The Empoyment Report: Better Than Expected, But Still Not Good Enough
The jobs numbers are out this morning, and they show the unemployment rate increasing to 9.0 percent, and the creation of 244,000 new jobs (the private sector added 268,000 will government jobs fell by 24,000 -- the net figure of 244,000 was better than many analysts expected). This does add jobs over and above the 100,000-150,000 needed each month to keep up with population growth. But remembering that we have millions and millions of people out of work, at this rate it will take more than five years to get back to full employment (job growth during the recoveries from previous recessions was much stronger than this).
Many analysts are hailing this report as good news, and it's certainly true that net job growth of 100,000 or so is better than losing jobs (the labor force participation rate was unchanged at 64.2 percent, and the employment-population ratio decreased slightly to 58.4 percent). But the recovery remains sluggish, and with recent indicators showing that the economy is sputtering -- GDP growth was not as robust as hoped, new claims for unemployment have been trending upward, business investment has not been as strong as needed, etc. -- there's no sign of that changing anytime soon.
Growth is, by definition, slow at turning points. But once the economy does get itself turned around, growth should begin to accelerate -- we should see 300,000, 400,000 or more jobs created each month as in past recoveries. It's been awhile since the NBER called the end of the recession in June of 2009, so the economy has had enough time to show accelerating growth, but so far growth has remained sluggish.
That could change, but the prospects of five or more years until we return to full employment is not an attractive outcome. With the indicators showing middling growth at best for now, perhaps its time -- past time in fact -- for policymakers to take the unemployment crisis as seriously as they are taking the prospects of a debt crisis, inflation, a crash of the dollar, or other problems that are stopping them from trying to do more to stimulate employment. The slow recovery of unemployment, which can have a long-run impact on economic growth, is a crisis that needs to be addressed. We can't help to stimulate job growth if we don't try, and so far we aren't trying anywhere near hard enough.
