In advance of this morning's July jobs report:
Unemployment is the metric that most concisely captures the public’s long-running economic anguish. The loss of a job – and the inability to find a new one – damage not just the individuals involved but their families, friends and associates, either through direct economic and emotional impacts, or through the fears, frustrations and pinched opportunities experienced by those still working but on tenterhooks in this shrunken job market.
At 9.5 percent, or anywhere near it, unemployment poisons the public mood, producing a damaged sense of well-being and deep frustration with political leaders. But 9.5 percent itself masks the impact, since it just measures unemployment among people who are looking for work. Check the broader measure called U6, which includes unemployed people who’ve given up looking or settled for part-time work when they really want something full-time. U6 unemployment in June was 16.5 percent – one in six members of the civilian labor force.
Look also at the duration of unemployment – a median of 25.5 weeks in June, vastly higher than the historical norm in data since 1948. This chart from the St. Louis Fed goes back to the 1960s; it's a heart-stopper.
Public confidence in the economy, already bad, has grown sharply worse in the past six weeks. Our weekly Consumer Comfort Index has dropped into what we call the death zone, -50 on its scale of +100 to -100, a level it’s seen in only 27 weeks out of the past 24 years. It’s down 9 points since late June from its best of the year (albeit dreadful) to match its worst of 2010, 4 points from its lowest on record since late 1985, set in December 2008 and January 2009. Today’s -50 compares with a 24-year average of -13.
In the index’s individual measures, 92 percent of Americans say the national economy’s in bad shape – nearly everyone, and 29 points more than the long-term average. Seventy-six percent call it a bad time to spend money; 57 percent say their own finances are hurting.
In terms of political impacts, note our Frustration Index, 67 on its scale of 0 to 100, higher only in fall 2008 and in 1992. Anti-incumbency’s at a high in our data since 1989, and President Obama’s approval for handling the economy is the lowest of his term, at 43 percent. While the Democratic Party leads the Republicans by 8 points, 42 percent to 34 percent, in trust to handle the economy, that’s down from a 19-point Democratic advantage in early 2008. And the public’s dissatisfaction puts the in-power party at greatest risk.
Sixty-two percent in our latest poll favored the latest extension of unemployment benefits; nonetheless concern about the deficit is high enough that Americans in our poll divided evenly on whether the government should spend more “to boost the economy in a way that creates jobs” or leave job-creation to the private sector. But while consensus on a solution is lacking, the economic reality’s clearly untenable – with the clear portent of a political price to be paid November.