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Charlie Sykes: Sykes Writes

Defying History

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Even AP notes that the Obama recovery is one of the slowest in history. Maybe that's not a coincidence.

 

WASHINGTON (AP) -- The job market is defying history.

A dismal June employment report shows that employers are adding nowhere near as many jobs as they normally do this long after a recession has ended.

Unemployment has climbed for three straight months and is now at 9.2 percent. There's no precedent, in data going back to 1948, for such a high rate two years into what economists say is a recovery.

The economy added just 18,000 jobs in June. That's a fraction of the 90,000 jobs economists had expected and a sliver of the 300,000 jobs needed each month to shrink unemployment significantly.

The excruciatingly slow growth is confounding economists, spooking consumers and dismaying job seekers. Friday's report forced analysts to re-examine their assumption that the economy would strengthen in the second half of 2011.

They had expected improvement in June after a bleak jobs report for May. They figured that hiring in May had been artificially weakened by temporary factors -- a run-up in gasoline prices to $4 a gallon and factory disruptions caused by Japan's earthquake and nuclear crisis.

But the June numbers were even worse than May's, even though gasoline prices are falling and factories revving up again.

"This is a remarkable, across-the-board backslide," says economist Heidi Shierholz of the Economic Policy Institute.

Sometimes disappointing economic reports look better on closer inspection. This one gets uglier.

**

​And Thomas Sowell weighs in on the economy's unknown unknowns.

 

There are similar kinds of gaps in our knowledge in the economy. Unfortunately, our own government creates uncertainties that can paralyze the economy, especially when these uncertainties take the form of "unknown unknowns."

The short-run quick fixes that seem so attractive to so many politicians, and to many in the media, create many unknowns that make investors reluctant to invest and employers reluctant to employ. Politicians may only look as far ahead as the next election, but investors have to look ahead for as many years as it will take for their investments to start bringing in some money.

The net result is that both our financial institutions and our businesses have had record amounts of cash sitting idle while millions of people can't find jobs. Ordinarily these institutions make money by investing money and hiring workers. Why not now?

Because numerous and unpredictable government interventions create many unknowns, including "unknown unknowns."

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