The monthly unemployment figures seem to have shaken many economists and analysts, but really, it simply looks like more evidence that we are entering into a lost decade. Merry Christmas.
Job growth, while positive, was worse than anemic. Adding just 39,000 jobs per month (net) isn’t anywhere close to the 120,000 needed to keep unemployment from rising or the 300,000 needed to push unemployment down. While rising unemployment rates in a recovery aren’t that unusual, the trajectory of job creation should be up — significantly. And it’s not. That, or the trend in the numbers is simply more transparent now that the distortions from misguided government spending are beginning to wane.
The pull-back in November likely reflects many firms bringing laid-off workers back on line. But these same employers aren’t ready to take the risk of putting more people on the permanent payroll yet. They still don’t trust the long-term commitment of consumer demand. Plus, too much uncertainty — over tax policy, deficits, and regulation — is wreaking havoc on the private sector. It doesn’t help that current White House seems intent on pushing through policies that punish wealth creation by capping personal and disposable income for high earners.
If we ever needed a commitment to aggressive pro-growth policies with teeth, we need it now.
— Samuel R. Staley is Robert W. Galvin Fellow and Director of Urban & Land Use Policy at the Reason Foundation.