NEW YORK (TheStreet) -- The economy created only 142,000 jobs in August, down from 212,000 in July, indicating the economy significantly slowed this summer.
Jobs creation is well below the pace needed to re-employ all the workers displaced during the financial crisis. The economy is in crisis!
Although official GDP estimates indicate the economy expanded in the second quarter at a torrid pace -- 4.2% -- much of that was inventory build, as consumer spending continued to drag along at a disappointing pace and capital investment, especially in manufacturing, remained subpar.
Third-quarter growth is likely in the range of 2%, and the Obama administration's spin doctors will have a tough time selling these jobs data as anything but bad news.
Simply put, the administration's big spending stimulus policies and the Fed's obsession with pumping money into a moribund New York financial industry have failed.
Also, now Americans are seeing the real cost of Obamacare health care subsidies. Employer mandates are not much good to working families if no one in the family is working.
The official jobless rate is down to 6.1%, but real unemployment is closer to 18%, because so many prime-aged adults are sitting out the party. For example, one in six adult males between the ages of 25 and 54 has no job, and may have simply quit looking thanks to "compassionate" government policies that reward able-bodied men and women to sit at home and watch ESPN NFL reruns or The View.
Since 2000, Congress has beefed up the earned income tax credit, and expanded programs providing direct benefits to low- and middle-income workers, including Obamacare and Medicaid, food stamps, and rent and mortgage assistance.
Those buy votes but do little to encourage work.
Benefits phase down as family incomes rise, and often tax additional income as much as 50%. Consequently, government benefits penalize work and encourage one partner in two adult households to be idle.
Also, those programs offer incentives for single people to work only part-time and contribute to a skills shortage.