July’s jobs report is a mixed-bag of good news/bad news. The nation added more jobs than was expected, but it wasn’t enough to stop the unemployment rate from growing yet again.
Most jobs added since February
According to Friday’s Labor Department report, the nation added 163,000 jobs last month. That is more than double the amount added in each of the previous two months.
Job gains were seen in many sectors. Manufacturing, which has been struggling of late, added 25,000 jobs. Hospitality added 29,000 new jobs, and retailers brought in 7,000 more employees. There were 38,000 new hires in the education and health services industry. Public payrolls dropped, but only by a meager 9,000 positions.
Unemployment rate and election
But it wasn’t enough to lower the unemployment rate. That requires consistent gains over many months. In fact, the unemployment rate ticked up from 8.2 percent to 8.3 percent.
President Obama still commands a slight lead in polls across the nation. However, many believe the election in November depends almost entirely on the state of the economy at the time voters cast their ballots. At this point, it seems unlikely that the unemployment rate will be below 8 percent by then.
However, the idea that the election rests solely on the economy may be campaign rhetoric from the opposition. As Los Angeles Times writer David Lauter pointed out, the dismal jobs report from June did little to change the polls, which still show Obama with the same slight lead he had in May.
The numbers show the economy slowing at the mid-year point, as it has consistently done for the previous three years. However, that slow-down is more pronounced than it was in 2011. The economy grew by only 1.5 percent in the second quarter of 2012. That is a drop from the 4.1 percent recorded last year at this time.
Looming fiscal cliff
The debt crisis in the Eurozone is taking its toll on the world’s economy, and the U.S. is no exception. Additionally, the looming fiscal cliff is driving caution in investments and hiring.
The fiscal cliff refers to tax increases and spending cuts that are scheduled to kick in at the end of the year unless Congress acts to change it. Some say the “cliff,” if unattended, could push the nation into a second recession.
The housing market is showing real signs of recovery, but unless hiring picks up, and stays consistently up, the economy is likely to continue treading water for some time to come.