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We Got The Jobs Report, Now What?


And after Friday's unexpectedly weak jobs report, the financial markets are gearing up for more volatility.

NPR's Jim Zarroli looks at the latest slowdown and what might be done to get the economy moving.

JIM ZARROLI, BYLINE: If there was any doubt about it before, the unemployment report confirmed it: the U.S. economy has once again fallen into a spring swoon.

HEIDI SHIERHOLZ: It's sort of dampens our hopes that we're really gaining momentum.

ZARROLI: Heidi Shierholz is a labor economist at the Economic Policy Institute. She says over the past few months, the economy has added nearly 100,000 jobs on average each month, which is just about enough to keep up with population growth. But she says it's not enough.

SHIERHOLZ: I'm not worried were slipping into recession. But I'm very worried that we are not getting the kind of job growth that we need to put 12.7 million unemployed Americans back to work.

ZARROLI: There's no easy explanation for this slowdown. Unlike the past two years, there's been no Japanese tsunami and energy prices have been falling. The economy is simply losing steam and not just in the United States. Europe is entering a recession, even India and China have seen growth slow.

Carey Leahey is senior economist at Decision Economics.

CAREY LEAHEY: Everywhere you look, people are taking out their erasers and reducing their growth expectations in every major market.

ZARROLI: Leahey says a big part of the problem continues to be the debt crisis in Europe. Lately, there's been talk of bank runs in Spain and Greece, and four years after the financial crisis got under way, world leaders seem unable to address it. Leahey says the markets are waiting for some clear leadership by European officials.

Meanwhile, in the United States, there is growing pressure on the Federal Reserve to step in. One idea is for the Fed to implement another round of quantitative easing, which is a way of pouring more liquidity into the financial system. Leahey says that could help.

LEAHEY: It's not that it would make a significant difference in the very, very short run, but it would be a positive sign that the Fed is on the case. And that the - in some sense, the sheriff is alive and watching the situation.

ZARROLI: Leahy says the U.S. economy is also being affected by the continuing disputes over taxes and spending. Unless Congress and the White House can agree on a fiscal plan by the end of this year, there will be a automatic cuts in federal spending and tax cuts will expire.

The uncertainty is taking a toll on small companies like Quality Float Works, a fourth-generation family-owned manufacturer in Illinois. Jason Speer is its senior vice president.

JASON SPEER: One of our biggest hesitation in hiring people and affecting our decision-making is the uncertainty of tax policies in the federal level. You know, if there is some certainty, we can plan. Without that it's hard to make decisions on what was going to cost, how it's going to affect their bottom line.

ZARROLI: But there aren't many quick fixes right now. Heidi Shierholz says Congress could make a difference by channeling more money to state and local governments, which have cut hundreds of thousands of jobs since 2008.

SHIERHOLZ: Getting fiscal relief to state could just stop that hemorrhaging. It would be a huge boost to the economy, shoring up the safety net; substantial additional investment in infrastructure. Those are the kinds of things the economics calls for.

ZARROLI: But Shierholz acknowledges that's not so easy to do politically. There's no clear consensus about how to fix the nation's problems. And even if there were it seems unlikely in an election year that anything will get done. In the meantime, as Friday's jobs report suggests, the U.S. economy continues to sputter.

Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.