Another jobs nothing burger

As I said two months ago about the April jobs number (April jobs: a nothing burger), today's June jobs report doesn't change the big picture at all, even though it was touted as an upside surprise (+222K vs. +178K). The best that can be said about the jobs market is that the rate of growth of private sector jobs—which was roughly 2% by the end of last year but which has slowed to 1.7% of late—has stopped declining. With jobs growth of 1.7% and productivity of 0.5% or so, real GDP is likely going to average a little over 2% for the foreseeable future. Which is what it has been doing since mid-2009. These two charts tell you all you need to know about the jobs market:

Private sector jobs are the ones that really count. They've increased by about 175K per month over the past year. That's substantially less than the 240K per month we enjoyed in the 1997-99 period. And the rate of growth has been trending downward at a modest rate over the past year or two.

The best jobs growth we've seen over the past 15 years or so was just over 2% per year. Currently, private sector jobs are growing at a 1.7% pace. Nothing to write home about, but not exactly a disaster either. 

The reason this has been a tepid recovery is that we've had weak jobs growth on top of very weak productivity growth, and both are explained by a dearth of productive investment. To be sure, corporations have generated significant profits in the current recovery, but most of those profits ended up funding the federal government's voracious appetite for debt. I explained this three years in this post.

What happened to all the profits? Almost all of the most incredible surge in profits in modern times was squandered by our government, flushed down the Keynesian drain.