Quick Takes | Economic Policy Institute

GDP report is a sign of economy stuck in neutral

Josh Bivens — Fri, 27 Jul 2012 13:00:30 +0000

The Bureau of Economic Analysis reported today that the economy grew at a 1.5 percent annualized rate in the second quarter of 2012 – meaning that it has grown at an annualized pace well under 2 percent for the first six months of the year. This is the sign of an economy stuck in neutral, as well as a sign that policymakers must act to provide more support to the economy if they want it to grow fast enough to start putting sustained downward pressure on today’s still too-high unemployment rate.

Sluggish GDP is root cause of stubbornly high unemployment

Josh Bivens — Thu, 27 Oct 2011 12:57:06 +0000

The Bureau of Economic Analysis reported today that the economy grew by 2.5 percent in the most recent quarter, meaning that it has grown by only 1.6 percent over the last full year. This sluggish growth is the root cause of the stubbornly high unemployment rate we’ve seen over that time. While a double-dip recession does not seem to be in the cards, this does not by a longshot mean that the economy is healthy.

Miserably low job growth

Heidi Shierholz — Fri, 07 Oct 2011 13:24:23 +0000

The unemployment rate is for the moment holding steady at 9.1 percent, but at the current rate of job creation, the unemployment rate will soon begin to rise again. We are mired in high unemployment with miserably low job growth. This country has 14 million unemployed people, and the job growth rate has unmistakably slowed down since the spring.

This morning’s data release shows that 103,000 jobs were added in September. That number, however, includes around 45,000 Verizon workers coming off the picket lines, so the net new jobs the economy created in September was actually around 58,000. This level of growth is in line with the dismal average of the last four months, which was 64,000, and that was a slowdown from the not-doing-much-more-than-keeping-up-with-population-growth average of 123,000 of the prior 14 months.

Even worse than we thought: Anemic GDP growth explains increase in unemployment rate

Josh Bivens — Fri, 29 Jul 2011 11:51:25 +0000

“Today’s report on gross domestic product indicates that the U.S. economy has grown at a disastrously slow 0.9% rate for the entire first half of 2011. This anemic growth is why the unemployment rate stopped falling and actually began rising during these same six months. Worse, Washington’s rush to fiscal austerity will make the problems of slow growth and joblessness even worse.”

Labor market in full retreat

Heidi Shierholz — Fri, 08 Jul 2011 13:23:01 +0000

This morning’s release of the June 2011 Employment Situation report by the Bureau of Labor Statistics showed a labor market in retreat. Virtually every single measure was devastatingly weak: only 18,000 payroll jobs were added, average hours declined, nominal wages fell, unemployment was up in almost all age groups, more than 250,000 workers dropped out of the labor force altogether, and the public sector continued to bleed jobs. Furthermore, a downward revision to last month’s data means that this is the second month in a row with job growth at 25,000 or less. This is a remarkable, across-the-board backslide. The President and Congressional leaders need to stop talking about deficit reduction and start talking about job creation. — EPI economist Heidi Shierholz

Unemployment increases, recovery on pause

Heidi Shierholz — Fri, 03 Jun 2011 13:02:40 +0000

The current unemployment rate is 9.1%. To remind us what a healthy unemployment rate looks like, 4 years ago, in May 2007, the unemployment rate stood at 4.4%, and 11 years ago, in May 2000, the unemployment rate was 4.0%. The U.S. workforce needs the pace of job growth to accelerate dramatically in order to re-establish full employment within any reasonable timeframe, and instead, the recovery is on pause.

GDP continues to grow too slowly

Josh Bivens — Thu, 28 Apr 2011 12:17:42 +0000

“Today’s news that gross domestic product (GDP) grew at 1.8% in the first three months of 2011 is yet another reminder that the economic debate in Washington on deficit reduction is misguided. Growth this slow, if sustained for a year, would most definitely lead to a guaranteed rise in the unemployment rate – it’s time for politicians to put jobs back on the top of the issues menu,” said EPI economist Josh Bivens.

EPI statement on proposed House Republican 2012 budget

Tue, 05 Apr 2011 15:17:50 +0000

The Chairman of the House Committee on the Budget, Republican Paul Ryan, released a proposed budget for fiscal year 2012 that rehashes failed economic thinking and the standard wish-list of right-wing policies. This budget is not a serious attempt to govern, but a warming over of long-dead economic proposals.
The budget, among other things, includes a plan to privatize Medicare by forcing recipients to buy insurance on the open market, to gut Medicaid by shifting costs to states and reducing funding, to cut taxes on corporations and wealthy individuals, and to reduce the nation’s ability to make needed investments by capping overall levels of federal spending. The plan would not only put the fragile recovery at risk, but it would also undermine economic growth and job creation for years.
This budget is impressive in its ability to not only inflict maximum harm on the economy, but to concentrate that harm on those most in need. This will not only cost the economy hundreds of thousands (and perhaps millions) of jobs over the next five years, it will also destroy the social safety net and undermine policies that support the middle class. –John Irons

Martin Luther King on “right to work”

Mon, 04 Apr 2011 13:54:06 +0000

“In our glorious fight for civil rights, we must guard against being fooled by false slogans, such as ‘right to work.’ It is a law to rob us of our civil rights and job rights.
Its purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone…Wherever these laws have been passed, wages are lower, job opportunities are fewer and there are no civil rights. We do not intend to let them do this to us. We demand this fraud be stopped. Our weapon is our vote.” —Martin Luther King, speaking about right-to-work laws in 1961

Welcome momentum in the labor market, hoping for more

Heidi Shierholz — Fri, 01 Apr 2011 13:08:47 +0000

March showed the jobs recovery unmistakably gaining traction, with the addition of 216,000 jobs and the unemployment rate ticking down to 8.8% as more unemployed people found work.
The labor force participation rate held steady at its lowest point of the recession (and its lowest point in twenty-seven years) meaning that the millions of workers who dropped out of (or never entered) the labor force during the downturn continue to wait on the sidelines, not yet feeling optimistic enough about the prospect of finding a job to begin looking for work. But all in all, the March report shows extremely welcome momentum in the labor market.
The reality check in this report is the larger context; given the size of the gap in the labor market, even at March’s job growth rate, it would still take until around 2018 to get back to the pre-recession unemployment rate. In other words, as a snapshot, this report looks quite good, but given where we are, we need to see this and more in the coming months. –Heidi Shierholz