With the Dow's sharp decline on Thursday, Europe's debt crisis, renewed fears of a double-dip recession, and mounting anxiety about the debt deal's spending cuts, investors worried that Friday's jobs report would only add to the pile of bad news. But it actually offered some "much better-than-expected" data, with the U.S. Labor Department reporting that the economy added 117,000 jobs in July — beating a forecast of 75,000 new jobs. The unemployment rate actually fell from 9.2 percent in June to 9.1 percent in July. Here, five other takeaways, not all cheery, from the new jobs report:
1. This was better than we expected — but not enough
Sure, "the net new jobs created in July exceeded the dismal number reported in June," says Motoko Rich in The New York Times, "but the total was barely sufficient to accommodate normal population growth." Just to keep up with our growing population, we have to add roughly 120,000 jobs each month.
2. And these numbers hardly reflect a recovery
While the new jobs do offer some relief, there are a number of signs that "the recovery has slowed to a crawl," Rich says. Consumer spending is on the decline, housing prices are still in the gutter, and a number of key manufacturers are showing weak growth. Plus, "in a strong recovery, the economy would be adding jobs about twice as fast as it is now," says Jacob Goldstein at NPR. "You'd see more than 200,000 new jobs created every month, month after month."
3. The dip in the unemployment rate is an illusion
There are some "ugly truths" beneath the surface of this jobs report says Jeff Cox at CNBC.com. "The drop in the unemployment rate" — from 9.2 percent to 9.1 percent — "is fairly illusory." There were actually fewer people working in July than in June — 139.296 million versus 139.334 million. Meanwhile, the number of "discouraged workers" — those who are unemployed and not actively looking for work — saw a significant increase, from 982,000 to 1.119 million. Here's a "sobering note," adds Rich. "Only 58.1 percent of the population is working, lower than at any point in 28 years."
4. And people are remaining unemployed for longer
For the third straight month, the average duration of unemployment increased, to 40.4 weeks, notes Cox. That's "double where it was when President Obama took office in January 2009."
5. The numbers boosted investor confidence — but only briefly
After Thursday's disastrous plunge — the Dow fell 513 points, the worst loss since October 2008 — the market greeted the not-as-bad-as-expected jobs report with a brief surge Friday morning. But it was short-lived. "The gains completely evaporated in the first 30 minutes of trading," says Steve Schaefer at Forbes. Yeah, "the optimism wore off quickly," says CNNMoney. After an increase of as much as 171 points, the Dow dropped back into negative territory as investor confidence quickly evaporated.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- What would a U.S.-Russia war look like?
- Scottish independence is another financial crisis waiting to happen
- Fall movie guide: All the films you should see in September
- 7 things the world's happiest people do every day
- The elusive 'It factor' in presidential politics
- 10 things you need to know today: September 1, 2014
- Why the West should let Russia have eastern Ukraine
- The next pandemic
- 7 grammar rules you really should pay attention to
- The 10 best networking tips for people who hate networking
Subscribe to the Week