The Economy Has Hit a Sticky Patch—But Don’t Blame Obamacare

The headlines from Friday’s job report are that modest job growth continued in July—the monthly payroll figure was up by a hundred and sixty-two thousand—and the unemployment rate dipped to 7.4 per cent, which, the White House was quick to point out, is the lowest figure since December, 2008. That’s good news, as far as it goes. But the underlying reality is that the U.S. economy has hit a sluggish patch, as tax hikes, the sequester, and recent statements from the Federal Reserve have combined to restrain spending.

It’s not as if the economy is plunging into another recession, but hopes that it would finally achieve “takeoff speed”—a rate of growth at which it would no longer need extensive government support—have again been disappointed. In the past few months, a series of buoyant job reports have disguised this reality, leading some analysts to believe that households and firms were shrugging off the tightening policies. Based on this sort of thinking, the consensus on Wall Street was that the new payroll figure would come in at close to two hundred thousand.

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