Where are the jobs?
It was the question House Speaker John Boehner posed at the start of his press conference this morning, but, frankly, who isn't asking that question today? The June jobs report isn't just disappointing, it's a disaster. We expected fewer public sector jobs. Much of the spike in government work came from the stimulus spending plus the bloat in public sector hiring of the early 2000s. But the true disappointment is in private sector jobs with just 57,000 new hires in the month.
Now, permabears like Nouriel Roubini are tweeting that the economy could stall by 2012 - which means he believes that the economy could dip again into recession (even though it feels like we never left it). Moreover, economist Mark Zandi predicting this morning that the White House will go for MORE stimulus spending, even though the track record on stimulus spending is poor, if not downright a disaster. And, Zandi should know - his projections and advice are closely followed by the Obama administration.
There is one thing that is working right now: Small business. This week's upbeat numbers from ADP - a payroll processing company - evidence that trend. Policy makers need to turn now to what can be done to encourage that sector. Our one best hope for this economy right now.