If we make it through December

The BLS unemployment report for November is out, and it ain’t pretty.  Less than a third as much job creation (+39,000) as expected, not nearly enough to absorb new entrants into the labor force, so the official unemployment rate edged up to 9.8%.  (The comprehensive U-6 unemployment rate was unchanged at 17.0%.)

The private sector added 50,000 more jobs, and the government shed 11,000 jobs.  It is a bit hard to disentangle private sector jobs from the government, in view of the fact that the $787 billion stimulus went mostly to the private sector as opposed to new government jobs, but it is rather remarkable how little the government is doing in terms of direct job creation.  At the federal level this comes down to politics — in this conservative age, creating 3.5 million temporary government jobs, as the New Deal did each year, is considered a bad thing.  Indirectly creating or saving 3.5 million jobs, as the Obama Administration credits the stimulus with having done, is politically viable (or was in early 2009) but hard to prove, which is probably why the stimulus is unpopular with most of the public.  At the state and local level, of course, it comes down to balanced-budget requirements — with tax revenues down for the count, everyone’s cutting government payrolls to try to close the budget gap.  (Without emergency federal aid to make up the difference, the recession gets magnified at the state and local government level.)   If I eyeballed the numbers correctly, employment is down for the year at all three levels of government.

The only good news I noticed in the report was that the number of temp workers, a leading economic indicator of employment, increased for the fourth straight month.  (And even then, the increase is smaller than in several months earlier this year.)  Another leading indicator, weekly hours worked, did not improve, instead holding steady at 34.3 hours.

Now, the unemployment rate is a lagging indicator, and there are positive signs of recovery elsewhere, but that’s cold comfort to the nation’s 15 million unemployed. Seems like we’re back to where Merle Haggard  was in 1973, especially with Republicans in Congress so far refusing to extend unemployment benefits for the long-term jobless:

Advertisements

Tags: , , , , , , , , , ,

3 Responses to “If we make it through December”

  1. kerryl29 Says:

    “Indirectly creating or saving 3.5 million jobs, as the Obama Administration credits the stimulus with having done, is politically viable but hard to prove, which is probably why the stimulus is unpopular with most of the public.”

    My feeling is that the stimulus appears to be unpopular with the public because it’s widely regarded–at the mass level–as having failed. And the reason for that, I believe, is that it’s very difficult, politically speaking, to sell the following notion: do you realize how much WORSE things would be if we HADN’T appropriated nearly $800 billion? That’s a losing argument (again politically speaking).

    • Ranjit Says:

      I agree. That’s basically what I was trying to say in shorthand. Many people think the stimulus failed because they don’t see the job creation. Whereas during the New Deal the 3.5 million jobs created were with the WPA, PWA, CCC, NYA, etc. and thus were very easy to point to and give the government credit for. It’s also hard to notice job creation when the aggregate jobs picture has improved so little. Even in the Great Depression unemployment fell sharply during Roosevelt’s first term.

  2. Mark E Says:

    Perhaps Obama should have followed the New Deal more closely and had the Federal government create more of the jobs themselves, rather than to expect the private sector to do so. I liken this to TARP as we haven’t seen the lending as we had hoped.

    I always did think state and local governments, as well as programs for small businesses, should have gotten more of the stimulus money. They would have much more incentive to create more jobs with these funds.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: