August 6, 2004


U.S. Employment Growth Surprisingly Weak in July (Reuters, 8/06/04)

U.S. employers added a paltry 32,000 workers to payrolls last month, the government said on Friday in a report far weaker than expected that will come as unwelcome news for President George W. Bush ahead of the presidential election.

The Labor Department also cut its tally of job growth for May and June by a combined 61,000.

The unemployment rate, however, fell to 5.5 percent from 5.6 percent in June as a separate government survey of households showed robust employment growth.

Posted by Orrin Judd at August 6, 2004 8:59 AM

The 32K number had people falling out of chairs as the expected was in the 250K range. Given the improvement in July economic statistics (manufacturing, confidence, etc) and the drop in the unemployment rate it is hard to figure out what is going on.
Bad news for Bush though as the media and Dems will be all over this and it will hurt Bush's standing on the economy (especially if the stock market keeps tanking)

Posted by: AWW at August 6, 2004 9:03 AM

GWB, Greenspan: "D'oh!!"

Perhaps the household surveys are picking up the booming market in home sales of vitamins, weight loss products and holistic herbal cures.

Posted by: Robert Duquette at August 6, 2004 10:03 AM

OJ is right that this could be a blessing in disguise -- if Greenspan is paying attention.

Posted by: Matt Murphy at August 6, 2004 10:46 AM


Hurray!! Your pessimism has been vindicated. Enjoy.

Posted by: djs at August 6, 2004 11:31 AM

Don't shoot the messenger DJ. I have no desire to see the economy suffer. The economy has big structural problems that need to be addressed, and the sooner we give up this goofy, delusional optimism that has infected us all, the sooner we can address them, and the less suffering we will all have to deal with in the long run.

Posted by: Robert Duquette at August 6, 2004 1:07 PM


That's exactly right--the industrial measure doesn't pick up any of the self-employed, which if you look around your own neighborhood is probably at least 5 people.

Posted by: oj at August 6, 2004 1:16 PM

Like my neighbor. Was let go by Northwest Airlines 2 years ago, started his own business out of necessity. Not making nearly as much as he used to, though.

Posted by: Robert Duquette at August 6, 2004 1:26 PM

Employed. Not measured.

Posted by: oj at August 6, 2004 2:06 PM

5.5% unemployment is FULL EMPLOYMENT in the absence of a boom -- it's the "natural rate" the economy drifts to.

See which discusses Ray Fair's investigation of the fact (from 2003).

So we have full employment. This is a good sign: but what that also means is that the Fed should stop stimulating the economy at this point. Attempts to move the economy below NAIRU leads to inflation.

Posted by: Arnold Williams at August 6, 2004 2:10 PM

I understand the difference between the two surveys. But everyone is focused on the Labor survey (ironic since in the past it was the unemployment rate that everyone focused on).
A good employment report today would have been a big nail in the coffin for Kerry's campaign. Instead he probably gets some boost from this. Things like this lead me to keep thinking that the election will be a lot closer (or even a Kerry win) that currently believed.

Posted by: AWW at August 6, 2004 2:17 PM