Friday’s disastrous Department of Labor employment report was a huge blow to the optimism and predictions of sustained economic recovery that marked the winter and early spring.
But the deadliest news may not have been the top-line figures indicating that the economy created a measly number of jobs in May, and that the unemployment rate ticked back up — but that the initial jobs figures in previous months’ reports were revised downward significantly. Interpreted one way, the revisions point to the possibility that the country’s economic engine has slowed more abruptly than recent signs suggest.
The broad politics of a slowing economy are disastrous for President Obama. But if there’s a silver lining for him, it’s that for probably the last couple months, he’s managed to dodge some unflattering headlines — or headlines that would have been worse if the recent jobs reports hadn’t overestimated the number of jobs the country really created.
Here’s how the revisions look in chart form:
Just because job growth appears to have fallen off a cliff, though, doesn’t mean it can’t rebound.
“We don’t view the deceleration in employment over the past couple of months as the leading edge of a more pronounced and general weakness as it follows several months of stronger growth; some of the deceleration likely reflects payback from weather effects that boosted employment last winter,” wrote analysts at Macroeconomic Advisers. In other words, the warm winter artificially inflated employment at the end of 2011 and beginning of 2012, and we’re now on the other side of it. They also note that slowing economic growth around the world, and the euro zone crisis threaten growth in the U.S., but that falling energy prices will leave consumers with more disposable income, which could boost economic growth.
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.