Jeff Frankel on the jobs report:
Recent Jobs & Growth Numbers: Good or Bad?: This morning’s US employment report for July shows the 33rd consecutive month of positive job gains, by my count. Earlier in the week, the Commerce Department report showed that the 2nd quarter was the 16th consecutive quarter of positive GDP growth. Of course, the growth in employment and income has not been anywhere near as strong as we would like, nor as strong as it could be if we had a more intelligent fiscal policy in Washington. But it is much better than what most other industrialized countries have been experiencing. Many European countries haven’t even recovered from the Great Recession, with incomes currently still below their peaks of six years ago.
GDP growth has fallen well below 2% in the last three quarters. But I think we know the reason for that: dysfunctional fiscal policy. Washington has been the obstacle to a normal robust recovery, through a combination of such factors as spending cuts in 2011 and 2012, the expiration of the payroll tax holiday in January 2013, the sequester in March, and now needless business uncertainty arising from new time-bombs in the next two months, induced once again by partisan deadlock over passing a budget and raising the debt ceiling. Given all that, it is surprising that private consumption and investment have held up as well as they have.
The right policy bargain, of course, is fiscal stimulus in the short term, not fiscal contraction, combined with steps today to address the entitlements problem in the long-term. That would get us back to solid growth. Our current pattern of pro-cyclical fiscal policy is exactly backwards.I want to echo and reinforce what he says about fiscal policy, particularly the need for short-term stimulus. [He also compares this recovery to the recovery when Bush was president -- guess which is stronger?]