Today’s headlines trumpet the gain of 280,000 jobs in May and the additional 32,000 jobs in the previous two months. This good news, however, masks the disappointing numbers that come hand in hand. Even with today’s increases, the average monthly job creation in 2015 is only 217,000, which is far lower than the nearly 260,000 last year. That said, job creation remains sluggish at best.
Additionally, the labor force participation rate of 62.9 percent remains at the average it was last year. In fact, it is still over 3 percent lower than it was at the beginning of the financial crisis, and roughly where it was at the height of the Great Inflation of the late 1970s. Also, the unemployment rate rose to 5.5 percent. This increase was caused by May’s labor force rising by 85,000 more people than the combined May job increase plus March and April’s revision. That fact further illustrates that job creation is not even keeping up with the growth in the labor force. That said, despite the apparent jump in jobs, more people were unemployed. The average workweek remains stuck at 34.5 hours, as it has been for the past four years.
When all of these numbers are taken into account, it paints a much fuller picture of the serious crisis in the job market. Despite pumping more than $3.5 trillion into the economy and keeping interest rates at historic lows, the Federal Reserve’s policy appears to have failed. Middle class workers continue to find it hard to get a job, and even if they do, their hours fail to grow with the economy. The Fed’s policy has greatly benefited those who own capital, but not the average American. Meanwhile the Federal Reserve seems paralyzed, not knowing what step to take next, nor when to take it. This is no way to run the monetary policy of the United States. It’s time to fix the dollar.
Steve Lonegan is the Director of Monetary Policy for American Principles in Action.