The unemployment figures for May are out, and they portend a disaster in the economy. Job growth for the month was 54,000 which is comprised of an additional 83,000 jobs in private industry and a loss of 29,000 jobs in government. Unemployment rose to 9.1%. The figures for March and April were revised downward to show 39,000 fewer jobs, so the increase of 54,000 in May was almost completely just making up for the downward revision of the previous two months.
These are terrible numbers, and they are even worse than they look. In order to understand the true nature of the numbers, one has to know that they are not just raw figures that come from the survey. The government "adjusts" the results according to its statistical model which is supposed to take into account jobs created or lost at new businesses which are not counted. The adjustment in May is the highest increase of the year. According to John Crudele writing in the NY Post, the May adjustment is just over 200,000 additional jobs. That means that the real number of jobs shown by the survey was a loss of over 150,000 jobs in May. those are figures reached in an average recession.
These numbers are partially the result of transitory events. The earthquake in Japan may have resulted in a few businesses in the USA experiencing parts shortages and some temporary layoffs, but the number in no way accounts for a big part of these results. The government itself reported that the tornadoes and other bad weather in May had no noticeable impact on the figures.
The real culprit in this mess is the price of energy. As the price of oil has risen in the last few months, consumer spending has been redirected towards paying for energy. This has robbed a weak economy of much needed cash and has resulted in an overall slowing. We can thank Barack Obama and his misguided energy policies for this mess. Many times people criticize a president for failing to get us out of a mess. This time, it seems that the president put us here. Obama has got to go!!!!
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