The US recovery is faltering. Last Friday's jobs report, though not discomfiting the markets, contained more bad news than good, and followed a slew of other disappointing indicators. What Congress can do in current circumstances is limited, but Washington's politicians are making sure to avoid doing even that. A limping recovery and a squabbling, impotent government are no formula for restoring confidence.
Non-farm payroll employment fell by 125,000 in June. This was roughly as expected, since the government was shedding temporary census workers. The headline unemployment rate fell from 9.7 per cent to 9.5 per cent – good news, on the face of it, except that it happened for the wrong reason. The number of people searching for work fell: if you are out of work but no longer looking, you are not “unemployed”.
Private-sector hiring, a key number, came in at 83,000, less than expected, following an even worse number for May. Average hours worked and hourly earnings both fell, albeit modestly – leading indicators of continued weakness in the jobs market. Seasonally adjusted, the median duration of unemployment rose to 25 weeks, adding to fears that European sclerosis might infect the US.