The latest jobs numbers have come out. The good news is that we didn’t lose any jobs. The bad news is that we don’t appear to have gained as many as we should have. This is the
spending Christmas season.
The labor market remains 7.4 million payroll jobs below where it was at the start of the recession in December 2007, and this number understates the size of the gap in the labor market by failing to take into account the fact that, simply to keep up with the growth in the working-age population, the labor market should have added around 3.6 million jobs in the nearly three years since December 2007. This means the labor market is now roughly 11 million jobs below the level needed to restore the pre-recession unemployment rate (5.0% in December 2007). To achieve the pre-recession unemployment rate in five years, the labor market would have to add nearly 300,000 jobs every month for 60 months in a row. An increase of a mere 39,000, like we saw last month, is just not enough for the 15.1 million unemployed workers of this country.
Earlier this week, the federally funded extended unemployment insurance benefits expired. If they aren’t reinstated, 2 million workers will prematurely lose benefits this month. Importantly, these benefits serve two purposes. First, they provide a lifeline to the unemployed and their families during the deepest and longest downturn since the 1930s. Second, these benefits also boost spending in the economy and therefore generate jobs. The continuation of unemployment insurance extensions through 2011 will create or save around 900,000 full-time-equivalent jobs. With a jobs deficit of 11 million jobs and an unemployment rate of 9.8%, Congress must do the right thing for these workers who lost jobs through no fault of their own and for the health of the overall economy.
MB at DK was very surprised by the numbers. His post solidifies the problems in the jobs numbers. He writes:
Stunned would seem to be the most common reaction to last week’s job report for November. Instead of 160,000 new private-sector jobs that the expert consensus predicted would be announced – with many analysts predicting far more – the Bureau of Labor Statistics said only 50,000 additional private-sector jobs had been created. And, because 11,000 government jobs had been terminated, the net was a paltry 39,000. More than one commentator called that “awful.” And, indeed, it was.
But it was a surprise because there had been a plethora of mostly good news in the run-up to the jobs report, such as here, here, here, here, here, here and here. While many analysts were scratching their heads Friday – even though numerous reports from the Federal Reserve and other sources have been saying ever since the gross domestic product moved into positive territory five quarters ago that job growth could be slow for years with lots of ups and downs month to month – a few took a different approach. (Some people, of course, don’t accept the government’s job tally at all for any month. All those numbers are completely fabricated, they say, starting with the surveys themselves. But that’s another discussion.)
One of the analysts who challenged Friday’s report was Stephen Gandel at Time/CNN’s The Curious Capitalist. Gandel said the BLS missed 350,000 jobs in its November count. Retail jobs made up the bulk of these. The idea that retail hiring was minus 28,000 in November does seem counter-intuitive. This year is the best in the past three years for holiday retail sales, and Black Friday and Cyber-Monday looked encouraging. So how could that sector of the economy be shedding jobs?