June Employment Report

Ugh...
The good news isn't so good - according to the BLS, the unemployment rate ticked down to 9.5% (from 9.7 in May), but that is an artifact of 652,000 people leaving the labor force. According to the household survey (from which the unemployment rate is calculated), the number of people employed fell by 301,000, and the labor force participation rate declined to 64.7%. That suggests that people may be so discouraged about their employment prospects that they are giving up (to be counted in the labor force, people must either be working or looking for work).

The bad news isn't so bad - the decline in payroll employment of 125,000 (calculated from the separate establishment survey) was driven by a 208,000 decrease in government jobs, mostly due to the end of temporary census jobs. Private-sector payrolls increased by 83,000. But that's still not very good - its way far short of the pace needed to keep up with population growth and productivity increases, not to mention getting the massive number of unemployed people back to work.

One would hope this would put an end to all the new austerity talk (discussed here by Paul Krugman) and create a sense of urgency about extending unemployment benefits and increasing aid to state and local governments. As David Leonhardt explained in his column last week, we are in danger of repeating the mistakes of 1937 - I doubt anybody understands this better than Ben Bernanke and Christina Romer.

And yet, the White House appears to be putting a positive spin on things. The Times' Jackie Calmes reports that while the administration's economists want more stimulus, the political advisors are fretting about public deficit anxiety. Meanwhile, down the street, congressional Democrats have created a procedural obstacle to doing anything more next year, as Ezra Klein explains.

More takes on the June report from David Leonhardt, Mark Thoma, Free Exchange and RTE's round-up from Wall Street "economists."