The Cheery Jobs Report That Isn't: Outlook Still Dismal
The Center on Budget and Policy Priorities: Almost 24 million people are unemployed or underemployed.
Agencies are cheering a Labor Department report that showed a growth of 200,00 jobs in December.
The nation added 200,000 jobs in December in a burst of hiring that drove the unemployment rate to its lowest in almost three years. The figures raised hopes that the economy might finally be healthy enough to power an even stronger job market.
Alan B. Krueger, Chairman of the Council of Economic Advisers, stated:
Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression.
This statement may be of little comfort to the long-term unemployed. The report from the Bureau of Labor Statistics shows:
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.6 million and accounted for 42.5 percent of the unemployed.
The Center on Budget and Policy Priorities gave a sobering look at the jobs report:
..a strong jobs recovery remains elusive. The overall jobs deficit remains large, the labor force shrank for the second straight month, and the proportion of people aged 16 and over who have a job remains depressed. Jobs are still hard to find, especially for the long-term unemployed.
Economist Dean Baker remarks that the touted 200,000 figure is not an accurate number of the jobs created:
We created 42,200 courier jobs in December. Was there really a big surge in hiring in the courier industry? Well, the Bureau of Labor Statistics showed a surge of more than 50,000 new courier jobs last December, all of which were gone in January and then some. In other words, pull out our 42,000 courier jobs and we are looking at job growth of 158,000, not much to celebrate.
The Center on Budget and Policy Priorities further notes today:
- The recession and lack of job opportunities drove many people out of the labor force, and we have yet to see a sustained return to labor force participation (people aged 16 and over working or actively looking for work) that would mark a strong jobs recovery. That situation did not improve in December. The labor force shrank by 50,000 people in December after falling by 120,000 in November. The labor force participation rate remained 64.0 percent in December, which is lower than it was a year ago when the unemployment rate was nearly a full percentage point higher, and it remains at levels last seen in 1984.
- Finding a job remains very difficult. The Labor Department’s most comprehensive alternative unemployment rate measure — which includes people who want to work but are discouraged from looking and people working part time because they can’t find full-time jobs — was 15.2 percent in December, down from its all-time high of 17.4 percent in October 2009 in data that go back to 1994, but still 6.4 percentage points higher than at the start of the recession. By that measure, almost 24 million people are unemployed or underemployed.
- Long-term unemployment remains a significant concern. Over two-fifths (42.5 percent) of the 13.1 million people who are unemployed — 5.6 million people — have been looking for work for 27 weeks or longer. These long-term unemployed represent 3.6 percent of the labor force. Before this recession, the previous highs for these statistics over the past six decades were 26.0 percent and 2.6 percent, respectively, in June 1983.
As Baker bluntly notes today:
Coming out of a steep recession, we should be expected job growth in the 300k-400k monthly range. Unfortunately, there has been a huge effort to lower expectations so that we come to accept dismal economic performance as the best we can do.