Last Updated:July 27 @ 03:16 pm

Kudlow: The Jobs Report Bad News

By Lawrence Kudlow

Stocks loved today's jobs report, rising well over 200 points at this writing. But equities may be suffering from a certain irrational exuberance. Yes, nonfarm payrolls rose by 163,000 in July. That's better than the prior two months and probably signals no double-dip recession -- at least for now.

But there are a lot of negatives in this report.

For one, the small-business household survey dropped 195,000. That's what drove the unemployment rate up to 8.3 percent. These two factors virtually cancel out the better-than-expected rise in nonfarm payrolls.

By the way, the labor force shrunk by 150,000. The participation rate slipped to 63.7 percent. And the overall U-6 discouraged-workers unemployment rate increased to 15 percent.

Average hourly earnings registered a slight 0.1 percent increase. But that only adds up to a 1.7 percent increase year-on-year, which is below the rising consumer price index.

So Team Obama will undoubtedly continue to tell us that jobs and the economy are getting better, but this mixed employment report takes the steam out of that argument.

A couple of other economic reports coming out this week raise red flags. The ISM manufacturing index came in below 50 for the second straight month, and the ISM services index is barely above 50. (Below 50 signals contraction.) Meanwhile, factory orders fell 0.5 percent and are down 2.6 percent at an annual rate over the past three months. Even worse, core capital-goods orders (non-defense, excluding aircraft) fell 1.7 percent in June and have dropped 3.9 percent annually over the past three months.

In other words, business investment is still weak. So are real consumer incomes. And the unemployment rate continues to edge higher. All this springs from an economy growing no more than 1.5 to 2 percent.

Tax and regulatory threats are everywhere. From Obamacare and the EPA and the NLRB on the regulatory side, to the failure to extend all  the Bush tax cuts, it's a wonder businesses are investing and hiring at all - especially small businesses, which may have stopped dead in recent months.

My modest proposal for the worst economic recovery in modern times is threefold: Extend all the Bush tax cuts, slash the corporate tax rate, and approve and begin building the Keystone Pipeline. This is a supply-side proposal. It's completely unlike all of Obama's goofy, short-term, spending-and-tax-credit stimuli, which have completely failed.

Come to think of it, it's sort of Mitt Romney's economic platform.

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To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2012 CREATORS.COM

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6 Comments

  1. noveldogComment by noveldog
    August 4, 2012 @ 10:51 am

    In other words BHO will continue to lie about the state of the economy while Harry the Reed makes false allegations against Mitt Romney. Is that what you are saying?

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    • bgardner1952Comment by bgardner1952
      August 6, 2012 @ 6:27 am

      Pretty much sums it up from what I see.

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    • inluminatuoComment by inluminatuo
      August 6, 2012 @ 9:00 am

      You have to realize that when you cannot run on your accomplishments, which are based only on the re-distributions of others accomplishments, money and talent, you have to manufacture an unrealistic image of the world and “Hard Sell” it to an uninformed public. Obama’s problem is that the more the public gets informed and his deceptions get revealed, the faster his illusions burn away in the light of the truth and the wind of change blows away the smoke of his mirrors.

      American investors got their investment hands burnt and singed when Obama turned up the socialist heat too quickly on the slow cooking American frogs that were slowing cooking away in his pot of creeping socialism and will continue to pull back the hand that feeds America and its industry until the source of that heat is removed.

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  2. billwvComment by billwv
    August 4, 2012 @ 10:52 am

    Obama should be renamed: Ofailure or Obullmanure.

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  3. sweetypieComment by sweetypie
    August 4, 2012 @ 12:12 pm

    THE SAME OLD NEWS AND THE SAME OLD LIAR IN CHIEF,
    IMPEACH, IMPEACH, IMPEACH THIS WHOLE GOVERNMENT, DELETE THEM WE DONT EVEN NEED REMINDERS OF THEM. WAKE UP AMERICA FROM YOUR DEAD SLEEP YOU ARE ALLOWING THE GRIM REAPER TO SEND YOU TO HELL WITH THEM, FIRE AND BRIMSTONE DO YOU KNOW WHAT THAT IS? IT IS ETERNAL PUNISHMENT

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  4. inluminatuoComment by inluminatuo
    August 6, 2012 @ 8:53 am

    It is Barack Obama and his administration, particularly his over-the -shoulder Eric Holder Boulder that sits blocking our road to an economic recovery. Obama’s liberal landslide victory followed by the liberal landslide of failed socialist experiments, covered America’s economic road to recovery with the rubble of a Brokeback Mountain ideology of failed social experimentation that broke the economic backs of, our citizens, our government and our future generations of American children who they have buried in generational debt to the third and fourth generation. Sound minded Americans who know how to create, run, and save their businesses from the onslaught of government depredations and tax attack are sitting on their money, their cash, their brains, and their ambitions until such time as the American voters do their job and remove the economic roadblocks to American success in the November election.

    Rest assured my fellow Americans, All WILL again be well, once America rejects the foreign influences that have led this country astray,,,,once men and women of sanity and accomplishment replace those currently in government infested with liberal insanity and only have the ability to accomplish things not with their own hard earned effort which they never display, but only with the hard earned re-distributed life blood and sweat equity earned by others. The “Others” who are fed up and sitting on the job creating sidelines with their talents and cash will respond only when the threat is removed. This time in November we have a chance at real “Hope and Change” when we change the soiled American diaper that calls itself a Democrat administration.

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