Unemployment and the Sequester
A depressing jobs report--and the sequester hasn't even kicked in yet.
So the jobs number for March was terrible, just 88,000 jobs. The household survey, which is the other survey the BLS does but gets far, far less attention, was weaker still. The economist Justin Wolfers estimates based on combining the two that the real number is more like 30,000. (By the way, if you don't follow Wolfers on Twitter, you ought to, if nothing else for the first Friday of every month when he bangs out a series of illuminating tweets that really tell the story. And needless to say if you're not following me yet @mtomasky well shame on you.)
And yet, the last two months were revised upward, repeating a recent trend. And, Wolfers notes, job growth averaged over the past 12 months comes to 169,000 a month. As he just tweeted: "It is weaker than we might hope, but it is enough to (slowly) reduce unemployment."
The sequester is not in these March numbers, the pros say. Too early. So that doesn't necessarily augur well for April. Or May. There are going to be more job losses, particularly in the public sector. Good, you say? Question: How many public-sector jobs have been shed in the last three years? Answer is 648,000. That's 18,000 every month. I don't think this has ever happened since the birth of the welfare state, not under any Republican president or Democratic one.
It's just now starting to bite, the sequester. It can do serious economic damage heading into the summer. It's up to...oh, someone; who would that be?...to explain to the American people the relationship between sequestration and the economy, between sequestration and jobs. Otherwise, people are just going to let it happen. They don't make these connections themselves. And the economy is going to be lackluster and people are naturally going to blame that someone instead of the people who are actually responsible.