of the regulatory load off smaller companies would help in the current battle against high unemployment.
At the Wednesday event, Lincoln, the campaign’s chairwoman, and Danner rarely delved into specifics about which regulations were particularly burdensome for small businesses. Instead, the pair said they wanted the small-business owners who faced those regulations to tell their own stories, and signaled that the campaign would largely avoid discussing congressional legislation.
“The objective here is not to rifleshot and pick out things that are onerous. Our objective here is to encourage the administration to take the opportunity now to look at the ways that you can interject things that will create more efficient and effective regulations,” said Lincoln.
In all, businesses in six states — Florida, Nevada, North Carolina, Ohio, Pennsylvania and Virginia — have joined the campaign.
McDonald’s CEO Jim Skinner also called for Obama and Congress to cut spending and restructure the tax code in a way that encourages businesses to grow and is more competitive internationally:
Wall Street continued its mood swings yesterday as the Dow Jones gained 423 points on Thursday, largely recovering from the previous day’s losses:
Stocks surged sharply across the board Thursday, with the S&P and Nasdaq wiping out the previous session’s losses, as investors snapped up beaten-down sectors. Despite the day’s rally, the Dow and S&P are still down more than 2 percent for the week.
The Dow Jones Industrial Average soared 423.37 points, or 3.95 percent, to end at 11,143.31, well above the psychologically-significant 11,000 level, led by Cisco and BofA. The Dow was up as many as 559 points during its intraday high.
The blue-chip has alternated between sharp gains and losses over the past eight days and has logged its fourth straight closing change of over 400 points for the first time.
The S&P 500 jumped 51.88 points, or 4.63 percent, to close at 1,172.64 and the Nasdaq rallied 111.63 points, or 4.69 percent, to finish at 2,492.68. Both indexes erased all of the previous session’s losses.
You’re no doubt wondering why the stock market has been such a rollercoaster this week. We’ve already pointed out some of the causes of that this week, such as the Federal Reserve not really having any other tools (outside of QE3, and that’s a dubious weapon) and uncertainty in European markets. But there are other factors at play, including fear, a lack of leadership in Washington and forced selling.
Mitt Romney is decisive. Sort of. You see, he didn’t say that President Obama made the recession worse….but now he’s saying that President Obama made the recession worse. I swear, this sounds like I’m talking about John Kerry with his “I voted for it before I voted against it” quip. However, Romney is now apparently full on after President Obama….this week:
Speaking at the annual July Fourth parade here on Monday, Mr. Romney told a crowd of supporters and passersby,“the recession is deeper because of our president,” adding, “it’s seen an anemic recovery because of our president.”
Mr. Romney made a similar assertion earlier when reporters had pressed him on the point near the parade staging grounds, after initially seeming to limit his commentary to the president’s handling of the recovery, which he said, “has been slower and more painful,’’ But then he went ahead and said it, that the president “made the recession worse.”
The problem for Romney is that the experts say the recession ended in 2009 which most are taking to mean that it wasn’t so bad. He’s done a rather poor job of articulating what he means, unless he’s arguing that it ain’t over yet. He also said the recovery sucks because of Obama. On that note, he’s closer to right than the press wants to admit. I seriously doubt we’re going to see a good, solid recovery with what’s been done so far.
The problem here isn’t Romney saying Obama made the recession worse. In truth, he’s campaigning in a GOP primary where most of the voters already think that. The problem is here is a man who’s running for president who can’t seem to decide from one day to the next if Obama is to blame for the severity of the economic troubles in this country.
I don’t know how many times I have made the remark to friends and family that this Great Recession is occurring like a slow-motion movie. We saw the bodies sailing through the air in our peripheral vision—the Ken Lewises, the Alan Schwartzes, the Martin Sullivans, the Richard Fulds. The stock market implosion took several weeks to come crashing to the floor, and the resultant slow-blooming dust cloud looked thick and impenetrable from a distance, yet translucent and impressionistic up close. With our telephoto lenses we could capture snapshots of the flustered figures scurrying for cover, the fragmented federal institutions falling by the wayside, the thick unbreathable hot air billowing, and the knee-jerk uninformed decision-making with its domino effects.
There are good reasons to cast blame on multiple characters in this film. The financiers were short-sighted and egocentric—and they still are, with no market force intervention to change their behavior. The overseers were, and are, just as short-sighted and egocentric. No market forces ever touch their behavior, except maybe during elections. Even the central bankers were, if not shortsighted and egocentric, at least somewhat smug and over-confident, which is also to be expected since no market forces ever touch their behavior, except perhaps the flux and reflux of Presidential favor.