The consensus prediction for job growth in March was 200,000. In fact it was 88,000. Even more troubling, about a half-million people left the job market, driving the country’s job-participation rate to the lowest point since 1979.
On CNBC this morning, former Obama administration officials Jared Bernstein and Austan Goolsbee were glum, struggling to find a rationale. The sequester! Well, no. Public-sector jobs were down only 7,000. The payroll tax hike? Could be. While the president was haggling over the top marginal rate, no one in the administration seemed to care about the significant dip in take-home pay that would hit low- and middle-income consumers and, in turn, deal a blow to retail, restaurant and other consumer-based industries. Could it be that tax hikes are bad for the economy?
The president, rightfully so, will take another pummeling for failing to focus on jobs. And the push by the president and Senate Democrats for tax hikes will appear even more ludicrous (as liberal economic gurus bemoan the impact of the payroll tax hike).
There is no substitute for a strong private sector. Right now, employers aren’t hiring. You can attribute that to nervousness over Obamacare or to the payroll tax or to the aggregate burden of taxes and regulations, but the economy remains hobbled. And worst of all, we are approaching the point, as during the Great Depression, when sustained high unemployment will have ripples for years and years to come.
Reaction to the jobs numbers has been swift and brutal. Douglas Holtz-Eakin from the American Action Forum writes, “The March jobs report was awful: jobs weak, labor force down, hours flat, and earnings flat. The jobs report is important not because of any single month, but because it is the leading indicator of a break away from the new normal: bad growth and weak opportunity. No break to be found today. The Administration has slavishly adhered to the economic doctrines of Jimmy Carter. They should not be surprised they are getting his results.”
Meanwhile, House Speaker John Boehner (R-Ohio) put out a statement, which read in part: “The president’s policies continue to make it harder for Americans to find work. Hundreds of thousands fled the workforce last month and unemployment remains far above what the Obama administration promised when it enacted its ‘stimulus’ spending plan.” He urged the president to approve the Keystone XL pipeline, tax reform and a replacement bill for the sequester. Republicans plainly intend to put the spotlight back on the president who spent his time this week hawking gun control and attending a lavish fundraiser.