Job Gains Providing a Ray of False Hope?

The key thing to realize about today’s good jobs report is that it was only good relative to expectations. Private sector job creation of 67,000 is not that impressive in any real sense.

And indeed, the latest update of the scariest jobs chart ever from Calculated Risk — which shows how deep these jobs losses are compared to past recessions — shows this comeback still isn’t anything like past comebacks, and it will be ages before we get back to even.

Private sector job creation is the key to any sustainable recovery, but as the chart above shows, you need to create a lot of jobs to repair the devastation since 2007. In that sense, today’s figures are not that impressive, but one can only hope they’re indicating better days ahead.

Phil Izzo of the WSJ provided reaction to today’s figures from a number of economists:

—It is a sigh of relief. The labor market in August was lethargic, but better than feared reducing the fears of a double-dip recession. Private payrolls went up 67,000 even though the overall nonfarm payroll fell 54,000 due to the census layoff. –Sung Won Sohn, Smith School of Business and Economics

–The August employment report confirms the “Big Stall” rather than outright contraction in the economy… Saying the economy isn’t about to contract is not, unfortunately, the same thing as saying that growth momentum has returned. If anything, a read into the details of the report indicates the extent of the economy’s stall. The growth in private payrolls was confined to Healthcare & Social Assistance (which seems to go up every month regardless), temp workers plus construction — of which 10,000 of the 19,000 were returning strikers. Everything else summed to zero and all of these sectors reported numbers that were marginally on one side or the other of zero. –Steven Blitz, Majestic Research

–The soft patch for jobs may have been extended for a fourth month today, but momentum in the economy is building and we can rule out a double-dip. –Christopher Rupkey, Bank of Tokyo-Mitsubishi

–Government employment losses in August more than offset the gains in private-sector employment. Most of the drop in public-sector payrolls is explained by the departure of 114,000 temporary Census workers. However, state and local government payrolls also continued to shrink in August. Since the start of this year state and local public-sector payrolls have fallen 135,000, or almost 17,000 per month. These job losses are almost certainly linked to the expected end of federal fiscal relief under the Administration’s stimulus program. –Gary Burtless, Brookings Institution

–Nonfarm [private] payrolls expanded by 67,000 in August… 67,000 jobs is just not enough and it cannot be spun otherwise. At the same time, the economy does continue to add a modest amount of jobs — since December 2009, private employment has increased by 763,000 jobs. This is not enough, especially so given the 8+ million jobs shed during the recession, but it is something. Given the increase in corporate profits among U.S. corporations, ongoing gains in payrolls should not be surprising