Unemployment Rate Up, Recovery Hopes Down
MICHEL MARTIN, host: I'm Michel Martin, and this is TELL ME MORE from NPR News.
The guys are heading into the Barbershop. They've got a lot on their minds, including that dustup between popular radio personality Tom Joyner and his old friends, talk show host Tavis Smiley and scholar Cornel West. We'll talk about why Joyner thinks that Smiley and West are actually to blame for some of the rude remarks directed at the president.
But first, we are going to talk about some bad news about the economy. Today's report from the Labor Department showed only 18,000 new jobs were added in June. That edged the unemployment rate up to 9.2 percent. And this month marks two years from what we were told was the end of the recession. President Obama talked about this in brief remarks today.
President BARACK OBAMA: There are bills and trade agreements before Congress right now that could get all these ideas moving. All of them have bipartisan support. All of them could pass immediately, and I urge Congress not to wait. The American people need us to do everything we can to help strengthen this economy and make sure that we are producing more jobs.
MARTIN: Here to give us the big picture on these low jobs numbers, Marilyn Geewax, NPR's senior business editor. She's with us once again in our studios in Washington. Marilyn, thanks so much for joining us once again.
MARILYN GEEWAX: Hi, nice to be here.
MARTIN: Now, you know, on the face of it, the unemployment rate edging up a tenth of a percent - from 9.1 percent to 9.2 percent - bad doesn't sound that bad. But you're saying it's actually more significant than the numbers would appear. Tell us why.
GEEWAX: When you duke around in these numbers, everything is bad. Wages were down; temporary workers got hurt; job creation was really sluggish, it was just so far below what you'd want to see this far into the recovery. Remember, Michel, that we are now exactly two years into what is supposed to be this recovery. Starting in June of 2009, the economy began growing. So if the economy is growing, we should be adding jobs. We should be pretty far along now.
Well, in June of 2009, the unemployment rate was 9.5 percent. And now, we're at 9.2 percent. Wow, you know, two years of expansion, and all you've gotten is to drop the unemployment rate from 9.5 to 9.2? That's awful.
MARTIN: And you were also saying that it's also - the psychological effect of this, also, is that people were expecting a lot more - in part because of certain events that you would've thought would've led to job creation.
GEEWAX: You know, there was a sense out there that jobs were going to be picking up again in June because we had had some sort of big shocks that happened in the spring. Remember, obviously, gas prices shot up. We went really quickly up in gas prices, to almost $4 a gallon in early May. So that set people back. But we also had other setbacks in the spring. Fukushima - the terrible events in Japan, where we had a tsunami, an earthquake, and all those supply disruptions. That was bound to ripple out into some of our manufacturing in this country. So that was a bad event in March.
But April was a terrible weather month. You know, we had a lot of those tornados, flooding; it was still tough in early May. So here we get to June, and it's pretty balmy. Gas prices have eased back. We're down to about $3.60 a gallon. Now, that's not cheap, admittedly; that's a lot more than last summer. But still, it's down from the peaks and psychologically, that should've helped.
The Fukushima thing is starting to work itself out. And all of that bad weather, the tornados, you would think that by now, there would be a bump up, a stimulus effect from that because you have to rebuild those homes. You have to clean up from all of that debris. So where is it? You know, there's kind of almost a mystery to this economy, that you keep thinking that the jobs reports should be getting better. And I think we can turn to any one of the 14.1 million Americans who don't have jobs right now, and they can assure you that it's just not happening. We're not getting the job growth.
MARTIN: Now, we mentioned earlier that the president is going to meet again this Sunday with the congressional leadership to talk about, you know, how they can come to agreement on the federal budget. As we mentioned earlier, the congressional Republicans have said that they won't vote to raise the debt ceiling unless there's a broader agreement over the federal budget and reducing the deficit.
Do you think that the lack of a deal on this bigger issue is somehow affecting job creation?
GEEWAX: Yes. You almost have to think that there's something out there that is eroding confidence because it shouldn't be this bad. We should be adding jobs. You look at a lot of statistics and you would think, well, geez, we should be moving forward. But we're not. And what is that problem? And I think that one could make a pretty reasonable argument that businesses are not hiring because there's a lack of confidence out there. They don't know quite what's going to happen.
I mean, what if we really did have a government default? I mean, that would be - many economists believe it would be catastrophic; the impact on interest rates would be huge. So people are pretty worried about that.
MARTIN: And we're also getting mixed signals about whether the two sides are, in fact, closer to an agreement or not. I'll just play a short clip from a news conference at the Capitol today that included House Speaker John Boehner. Here he is.
Representative JOHN BOEHNER: There is no agreement in private or in public. And as the president said yesterday, we are this far apart. It's not like there's some imminent - a deal about to happen. There are serious disagreements about how to deal with this very serious problem.
MARTIN: As I mentioned, we're speaking with NPR's senior business editor Marilyn Geewax, and we're talking about the unemployment numbers that came out today. Not good numbers. So how do you think this would factor into it? I mean, obviously, I think the Republicans would say - not that I speak for them - but I think that they would say that if there is an agreement to bring down the deficit, that would be a stimulus to the economy because it would give business confidence.
GEEWAX: Right. You know, I think that the thing about businesses is generally speaking, they can cope with almost anything, as long as they know what anything is. They just need some sense of confidence about where are we going with this? Let's get it done so that they can make their plans. For example, some of the things that President Obama has talked about that would be part of a deal here, corporate jet tax breaks. And he wants to change the way corporate jets are depreciated, and that would potentially harm that industry.
Well, if you're in Kansas and you have a plant where you're making corporate jets, you could probably cope with the news one way or the other, but not knowing if those interest - if those deductions were going to change the depreciation scheduled, it puts you in a very awkward position. You don't know what's going to happen.
MARTIN: And finally, Marilyn, the president referred to some ideas that he says are ready to go. What are some of those ideas?
GEEWAX: Well, he wants some things like these trade agreements they've been kicking around for a while. He'd like to get that done. Again, back to this uncertainty thing. One way or the other - do the trade deals, or don't do them. There's payroll tax cuts. He wants them extended. Are we going to do that or aren't we? So there are many questions out here where Congress just - if they would give people certainty, I think employers could move ahead.
MARTIN: Marilyn Geewax is our senior business editor, and one of our frequent contributors on jobs and the economy. Marilyn, thanks so much for joining us.
GEEWAX: Always nice to be here.
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