US Outlook: Double-dip watch latest: the US employment figures for June disappointed for the second month in a row. It was a reading that exposes the folly of Congress in not extending benefits for the long-term unemployed, and adds urgency to other mini-stimulus plans, which appear harder and harder to push through on Capitol Hill.
Strip out the temporary effects of the US census – which added hundreds of thousands of census workers to the total last month, and took half away this time – and bear in mind the inexorable decline in employment in state government, where austerity is already a fact of life. Economists are focusing on private-sector jobs growth as the key measure of the US economy's health, and the 83,000 created last month again fell shy of expectations, although it was an improvement on May's 33,000.
Last time out, I highlighted two silver linings. Average earnings and the length of the working week both rose in May, suggesting that demand for labour remained robust, even if employers, nervous about the European debt crisis, preferred to sweat their existing employees harder instead of hiring more. This time, both numbers went into reverse.
So the silver lining is thinner this month, but then the cloud is not so black, either. In this finely poised environment, relatively modest government action will have an amplified effect. Modest is the word for the options on the table in Congress now, a grab-bag of measures aimed at maximising aid to impoverished state governments. They need to be kept alive.Reuse content