US Jobs: How many ways to say ugly?

GlobalPost

There are bad economic reports. Then there are stunningly bad economic reports.

Unfortunately we got the latter today.

The U.S. economy — the world's largest — added only 18,000 jobs in June, the U.S. Labor Department reported. That's the smallest number in nine months. Most economists were expecting a gain of 105,000.

The U.S. unemployment rate, meanwhile, ticked up to 9.2 percent from 9.1 percent the previous month. That's the highest level this year.

And to make matters worse, the government revised its figures over the past two months, and lowered its total job gains by another 44,000.

According to the Labor Department, 14.1 million Americans are now out of work, including 6.3 million who have been jobless for six months or longer. In May, those numbers were 13.9 million, with 6.2 million in the long-term unemployed category.

"This confirms our view that the Fed will continue to keep rates on hold into 2012 and if weak employment continues it will be pushed out even further," Tom Porcelli, chief economist, RBC Capital Markets in New York told Reuters.

Taken together, this is a very big miss. It's also dismal news for the overall U.S. economy. That's because employment is the biggest factor in any economy, particularly in those like the U.S. that are driven so strongly by consumer spending.

Here's why:

If people don't have jobs — or worry they'll lose the one they have — their confidence wanes, and they tend to not spend. That, in turn, leads to slower economic growth, which further weakens the job market. And on and on the dark spiral goes. 

Today's news is something of a disappointment, too, because recent signs in the U.S. economy have been improving a bit. Retail sales have been stronger, manufacturing has been on a slight uptick, and claims for initial jobless benefits dropped last week.

But, clearly, the U.S. economy has a long way to go in restoring the 8 million jobs that it lost during the Great Recession. Job growth in America is essentially flat. And that's not going to cut it.

It's the economy, stupid.

You'll be hearing a lot of that for the rest of the year, and into 2012, too.

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