Thursday, May 03, 2012

Another Obama Spring Stagnation

Four more years of this crap?
It seemed as though the economy would provide the White House with momentum heading into a tough election fight -- not just for the White House but also for the Senate where Democrats have to defend 23 of the 33 seats up for election this year.  Evidence of success from Barack Obama’s economic policies might keep both in Democratic hands, especially as voters start taking the election seriously this summer.
A month ago, the March numbers dashed those hopes.  Job creation slowed significantly to 120,000, and a few weeks later, the GDP report for the first quarter provided some explanation.  Growth slowed from a pedestrian 3.0 percent in the fourth quarter of 2011 to a stagnation-level 2.2 percent.  Still, the White House suggested that this was merely a hiccup in an overall improvement for job creation and economic growth.  One month does not a trend make, after all.

Yesterday, though, the monthly report from ADP, the nation’s largest private-sector payroll management firm, indicated that April might actually be worse than March.  ADP produces a projection based on a sample of a half-million of its anonymous customers, comprising 21 million payroll jobs.  

That’s not unlike the Bureau of Labor Statistics, which derives its job-related data from two surveys, one of households and the other of businesses.  Gallup has a semi-monthly report that uses a sample roughly half that of the BLS’ 60,000 households, but samples continuously throughout the month rather than at one fixed time.  Between the three, analysts can get a pretty good idea of how well the economy is creating jobs.

In its April report, ADP estimated that the private sector added only 119,000 jobs, just a little over half of their estimate in March (201,000).  For the first time since September, ADP estimated a net job loss in manufacturing, down 5,000 jobs.  Construction also lost 5,000 jobs, the first losses in seven months, at a time of year when one would expect construction firms to need more employees.  Large companies practically stopped hiring altogether, adding only 4,000 jobs -- the slowest performance in six months.

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