The employment numbers for June were released today, and unsurprisingly, they aren’t pretty. The unemployment rate rose to 9.2%, the highest it has been since last December, with only 18,000 new net jobs added last month. According to the Bureau of Labor Statistics, this figure shows that nearly 14.1 million active job-seeking Americans can’t find work, despite nearly 275,000 Americans choosing to leave the labor force to either go back to school or have just stopped looking.
The main reason behind the weak job numbers comes from the loss of nearly 39,000 government jobs at all levels, as federal, state, and local legislators are (finally) finding ways to shrink their budgets amidst record deficits. Private sector jobs actually grew by 57,000, which might be the only bright spot from an otherwise dismal month of June.
A potentially relieving piece of news in response to the jobs numbers could be the Federal Reserve’s reluctance to use the numbers to pursue another bond-buying program, especially since it just concluded its last one only a week ago, valued at nearly $600 billion. Called “quantitative easing,” it was intended to put more money into the system to stimulate the economy, but resulted in a devalued dollar and little change in economic growth.
There may be some hope on the horizon, though, in terms of retail sales. Last month, retail sales jumped 6.5%, which according to the New York Times, could foreshadow job growth in the retail market in the months ahead. However, this prediction has been made before, and has usually been undercut by poor job numbers in other industries, particularly construction.
Washington will try to use these job numbers as a justification for more government spending, even though the last time they tried that, it had no effect. The best course of action is to let the free market be free, and make it easier for businesses to hire through deregulation and encouraging private investment. Who knows, if we give that a try, we might actually see some improvement, rather than more government stimulus which just goes to special interests cozy with the administration rather than people who actually need the money.