“We might be witnessing the mother of all jobless recoveries.”
That’s how economist Bernard Baumohl described today’s jobs report to the New York Times.
While there were “only” 345,000 jobs lost last month–as compared to504,000 in April–the report doesn’t account for the upcoming joblosses as well as the ripple effect that will result from the GMbankruptcy. Nor does it reflect the severe budget shortfalls statescontinue to face. It did, however, reveal a continued collapse of wage growth, the highest unemployment rate in 25 years, and the loss of 156,000 manufacturing jobs.
Economic Policy Institute economist Heidi Shierholz writestoday, “It is only in the midst of a historically steep recession thatlosing 345,000 jobs in a single month is actually taken as a goodsign…. The US labor market is still hemorrhaging jobs. With thecontinued loss of jobs and hours along with the collapse of wage growth,it is time to start thinking very seriously about additional stimulusspending.”
In fact, the Center for Economic and Policy Research (CEPR) ismaintaining an “honor roll” of economists who have called for another stimulus “in an effort topromote forward thinking…and challenge those who have not yet facedup to the severity of the current recession.”
“Many mainstream economists missed the housing bubble at the root of thecurrent crisis and many have been slow to call for an additionalrecovery package,” CEPR Visiting Scholar, Eileen Apellbaum, told me. “In the absence of a third economic stimulus, job loss is likely toexceed half a million jobs a month through the rest of this year andpossibly longer. Pain for workers will continue to mount, and the budgetproblems of states will worsen…. A third stimulus is the best chanceworking families have for weathering this economic crisis.”
Appelbaum’s absolutely right about the fiscal outlook for states. TheCenter on Budget and Policy Priorities reportsthat “new mid-year FY2009 shortfalls of $60 billion have opened up inthe budgets of at least forty-two states and the District of Columbia.” (Thatdoesn’t include the initial $48 billion in shortfalls that these andother states faced when they originally adopted their budgets for thecurrent fiscal year.) Also, forty-six states project deficits for the upcomingfiscal year–initial estimates project a $133 billion shortfall. Without additional help, we will see more layoffs, furloughs, and cutsin vital services that will only deepen economic hardship.