Today’s Bureau of Labor Statistics jobs report revealed yet another month of disastrous economic data for the U.S. economy. Heritage’s Rea Hederman, Jr. and James Sherk write in a new report:
[T]he June unemployment rate stands at 9.2 percent and that the economy created only 18,000 jobs last month. This is the second straight month in which job creation has been essentially flat. Job creation as reported by the payroll survey in the second quarter of 2011 was 101,000 as compared to 165,000 in the first quarter. Labor market recovery once again has not happened this summer.
And as the above chart shows, if the economy maintains its current rate of growth (an average of 100,200 jobs per month), the United States would effectively never reach the natural rate of unemployment — 5.2 percent. Hederman and Sherk write that “under any imaginable circumstances,” the recovery is going to take a very long time:
Economists estimate that the natural rate of unemployment is 5.2 percent. If the economy began growing immediately at the same rate the payroll survey reported during the tech bubble (+265,000 jobs per month), unemployment would not return to this level until mid-2014. More realistically, if employers began hiring at the same average rate they did during the 2003–2007 expansion (+176,000 jobs per month), unemployment would not return to its natural rate until 2018.
Contrast the economy’s failure to grow with President Obama’s predictions in January 2009. At the time, the White House produced a chart that forecast a tremendous drop in unemployment under the Obama stimulus (the White House’s estimates are in portrayed in blue, below.) The actual unemployment numbers (pictured in red) are far different.
Read Hederman and Sherk’s full report at Heritage.org, where they explain where the U.S. economy stands today, where it’s headed, and what Washington can do to change its direction.