Today’s weekly jobs report is a bit of an anomaly because of a flawed sample, but there’s more behind the numbers than first meets the eye. Two states’ computer glitches are preventing The Labor Department from generating a complete report on last week’s jobless benefits claims, clocking-in at just 31,000. But there remains a troubling trend in earlier weeks’ reports, according to Bill Hampel, Chief Economist for the Credit Union National Association. “These numbers are usually very difficult to interpret on a weekly basis, or at least, must be taken with a grain of salt on a weekly basis, because they’re usually quite volatile,” he says. “What also counts is how many jobs are being added.”
The level of jobs being added to the economy in recent months has been anemic at best. “Over the last several months, we have gotten where the level of layoffs is about consistent with a normal, strong economy, at close to full-employment,” Hampel says. The problem is, we’re still behind the curve in replacing jobs lost during the recession. “What hasn’t happened, yet, is hiring hasn’t picked up. Hiring has improved, but not nearly as much as layoffs have,” he says.
Hampel would like to see at least 200,000 jobs added each month, consistently. That’s not likely to happen anytime soon. “There’s a great deal of uncertainty about what the effect of the Affordable Health Care Act, Obamacare, will be over the next couple of years,” he says.
And that’s not all.
“There is a lot of uncertainty among businesses,” Hampel says. “This last recession was so severe, that it put a lot of businesses on edge. It made businesses nervous to not want to over-stock inventories, to not want to over-hire workers, for fear things could turn down again,” he says.
Businesses are also skittish about what’s being done about the economy, and the looming threat of another Congressional spitting-match over the Federal Debt Ceiling. “There’s a possibility of a government shut down in the next month, or so,” Hampel says. “Probably the biggest one, over the next months, we have to raise the debt ceiling for the U.S. again,” he says.
Lest you think the Debt Ceiling is a nebulous, ‘just-a-number-on-paper’ kind of concept, Hampel says the consequences would be all too real. “We basically would default on our debt, interest rates would go through the roof, and we’d fall into another recession, kind of like the one we went through in 2007 and 2008,” he says.
LISTEN TO OUR REPORT WITH CHIEF ECONOMIST, BILL HAMPEL: