Labour Market stats for August

Payrolls grew by just 96 K, but previous data were revised down, a sign of economic weakness.  Overtime hours in manufacturing (very sensitive to economic conditions) fell.  Oddly, the unemployment rate fell, but that came from a different survey (of households not firms) and has a much bigger standard error (is more "noisy") than the establishment ("payrolls") survey, and in any case can fall if people give up looking for work and exclude themselves from the labour force (which they did in August).

For now, I'll just show the unemployment rate chart, because it encapsulates the problem.

Note how in previous recoveries the unemployment rate has fallen sharply.  This has been the great strength of the American system: unemployment might soar during recession, but it also falls just as fast in recovery.  This time, its not happening.  Coupla points:

• A sluggish recovery is entirely to be expected when an economy has to rebuild its balance sheets because of too much debt.
• These numbers mean that Obama might well lose the election (forget all the hoopla, in years of strong economic growth, hoi polloi re-elect the incumbent or his party; in bad years they don't)
• If the Romney gets in, the Tea-Party ideology which dominates the Repubs will cause the "fiscal cliff" I've muttered on about before.  GDP will fall at least 3%.  At least.
• Which will push the unemployment rate way above its previous highs.  In fact, to post-war highs, to levels not seen since the Great Depression in the 30s. 
• Very NOT good for shares.