The Labor Department is reporting that the economy added 200,000 jobs in June, beating the expectations of analysts by about 35,000 jobs. The effective rate of unemployment remained the same at 7.6 percent, indicating that the better-than-expected performance is still inadequate for improving the jobless economic recovery.
Although Wall Street was anticipating the labor report in the hopes that it would signal a healthier economy, the figures and forecasting remain mismatched. The American economy has struggled to improve employment for the millions of individuals who remain out of work. In addition, most workers finding new jobs are discovering that they are worth less now than they were before the Great Recession.
In the New York Times today one worker reported that the inflated expectations of economists did not match her own diminished expectations regarding employment and wages. Sharon MacGregor, 42, of Paterson NJ, like so millions of other Americans who are out of work, is willing to work for much less than she used to earn. With a BA in psychology and 20 years of experience as a graphic designer, she has discovered in this labor market that experience and wages no longer match up.
“Seven years ago, I was making $63,000 a year,” MacGregor said. “If I asked for that now, forget it. I don’t want to work for so much less but I would, just to get back on the market and not to have a gap in my résumé,” she said.
The news from the labor department also prompted investors worrying about the Fed’s recent news that it would begin scaling back the stimulus money it has been pumping into the economy. Fed Chair Ben Bernanke last week said it would quit buying bonds when the unemployment rate hit 7 percent. However, an analysis of unemployment figures over the last year show that the unemployment rate has only dropped .06 of a percent since June 2012. At that rate, it will take another year for the struggling economy to reach a point where the Fed bond-buying program will end.
This is bad news for workers and investors alike. Workers are finding less employment opportunities and less well-paying jobs than before the financial collapse. Investors are finding less opportunities for profits that include job creation, which means most the profit now being generated by companies is dependent on doing more-with-less and shifting the financial burden onto workers desperate for jobs even if they pay less than their experience and skill set demanded several years ago.
Despite the glad-handing talk of economists and politicians alike that the American economy is vital and remains sound, the fact is that overall growth in economic output has been terrible. In the first quarter of this year, for example, the economy grew at an annual rate of 1.8 percent, well short of what is needed to create jobs, bring down the unemployment level significantly, and ensure what jobs are being added are good paying ones that will stimulate growth by encouraging consumers to spend.