In a recent report released by the Bureau of Labor Statistics (BLS) for the month of June, the US labor force grew by 80,000. While this figure may seem to be astounding, it did not do anything to lessen the country’s unemployment rate, currently at 8.2 percent. This means the country has suffered from unemployment for 41 straight months. The United States must lower the bar below 8 percent to break free from the unemployment branding.
This also means that, despite initial projections of a positive first half of 2012, another month has passed without any substantial decline in the number of unemployed Americans. It definitely looks like nothing significant has happened during the first half of 2012 in terms of elevating the employment rate.
There were modest job gains in numerous sectors, specifically in temporary help services (+25,000), professional and technical services (+18,000), accommodation and food services (+14,000), health care (+13,000), and manufacturing (+11,000). However, job losses in information services (-8,000), retail trade (-5,000), and government (-4,000) kept the employment rate from rising as it seemingly should have.
Taxation reforms initiated by the Obama Administration may sound good on paper, but many sectors are appalled by the new tax policies and the possible repercussions they might cause the US economy once they are approved and activated. Obama’s tax policies, referred to as “Taxmageddon”, will push for higher taxes on investors and workers.
Researcher Rea Hederman and policy analyst James Sherk concurred that while the job market is still holding out, the anticipated hike in taxes starting next year will discourage employers to hire more personnel and make more investments. Many businesses will rather hold back on any hiring or investment plans until the Congress makes a move on “Taxmageddon”.
And this disappointing news can greatly affect the upcoming November 2012 presidential elections.
Employment analyst Patrick Sims, financial researcher for Hamilton Place Strategies, asserts it will now be impossible to bring the unemployment rate below 8 percent before the elections. This could spell a bad outcome for incumbent US President Barack Obama, whose economic policies have so far not shown much effect in relieving the country’s current economic conditions.
“Time has run out for the President to get the unemployment rate below 8 percent by Election Day,” Sims wrote in his column for Hamilton Place Strategies.
According to calculations made by some employment analysts, the US job market needs to create 219,000 to 322,000 jobs by October 2012 if the unemployment rate is to be reduced below 8 percent before Election Day. Looking at the whole picture and other figures, reaching that goal is seemingly far fetched.
Aside from unemployment problems, Sims also said that if current economic concerns, particularly tax and spending issues, are not well addressed and remedies found, then the United States will be on the verge of another economical collapse. However, that particular scenario is still completely avoidable, said Sims. Recession may be knocking on the country’s door again, but with the right leadership and tough-decision making, Obama can still turn this around.
He won’t be able to reach his goals, but he should still be able to avert another recession, claimed Sims.