Per the Bureau of Labor Statistics, we find that the US added a paltry 74,000 jobs in December (I’m assuming that’s seasonally adjusted and doesn’t include people hired for holiday retail). And yet despite that, the Unemployment rate fell to 6.7%. Huzzah!Praise be to Obama! Praise be to the fiscally responsible Republicans who refused to extend unemployment insurance, leaving 1.3 million families getting longterm benefits in the lurch!
Can we all agree that the gaming of unemployment stats has to end? The unemployment rate did not fall .3% because 440,000 people found jobs last month. It fell because the government decided to stop counting them as unemployed. There were some eight million jobs lost in the opening months of the Great Recession, and we haven’t come anywhere close to replacing them (most of our employment ‘growth’ since 2008 has come from keeping job growth consistent with monthly population growth of around 125,000-150,000). Toward the end of last year there were three or four months when employment edged up by 200,000 to 200,100. That’s great, but in order to clear out the backlog of unemployed we’d need about 115 months of such growth. And it’s pallid in comparison with the Clinton years, when some months had 300,000 new jobs and employers were having trouble hiring new employees.
As I blogged earlier in the week, the Repubs in the House and Senate know that cutting off longterm benefits has hurt them in polls. They’ve brought in PR experts to help them with talking points and photo ops that make them look ‘compassionate’ even after they threw 1.3 million American families under the bus. But the Dems aren’t helping by keeping up the talking points about the unemployment rate going down. Unemployment isn’t going down because of recovery; it’s going down because we’ve decided not to count a lot of unemployed people. If you count all the folks who are jobless or underemployed, we’re probably looking at something closer to 23% unemployment/underemployment. Paul Craig Roberts calls it the case of the missing recovery.
Hint to both sides–those 1.3 million unemployed who were just given the heave-ho were putting all that money back into the economy–at an average of $200 a week UI, that’s 2.6 BILLION in spending that isn’t happening at a time when one of the big problems in the economy is lack of consumer spending. Just saying.