Once again, economists held their collective breath in anticipation of the Labor Department's monthly jobs report Friday morning, only to be disappointed, for the third straight month, by the continued lackluster performance of the job market.
The 88,000 jobs added in June fell short of the 95,000 expected, not to mention the 200,000 to 300,000 needed to drive a robust economic recovery. The official unemployment rate remains the same (8.2 percent), leaving families, businesses and local governments in a protracted economic limbo.
When the recovery first stalled, economists explained it by pointing to the Arab Spring and the Japanese tsunami. Now we feel the effects of economic difficulties in Europe and a slowdown in China, factors that combine with domestic difficulties — including the so-called "fiscal cliff" resulting from Congressional gridlock and the end of a temporary extension of long-term unemployment benefits later this year — to create a climate of continued uncertainty.
With past job reports, we've parsed the numbers to look at youth unemployment, at short-term vs. long-term unemployment and other numerical slices in search of the silver lining or clues to concrete areas for improvement, which do exist.
But no matter how you parse it, the bottom line is that the economic outlook for most Americans isn't improving, at least not significantly, anytime soon. A good chunk of June job growth was due to a rise in temporary employment, and some now worry the economy is settling into a slower trend with more tepid job growth to look forward to.
Personal financial responsibility is important in any economy, but its necessity in a weak economy cannot be overstated. Indeed, as Wells Fargo economists John Silvia and Sarah Watt noted on Friday, households (and businesses and governments) are continuing to restructure in order to adapt to a slower pace of growth.
"The motivating factor in economics, as in baseball, is what you get relative to what you expect," they write. "In baseball, if the pitcher throws a slider when you expected a fastball, then you have a problem. In economics, the gain in jobs, income and overall top-line revenue has not measured up to the expectations of many households and businesses." Just as a batter adjusts to a pitcher, Americans are rightly adjusting to what the economy is throwing them, and becoming more cautious due to uncertainty about what to expect.
For private citizens, elevating the values of thrift and frugality are an important part of this adjustment. Cutting back on spending, downsizing where possible, eliminating bad debt and putting just a little more into savings each month are smart practices that can be revisited in preparation for difficult times ahead.
For national elected officials, the time is ripe to end political inaction. As long as Congress remains deadlocked and polarized over budgetary difficulties, the recession is likely to linger in some form. Until politicians are able to put aside their personal political calculations and agree on a budget — or, even better, take risks to get creative with fiscal solutions — it seems unlikely that true economic growth will be reclaimed.
Individuals and governments can't control everything happening in the world, but there are some things over which they do have power. We continue to hope for a good faith effort from all parties to do what they can, where they can as the nation struggles to regain its economic footing.
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