The Corner

Re: Good Signs of Growth in the Jobs Numbers

I appreciate the signs of growth cited by Bob Stein in his post but am not prepared to share his conclusion that good signs may be found in the jobs numbers.

Bob notes that the unemployment rate has ticked down to 9 percent (from 9.1),  in contrast to a year ago when the unemployment rate was 9.7 percent. But just this spring the unemployment rate was 8.8 percent. In fact, the unemployment rate has been impressively stagnant for going on three years now — and  for 28 of the last 30 months it’s been at 9 percent or higher. Moreover, the U-6 rate (generally speaking, the total unemployed as a percentage of the civilian workforce) is 16.2 percent and has been tracking consistently in the 16–17 percent range for the last year.

Not to put too fine a point on it, but that’s abysmal. A tenth of a percentage point drop in the unemployment rate is a hopeful sign only because the rate has been staggeringly high for so long. U.S. non-farm payroll employment remains more than 6.4 million below where it was before the 2008 recession and has been tracking at that level all year. Also keep in mind that employment stats are notoriously elastic. To get a general sense of how the job market is doing, it’s necessary to examine a variety of employment measures — and then track them for several periods, as the numbers are usually subject to revision.

Bob cites improvements in chain-store sales, luxury-store sales, rail-car loadings, hotel occupancy, and steel production as pointing to a growing economy. Perhaps these numbers herald better days ahead. But in terms of future job creation, those indices are probably more than offset by employers’ concerns about the potential impact of Obamacare, the European debt crisis, the supercommittee negotiations, and a host of other issues that generate uncertainty.


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