US unemployment rises to 9.1 percent
The US department of Labor rereleased the new statistics June 3 showing unemployment has increased steadily over the past three months. US government analysts expected unemployment to fall and the US economy to add at least 160,000 new jobs in May – instead about 50,000 jobs were added and unemployment rose.
Defending US economic policy and Obama, despite the numbers, Austan Goolsbee, chairman of Obama’s Council of Economic Advisers said “There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years.”
“The initiatives put in place by this administration — such as the payroll tax cut and business incentives for investment — have contributed to solid employment growth overall this year, but this report is a reminder of the challenges that remain,” Goolsbee added, according to a POLITICO report. “We are focused on promoting exports, reducing regulatory burdens and making the investments in education, research and development, and infrastructure that will grow our economy and create jobs. We will continue to work with Congress to responsibly reduce the deficit and live within our means.”
He warned that panic however over the rise in unemployment may be more damaging than the numbers themselves. If people panic, the economy will not recover.
“The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the administration always stresses, it is important not to read too much into any one monthly report,” he contended.
Republicans leaders disagreed and said the numbers are an example of Obama’s inability to solve America’s economic problems. Citing them as “yet another reminder that Barack Obama has failed to lead our economy back to recovery,” remarked Republican National Committee Chairman Reince Priebus.
“[Obama] continues to cling to failed policies that are causing renewed uncertainty for job creators and adding insult to injury for the millions of Americans that still cannot find work amid rising consumer good prices and a troubled housing market. Instead of continuing to defend an unsustainable status quo, Barack Obama would better serve the American people by joining Republicans in offering serious proposals to cut spending and actually grow our economy,” he added.
“Our economy is not creating enough jobs, and Democrats’ binge of taxing, spending, borrowing and over-regulating is a big part of the reason why,” said a statement from Republican House Speaker John Boehner.
As the US job numbers continue to worsen many fear the recovery may have shifted into a double dip recession. The new numbers are likely to be damaging to Obama has he begins to rally supporters for his re-election campaign.
Peter Schiff, the president of Euro Pacific Capital said the situation is dire. The US is not in a recession; it has entered a new depression.
“He [Obama] has put us on the road to ruin,” he said.
Schiff argued that Obama’s policies have lead to the destruction of the market – namely the auto industry which Obama claimed was a success story. US policy has destroyed the US dollar, increased national debt and killed the real estate market and American jobs.
Government stimulus allowed the problems to get worse, he argued. Many analysts said the stimulus would save the market and inspire growth – it has not.
Other nations are investing in China and allowing China to invest in them. Nations like Sweden are allowing China to manufacture and provide goods while they invest in other industries, specifically the more high tech research and development fields. The US has not taken this approach.
“The US government wants China buying treasuries. They don’t want China buying real assets,” argued Schiff.
For this reason, he claimed, the US prevents China from investing in the US and in unable to see investment growth similar to Sweden, which boasts an economy growing steadily.
A new approach to policy needs to be taken to create US jobs. We need to open the markets, remove barriers such as regulations and taxes and create incentives for companies to hire and invest in America as opposed to overseas.
Schiff said the US government makes it challenging and risky to hire more people, thus they opt to save their money instead of using it to invest in people.
“With all the taxes and all the regulations, they can’t do it,” he said.
He said the US needs to allow the free market to work and solve the problem as opposed to more government action and involvement.