July’s Employment Report hit the wires and many investors breathed a sigh of relief that it was not as abhorrent as feared. There were many that expected an outright loss of jobs and an ugly tick up in the unemployment rate. The pre-market futures soared, but that gain didn’t last, however that is another story.
Employers added 117,000 jobs in July, which beat the estimate of 85,000. The unemployment rate edged lower to 9.1%. The good news is that private employers added a decent 154,000 jobs, while the government continued its contraction by cutting 37,000. I say it’s good news because the private sector is the engine of wealth generation in the economy. Investors had feared much worse numbers based on a series of negative recent economic reports.
Still Not Good Enough
Better than feared does not mean it was good. The amount of job creation does not even absorb the new monthly additions to the labor force. Each month, about 150,000 new entrants enter the labor force. Unfortunately, this kind of report is the best we can hope for realistically in this economy.
The downtick in the unemployment rate was a case of the participation rate dropping as opposed to a flood of new jobs. This means that more people were “discouraged” and stopped looking, and thus were not counted.
Obama’s Fault?
I have heard more and more business leaders appearing on CNBC saying that Obama is destroying job creation and the economy. I don’t personally believe that since he inherited a putrid economy to begin with and also is not getting any cooperation from the other side. Whatever the case may be, he is certainly getting blamed by more people these days.
So there you have it: another month and another mediocre report. Unfortunately I do not see the situation drastically improving anytime soon. If a recession is coming it will get much worse. For now let’s be happy it was better than feared.
Employment Report Good But Not Great is an article from: 
