In a discussion about the economy and the stimulus package President Obama signed into law earlier in the year, Vice President Joe Biden last Sunday said, “Jobs are being created that would not have been there before. Can I claim credit that all that’s due to the recovery package? No. But it clearly has had an impact.”
The Department of Labor today released its monthly jobs report. Does it validate the Vice President’s remarks? No. The jobs report provides no evidence that the stimulus is working. If anything, it suggests the economy’s natural recuperative powers are just beginning to work, no thanks to fiscal policy. Of course, as argued elsewhere, the stimulus was fatally flawed from the outset with no chance of helping the recovery, so continued job losses through the fall should not be surprising.
The only good news in the jobs report is that the bad news is less bad: Payroll employment was only down 247,000 jobs as compared to down 443,000 the previous month. However, employment declines were widespread, touching every area of the private sector but health care and entertainment. The labor market is now so badly weakened that 1 million workers have temporarily dropped out of the labor pool in the last two months alone.
This downer of a jobs figure also means the Obama jobs deficit is growing, making it even less likely the President will be able to make good on his promise to create 3.5 million new jobs by the end of 2010. This was a promise the President made repeatedly during and after the campaign.
The President appears to be about 4.6 million jobs behind schedule when measured against a simple trend line. The total Obama jobs deficit as of the July jobs report now stands at 7.1 million jobs, a steep climb even if the President were to suddenly change course radically to adopt effective, pro-growth tax policies rather than just adding to the national debt while threatening producing taxpayers repeatedly with higher tax rates.