What's behind the bad March job numbers?
-
Robert Reich Guest blogger
Bad news on the economy. It added only 88,000 jobs in March 鈥� the slowest pace of job growth in nine months.
While the jobless rate fell to 7.6 percent, much of the drop was due to the labor force shrinking by almost a half million people. If you鈥檙e not looking for work, you鈥檙e not counted as unemployed.
That means the percentage of working-age Americans either with a job or looking for one dropped to 63.3 percent 鈥� its lowest level since 1979.
The direction isn鈥檛 encouraging. The pace of job growth this year is slower than its pace last year.聽
What鈥檚 going on? The simple fact is companies won鈥檛 hire if consumers aren鈥檛 buying enough to justify the new hires. And consumers don鈥檛 have enough money, or credit, or confidence to buy enough.
It鈥檚 likely Americans are beginning to feel the pinches of January鈥檚 hike in the payroll tax combined with the government budget cuts known as the sequester. Increases in gas prices haven鈥檛 helped. All are taking money out of the pockets of most people 鈥� whose job situation remains precarious. So they can鈥檛 and won鈥檛 buy much.
One indicator: Retailers cut their staffs in March 鈥� by 24,100.
Yes, the stock market has rebounded. But only a small portion of Americans are affected by the rebound. The richest 1 percent own 35 percent of all shares of stock; the richest 10 percent own 90 percent.
And, yes, housing prices have stopped falling, and construction of new homes has picked up. The construction sector added 18,000 jobs in March.
But the turnaround in housing isn鈥檛 because prospective homeowners have been able to get new mortgages. It鈥檚 because investors are buying or building homes to rent. And a buoyant rental market doesn鈥檛 make most people feel wealthier.
Perhaps the most disturbing aspect of all this is that we鈥檙e in the fifth year of a supposed economic recovery from the second-worst economic downturn of the past century, and we鈥檙e still not nearly back on track. Instead, we鈥檝e had the most anemic recovery in history.
A Gallup survey released Thursday showed that the percentage of Americans holding full-time jobs has remained essentially unchanged over the past year. With 12 million people out of work and another 8 million holding part-time jobs who鈥檇 rather have full-time ones, this just isn鈥檛 nearly good enough.
We鈥檙e experiencing the burden of austerity economics and the continued scourge of widening inequality. Both are squeezing average Americans. Yet it鈥檚 impossible to have a buoyant and sustained recovery without a large and growing middle class.
