December, 04 2009, 09:06am EDT
For Immediate Release
Contact:
Michelle Bazie,202-408-1080,bazie@cbpp.org
Statement: Chad Stone, Chief Economist, on the November Employment Report
Today's report that the pace of job losses has dramatically abated
is the most encouraging in a long time, but serious problems remain for
unemployed job-seekers. The number of people who have been unemployed
for 27 weeks or more continued to climb in November, and these
long-term unemployed now are nearly 40 percent of total unemployment
(see chart).
WASHINGTON
Today's report that the pace of job losses has dramatically abated
is the most encouraging in a long time, but serious problems remain for
unemployed job-seekers. The number of people who have been unemployed
for 27 weeks or more continued to climb in November, and these
long-term unemployed now are nearly 40 percent of total unemployment
(see chart). Renewing the temporary assistance for unemployed workers
scheduled to expire in less than a month and providing additional
federal fiscal assistance to states remain at the top of the list of
measures that policymakers should take to help jobless workers and
speed the economic recovery.
Unemployed
workers typically run out of regular unemployment insurance (UI)
benefits after 26 weeks. In normal times, a high percentage of the
unemployed find a job before exhausting those benefits -- but not when
the economy is in a deep hole and barely beginning to climb out of it.
The
pace of job losses due to layoffs and business closings is abating, the
recent evidence suggests. But a labor market recovery that puts
unemployed workers back to work requires faster growth in demand and a
much greater pace of new hires than is yet evident. The economy must
also overcome a significant barrier: the drag on growth and job
creation from further state budget tightening. We estimate that without
additional federal assistance, state actions to close their projected
budget deficits could cost the economy 900,000 jobs next year.
The
temporary additional weeks of benefits and other assistance for
unemployed workers in the recovery legislation that the Administration
and Congress enacted earlier this year have not only helped relieve the
hardship faced by the long-term unemployed and their families, but they
have also provided a boost to economic activity and job creation.
Extending these measures into 2010 should be a "no-brainer" for
policymakers: helping unemployed workers isn't an alternative to
preserving and creating jobs; it's one of the most effective ways to
preserve and create jobs. The same is true for state fiscal relief.
These measures consistently rank very high in economists' assessments
of bang-for-the-buck impact in boosting demand and creating jobs.
About the November Jobs Report
The
headline numbers on unemployment and payroll employment in today's jobs
report are encouraging, while some of the details in the report remain
troubling.
- Private and government payrolls combined
shrank by just 11,000 jobs in November and earlier estimates of losses
in September and October were revised down sharply. Nevertheless,
payroll employment has declined for 23 straight months and net job
losses since the recession began in December 2007 total 7.2 million.
(Private sector payrolls have shrunk by 7.3 million jobs over the
period.) Each February, the Labor Department's Bureau of Labor
Statistics issues revisions to its payroll employment statistics based
on more complete information, and preliminary estimates indicate these
revisions could add about another 800,000 job losses to these figures. - The
pace of job losses has slowed markedly -- to an average of just 104,000
per month over the past three months, compared with 645,000 jobs per
month lost over the November 2008 to April 2009 period. - The
unemployment rate, which was 4.9 percent at the start of the recession,
stood at 10.0 percent in November, down from 10.2 percent in October.
Potential job-seekers remained on the sideline, however, as labor force
participation edged down to 65.0 percent. It has not been lower since
January 1986. - The decline in labor force participation
was offset by higher household employment, and the percentage of the
population with a job was unchanged at 58.5 percent, its lowest level
since October 1983. - 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 -- edged down
to 17.2 percent in November. That figure is 8.5 percentage points
higher than when the recession began, and with the exception of last
month is the highest on record in data that go back to 1994. - Nearly
two-fifths (38.3 percent) of the 15.4 million people who are unemployed
have been looking for work for 27 weeks or longer. That's the highest
percentage on record in data going back to 1948. Regular unemployment
insurance benefits typically run out after 26 weeks.
The Center on Budget and Policy Priorities is one of the nation's premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.
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