Well, it appears the minimal job growth in June was even worse than officially reported:
CNBC drilled down into the June jobs numbers from the Bureau of Labor Statistics. Here is the shocking truth about the figure of 80,000 jobs supposedly created.
The birth-death model, which approximates the amount of jobs gained through new businesses created too recently to be counted in the formal survey, added 124,000 positions, meaning that without the estimation the total count would have been a loss of 44,000.
Watch for the July jobs report period in a few weeks. That’s when we’re likely to see that June’s numbers get revised down, as has been the trend during the Obama era. June may get revised into negative job growth.
The “jobs gap” is the number of jobs the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.
The Hamilton Project has created a calculator (h/t to Matt O’Brien) that allows you to plug in various job creation rates to see how long it would take to fill the jobs gap under various scenarios.
What if the economy kept creating jobs at the 150,000-a-month pace that we saw last year and so far this year?
So under that scenario, the jobs gap would not close until after 2025, maybe more like 2030 — assuming the economy isn’t hit with another recession or two or three during that span.
At this point in the Reagan Recovery, we were hitting between 5 to 7% GDP quarterly growth and over 4 million jobs were created in just the 12 months before the November 1984 election. Maybe the lesson here is…. one economic plan worked, the other is a complete mess.