What A Terrible Economy

Wait a second. I thought that job creation had suffered under W. So let's explain this...

The unemployment rate dipped in June to its lowest level in nearly four years as employers expanded payrolls modestly, a sign that the nation's job market is plugging — not powering — ahead. Wall Street rallied.

The latest employment snapshot from the Labor Department on Friday supported the view of Federal Reserve Chairman Alan Greenspan and his colleagues that the economy is in good shape and the labor market is gradually improving despite high energy prices.

The civilian unemployment rate dropped to 5 percent in June, down a notch from 5.1 percent in May and the lowest since September 2001. The jobless rate has drifted downward after hitting 6.3 percent in June 2003, its highest point during the economic recovery.

Payroll growth, on the other hand, has been choppy from month to month. Employers added 146,000 new jobs in June, up from 104,000 in May.

"A lean, mean jobs machine this economy is not," said Joel Naroff, president of Naroff Economic Advisors. "But jobs are being created and the unemployment rate is falling so you really cannot complain too much."

Although economists were forecasting a more robust gain — of around 195,000 jobs — for June, their disappointment was tempered by what turned out to be better job growth in April and May. Employers added 44,000 more jobs in those two months combined than the government had previously estimated, according to revised figures released Friday.

On Wall Street, investors buoyed by the jobs news said it suggested the economy is advancing at a modest pace that won't fan inflation. The Dow Jones industrials soared 146.85 points to close at 10,449.14.

For the first half of this year, job growth has averaged 181,000 a month, close to the average 183,000 jobs created each month in 2004. "That's an amazingly steady and healthy pace," said Stuart Hoffman, chief economist at PNC Financial Services Group. "Is 180,000-plus jobs a month great? No. It is good and solid? Yes."

(hat tip: Instapundit) As someone who thinks fiscal policy is not as crucial to job creation as monetary policy, I'll refrain from gloating. Bush created the conditions for a good economy, thanks to the tax cuts, and Greenspan and the Fed did the heavy lifting.

But darn those tax cuts -- take a look at the deficit. If only they'd raise taxes, they'd lower that darn deficit... or, maybe not...

Rising tax payments and a growing economy may push the U.S. federal deficit down to $325 billion or lower, a 24 percent decline from the previous estimate, the Congressional Budget Office said.

The agency, in a monthly snapshot for fiscal 2005 that ends on Sept. 30, said tax payments and spending were running ahead of the year-ago pace. As a result this year's deficit ``will be significantly less than $350 billion, perhaps below $325 billion.''

The White House is scheduled to issue its revised estimates on tax collections, spending and the deficit on July 13. In February, White House budget director Joshua Bolten forecast a deficit of $427 billion, about 3.5 percent of the nation's gross domestic product.

"Treasury receipts have been skyrocketing since April,'' and in June "corporate receipts will lead this boon,'' said Ellen M. Beeson, an economist at the Bank of Tokyo-Mitsubishi Ltd. in New York, in an interview before the report. Her firm expects the July 13 report to forecast a 2005 deficit of $315 billion to $330 billion.

All right, enough sarcasm. But let's review -- increased revenue due to a booming economy which was stimulated in part by those tax cuts. Man, that's just a killer idea -- maybe if we can convince Congress to cut spending, we'd really be in good shape.