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  • Morning Bell: Anemic Job Growth Continues

    Job growth continues to sputter—this morning’s jobs report shows that 12.1 million Americans are still out of work.

    Going against other economic indicators, the unemployment rate dropped to 7.8 percent. Economists are already looking into the drop, saying it seems to be a statistical fluke, because it doesn’t match up with the sluggish job creation and recent downward revision of GDP growth. Heritage’s J.D. Foster says:

    One time out of a hundred, the true figure will be much different than the reported figure. One time out of a hundred for a monthly survey means about once every eight years. What seems to have occurred with the September household survey is the one time in a hundred. The last time the household survey showed such a huge jump in employment was in 1983 during the Reagan-era economic boom. Today’s economy does not look much like the Reagan boom.

    The real story, then, from the more reliable employment survey is the economy created a paltry 114,000 jobs, leaving 12.1 million out in the cold. This story is getting old. And the economy has no good news to look forward to.

    Congress has gone home until after the election. When it returns to Washington, the end of 2012 will be staring us in the face. In just a few short months, the largest tax increase in history will hit America. It sounds like hyperbole, and we only wish that were the case. It’s been dubbed Taxmageddon, because for millions of workers it will be an end-of-working pink slip scenario. But on January 1, a nearly $500 billion tax increase will slam the economy.

    Not only will this mean individual tax increases—if you’re a middle-class family, your taxes will go up around $4,100—but the whole economy will also suffer. The Congressional Budget Office has said that unless Congress and the President act, we will be plunged into a new recession extending through 2013—when we haven’t even recovered from the previous one.

    The irresponsible behavior of Congress and the President in bringing the nation to this state means a significant slowdown is already almost certain. Mounting uncertainty about what, if anything, Washington will do is rapidly draining the vitality out of the economy.

    The facts are plain: The economy will shrink and unemployment will spike unless Congress acts to prevent Taxmageddon. If Congress and the President choose to continue to play politics with the economy, we stand to lose 1.6 million more jobs.

    Why can’t we seem to recover from the most recent recession? According to a new report by Heritage’s Salim Furth, a select group of businesses isn’t hiring: start-ups.

    “Even in recessions, start-up job creation has been a constant—until now,” Furth reports. “Employment at start-up companies has fallen for five years in a row, reaching unprecedented lows in 2010 and 2011.”

    This is devastating because start-ups normally create the vast majority of the net new jobs in the economy, he says. Larger businesses do expand with new jobs, but significant job creation comes from new businesses. And it’s more difficult than ever to jump through all the government hoops to create a new business. The system is completely against job creation right now. As Furth says:

    With new regulations and business requirements in health insurance, small-business finance, environment, energy, and tax compliance, not to mention the ever-expanding reach of state licensure boards, it is expensive to open a business.

    Businesses, and those who would start businesses, are looking at looming tax hikes and new regulations and simply deciding it isn’t worth it. There are many new regulations coming soon, but the Administration has gone silent on what they will be. So employers can’t even prepare.

    Repealing the heavily regulatory Dodd-Frank law and Obamacare, with its 18 new tax hikes, would remove major burdens on businesses and individuals. But that won’t happen before next year.

    Our elected leaders can prevent Taxmageddon. It would be the best thing they could do for the economy, including job creation, in the short term. There is still time, though it is growing short.

    Quick Hits:

    • An email has surfaced that shows the State Department rejecting a security request from the U.S. embassy in Libya, ABC News reports.
    • A top Iranian official says all Iran needs is “24 hours and an excuse” to attack Israel.
    • The Federal Election Commission reached a stalemate on a Democratic proposal to require greater disclosure by third-party groups running political advertisements.
    • Will the Obama Administration attack targets in Libya before the presidential debate on foreign policy? Heritage’s James Carafano says “probably.”
    • What are you doing for lunch today? Join our online chat to discuss the presidential debate at noon ET.
    Posted in Economics [slideshow_deploy]

    12 Responses to Morning Bell: Anemic Job Growth Continues

    1. J E Houser says:

      I agree. The simple and effective answer is: Get the federal over off the back of all of us and our businesses. Being elected to a political office does NOT mean that the recipient is suddenly indoctrinated with intelligence on all or any of the issues.

