The Employment Report: Still Moving Sideways
Today's employment report continues to point to a weak labor market. The unemployment rate held steady at 9.1 percent, and only 103,000 jobs were created (a figure that includes 45,000 workers returning from strike):
Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. In September, job gains occurred in professional and business services, health care, and construction. Government employment continued to trend down.Even if the 103,000 wasn't inflated by workers returning from strike, that's barely enough to keep up with population growth, and it's far short of what is needed to reabsorb the millions of unemployed. Thus, while this report doesn't point to a double-dip, it does point to a period of continuing stagnation. There's nothing in these numbers to indicate that a period of strong growth is just around the corner.
The economy needs to create several hundred thousand jobs per month in order to provide employment for new workers entering the job market due to population growth and to reemploy workers who have lost their jobs during the recession. And even at that rate it will be years before we return to full employment. Simply treading water, as we did last month, isn't good enough.
In the interim, it's important that we do as much as we can to provide employment. That's why it's so distressing to see that government employment "continued to trend down." As the report notes, "Local government employment ... has fallen by 535,000 since September 2008," and there have been losses at the federal level as well. Now is not the time to adjust the size of government, that's a task for better times. If anything, government should be helping to cure the unemployment problem not making it worse.
And by some measures, things are getting worse. The most comprehensive measure of the unemployment rate, which includes people who stopped looking for work and those taking part-time jobs, rose from 16.2 percent in October to 16.5 percent in September, another indication of the overall weakness in the labor market. Thus, although some analysts are highlighting the fact that the report is better than expected, that's relative to very poor expectations -- it's like being happy you only lost $150 instead of $200. Yes, it's better than many thought it would be, but still not very good -- we are still moving mostly sideways.
This report shows that our troubles are far from over, and it highlights the need for a jobs program as soon as possible.
