The theme of this month’s jobs report ought to be ‘not enough.’ The latest disappointing numbers are far lower than the optimistic expectations voiced by many economists after ADP reported payroll growth of 238,000 in December 2013. CPEG has been arguing for years that what job growth the U.S. economy has seen since the official end of the ‘great recession’ has been inadequate. In fact, the total number of employed workers in the U.S. is still lower than it was before the start of the great recession. The Bureau of Labor Statistics announced this morning that the economy added 74,000 jobs in December 2013, falling far short of expectations. This anemic job growth brings the total employment in the country to less than what it was in November 2007, the month before the great recession started. It’s important to note that if the economy had added the 200,000+ jobs that many expected, we would still not have reached pre-recession employment levels. Even a ‘good’ jobs report would have been disappointing.
The markets – Dow is up more than 150 points – and the media – “economy set to add most jobs since 2005” – liked today’s jobs report: 203,000 jobs created in November 2013. And, of course, we should be glad over 200,000 people had jobs in November who didn’t have them in October. But does this mean that the economy is up and running for us? Perhaps the best way to answer that question is to take three dates: Nov 2007, the last month before what has been labeled the “great recession,” June 2009, the official end of the “great recession”, and today and look at the job numbers. The table below provides that comparison (all numbers in 000s, population and labor force are people 16 and over, seasonally adjusted).
Though payroll jobs (establishment survey) increased by 204,000 in October, overall employment (household survey) declined by 735,000, indicating that the U.S. employment situation remains dismal. More telling, long-term employment (of 27 weeks or more) remains at 4.1 million, approximately double the level of prior recessions. The Official Unemployment rate also remained essentially unchanged, increasing slightly from 7.2% to 7.3%. The more accurate U-6 unemployment rate which takes into account discouraged workers and workers working part-time who would like full-time work also rose from 13.6% to 13.8% in October.
The Bureau of Labor Statistics issued the September Employment Situation report on Oct. 22. This came 18 days after the scheduled Oct. 4 release because of the 15 day government shutdown. As expected, the September report portrays a stagnant economy, creating jobs barely at a pace commensurate with population growth and far from a rate that would reflect an economy on the road to recovery.
Nonfarm employment increased by all of 148,000 jobs, a smidge below the 150,000 or so jobs commonly believed are needed to keep pace with population growth. This rate was half of the 300,000 new jobs that should be created monthly in an economy working its way out of the doldrums. Unchanged was the number of Americans working part time who otherwise desire fulltime work. There are 7.9 million of these workers.
Dear President Obama:
Like many Americans I’m nauseated by the current John Boehner/Tea Party willingness to take the entire country hostage and directly harm the lives of millions of people affected by the government shut-down, in an effort to sabotage health care provision for millions of other people who are finally able to get health insurance through the Affordable Care Act, and I applaud your refusal to “negotiate” with Boehner and the 30-40 Tea Party Republican Congressman hostage takers.
(Note to John Beohner: if you have become so attached to power that that you cannot risk your job for the good of the country you need to resign.)
But I have two additional action recommendations that I would like you to consider: