If yesterday’s disastrous stock market showing left the economy hanging by a finger-hold on the edge of a double-dip recession, this morning’s job report had the potential to act as the big boot stomping on that precarious grip. While many economists were predicting July’s figures would be slightly better than last month’s, almost everyone agreed that it was impossible to know what exactly was going to happen.
Then, at 8:30AM, the economy was given a helping hand in the form of 117,000 jobs added in the month of July – well ahead of the 75,000 predicted by most analysts. Unemployment had dropped down to 9.1%, the Dow Jones industrial average jumped as many as 171 points after the opening bell and the air filled with the sound of relieved exhales.
NRF President and CEO Matthew Shay issued the following statement in response to the Labor Department’s report:
Americans are breathing a sigh of relief that unemployment numbers are taking a step in the right direction . . . Now that the first chapter of the debt ceiling debate is behind us, retailers need Congress and the Administration to advance a strong jobs agenda that includes corporate tax reform, visa reform and passing the pending free trade agreements.
As Shay said, today was undoubtedly a step in the right direction. Compared to the last several months, Americans have every reason to see today’s numbers as a glimmer of hope. The retail industry in particular has a proud stake in the recovery process after contributing 26,000 jobs last month, second-most behind only the health care industry.
However, even as this post is being written, the Dow Jones is beginning to dip again as this morning’s optimism fades. This month’s numbers may be better, but the number of people out of the work force has jumped 2.2 million over the past year to 86.4 million. Additionally, according to NRF’s research partner BIGresearch, only one in ten Americans thinks the employment situation will improve over the next six months; over half say it will take 19 months or longer before the job market shows signs of life.
This isn’t supposed to be a rain-on-the-first-parade-we’ve-had-in-months blog post, but it’s crucial that we turn today’s baby step in the right direction into a steady march toward recovery. As Shay said in his statement, NRF believes that corporate tax reform, visa reform and passing the pending free trade agreements are great places to start.
Corporate Tax Reform
The retail industry, which accounts for one in four U.S. jobs, is the most heavily taxed industry in the nation. Reforming and simplifying the corporate tax code, and the subsequent relief that would provide retailers, would inevitably inject life into consumer spending, increase sales volume and create jobs.
The antiquated U.S. visa process is in desperate need of reform as it continues to drive millions of international visitors to other countries at an enormous cost to our economy. A report issued by the U.S. Travel Association earlier this year outlines common-sense visa reforms that are relatively easy to implement, which could create 1.3 million more U.S. jobs and add $859 billion to the U.S. economy by 2020.
Free Trade Agreements
NRF opposes tariffs and other trade barriers that drive up the prices consumers pay for imported merchandise. Measures targeted at specific countries such as China invariably drive retail sourcing to other foreign suppliers rather than protecting or creating U.S. jobs because most of the products in question are no longer made in the United States in commercial quantities or at affordable prices. NRF welcomed the recent approval of draft legislation to implement free trade agreements with Panama, Columbia and South Korea that could help create U.S. jobs and clears the trade legislation that would make it easier to import merchandise.
Perhaps this morning’s good news will reassure Americans that our country is indeed in a state of “recovery” (i.e. improving). However, further steps must be taken in order to jump-start what has thus far been a stagnant job market. The retail industry will continue to do its part, but help is needed in the form of a strong jobs agenda if our economy is to make the leap from “recovery” to “recovered.”