Positive numbers, but politicians hedge their bets

Published on NewsOK Modified: July 3, 2014 at 5:16 pm •  Published: July 3, 2014
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WASHINGTON (AP) — Does anyone in politics dare talk up the economy? Apparently not.

After five months of steady job growth and with unemployment hitting a six-year low, the reaction in Washington Thursday was a collective "Yeah, but ..."

Across the political spectrum, liberals and conservatives still found reason to despair and point fingers — a function of election-year politics, been-there-before skepticism and honest perceptions by many Americans that the recovery has yet to improve their lives.

Consider this from Democratic Sen. Amy Klobuchar of Minnesota: "Too many working families are still treading water. Our focus now must be on solutions that strengthen the middle class and give more hardworking Americans a fair shot by raising the minimum wage, making college more affordable, and investing in workforce training."

And this from Republican Party Chairman Reince Priebus: "We're glad to see some Americans found work last month, but we can't rest until jobs are easy to find. That's why Republicans have passed dozens of jobs bills in the House of Representatives. Sadly, Democrats in Washington, D.C., have other priorities."

Even President Barack Obama, who would be eager to take credit for an economy on the mend, felt compelled to throw in a dampening caveat as he drew attention to the 288,000 jobs created in June, to the lower, 6.1 percent unemployment rate and to the fastest job growth since 1999.

"As much progress as has been made, there are still folks out there who are struggling," he said Thursday. "We still have not seen as much increase in income and wages as we'd like to see. A lot of folks are still digging themselves out of challenges that arose out of the Great Recession."

To be sure, there are real economic reasons to be wary, or at least not euphoric, over the most recent report.

The labor market remains weak, with a labor force participation rate stuck at 62.8 percent, the lowest since 1978. Construction jobs reached their highest level since June 2009 but are still more than 1.7 million jobs below their 2006 peak, according to an analysis of jobs numbers by the Associated General Contractors of America.

Moreover, hiring has tended to be predominantly in low-wage jobs, leading to stagnant wage growth, and the number of hours worked per week has not changed. Gains in paychecks are small enough that they can be wiped out by inflation. "The headline number masks the lingering structural weakness in the U.S. labor market," said Lindsey Piegza, a chief economist at the Sterne Agee brokerage house.

"Even if we saw June's rate of job growth every month from here on out, we still wouldn't get back to health in the labor market for another 2 1/2 years," said Heidi Shierholz of the liberal Economic Policy Institute.