    2. This should be no surprise this close to this election considering what happened at the debate this week. Romney caught them resting on their laurels. Many of you heard what Axelrod said. Romney isn't going to win. They have to bury the results of the debate with the help of the news media. The liberal judges are doing their part by trying to make the states laws on requiring indentification to vote null and void so they can stuff the ballot boxes.

    3. Fred says:

      Does the unemployment rate reflect the states who are drilling and have very low unemployment? Perhaps those states' rates went down more to reflect the unbelievable change today.? Are the states just averaged together? I'm just wondering. I believe the states are doing better than national average that have Republican governors.

      • Jerome Bigge says:

        Michigan is doing better under Republican Rick Snyder than we did under Democrat Jennifer Granholm.

      • auhunter says:

        I don't know how they came up with that number, but I think someone is cooking the books. I have, with the help of my computer, tried a half dozen scenarios, whjch includes those on the unemployment rolls, underemployed, and those that have dropped off the rolls or have stopped looking for work, and I can't come up with 7.8%, not even close. By my computer's calculations nearly one and a half million people went back to work last moth to make that percentage work, and we all know that didn't happen. That would have made national news in big bold letters and I haven't seen it if it did.

    4. Marlon S says:

      When the numbers look bad for Obama, Heritage and Fox and Romney say they are accurate. When they look good for Obama, then they are wrong. Obama unemployment rate is already better than Reagan's job during his first term, yet you continue to bash them. Reagan would have been a 1 term president if it was up to you all today.

    5. Bobbie says:

      temp jobs shouldn't be included. Permanent jobs should only be included but this administration is destroying the opportunities to provide. More government thievery they call "stimulus" will bring us more temporary jobs that are based on contention because it's taking money that supported the economy and giving it to waste work and jobs that once stood successfully on their own in the free market with respect from the government that knew it's place and protected ours!

      pray for those that think government control is better then their own and open eyes to those elected workers that are deliberately manipulating this matter.

    6. Alfrom Fl says:

      Here we go again as Pres Reagan would say. Reading "The End of Prosperity" we see episodes of spending, high unemployment & deficit spending followed by tax reduction and incentives put in place to foster busness and a recovery. Leading up to the election of people like Reagan and Kennedy who reduced taxes etc. to lead an economic recovery are the pundits and "economic experts" who refuse to admit that lowering taxes produces an increase in jobs. So get set to be confused by economists claiming different outcomes depending upon their assumptions. Time to use common sense and ignore the largely ideologically based claims. Remember, good or bad, Obama believes in more government and gov't spending/higher deficits & taxes to gain his ideologcally based vision of America as a socialist country and Romney wants to restore American Exceptualism and jobs.

    7. RennyG says:

      Didn't congress just come back from vacation?? What is going on?? One hell of a way to run a business, when the business is in a crisus and the leaders go on vacation or fly around the country!!
      2 Chronicles 7:14 – If my people who ar are called by my name will "humble" themselves and pray and seed my face and turn from their wicked ways, I will hear from heaven and will forgive their sins and "HEAL THIER LAND!!" Our choice!!!!!

    8. Opinari says:

      I heard on Larry Elder show, from a caller, something to effect that Obama had made changes in the work for welfare (think that was it anyway). Participants were to re-register to get work training program and were counted in with unemployed—Obama made changes to program where they still get the job training but no longer have to re-register so do not show up as "unemployed."
      I may have this really skewed but Larry Elder indicated he hadn't know of it but had been curious just what Obama was doing screwing around with a program that had been successful for years. Anyway, he said he was going to look into this and see what he finds.

    9. Tom Keating says:

      12.1 unemployed. 114,000 new employees. How many American are actually employed now compared to 2008, 2006, 2000?

    10. ProudLiberal says:

      Hold hands baby!!! We are going to jump off the fiscal cliff and I LOVE it!!! It's about time. Screw you no good for nothing's who pay nothing in taxes in the first place!! RAISE TAXES ON EVERYONE & EVERY BUSINESS!!! BTW, tell Norquist he call kiss his ass goodbye!! And to take his pledge and stick it up the Heritage Foundations ass!! "You people" created this mess and you lie & fear monger & war monger — screw the Republican Party!! It's awesome to watch you IMPLODE!!

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