Friday, May 7, 2010

Unemployment Rises To 9.9%, But There's Good News...

The latest unemployment numbers just dropped, and, well, they're a mixed bag.
Employers added significantly more jobs to payrolls in April, according to a government report, another sign the recovery in the U.S. economy is taking hold.

There was a gain of 290,000 jobs in the month, up from a revised 230,000 jobs added in March. It was the largest number of jobs added to the labor force since March 2006.With revisions in March and February there has been a gain of 573,000 jobs since the start of the year.

Economists surveyed by had forecast a gain of 187,000 jobs.

The report also includes a separate survey of households that it uses to estimate the unemployment rate, which increased to 9.9%. Economists had forecast the rate would remain at the 9.7% rate reported for March.

The increase was due to people who had left the job market reentering the work force to look for jobs. They had not been counted as unemployed in earlier reports.

The job picture got a lift from the addition of 66,000 jobs by the U.S. Census Bureau, which is in the process of completing the once-in-a-decade headcount of the U.S. population.

But the gains went far beyond that one-time Census boost, as private sector employers added 231,000 jobs.
You can look at this a number of ways.

1) It's definitely not good psychologically to hear the unemployment rate rising. Like it or not, more folks are going to pay attention to that number, as opposed to the details themselves. This is reasonable, because unemployment rates are a key metric on which the state of the economy is judged. It would definitely have been better for our national psyche had that number dropped.

2) No matter how you spin it, more Americans going back to work is always a good thing. You can't have a recovery without jobs, and now, we've had four straight months of job growth, and 5 of the past 6 overall have seen more Americans getting jobs than losing. And yes, the "true unemployment" number is much higher than 9.9%, but that's always the case. It was true before the recession (when true unemployment was around 11%) and is true now. But it doesn't obscure the fact that jobs are being added, not lost.

3) The growth of private sector jobs also is a good sign. Sure, there were some seasonal Census gigs that put folks back to work, but 231k of those jobs aren't gov't dependent. For anyone saying the Obama Administration is somehow "stifling free market capitalism", need I remind you that we were routinely losing nearly 800k jobs/month when Obama took office.

4) Job numbers always lag behind other economic indicators. Any perusal of the business section will show you positive economic numbers across the board. The Dow's up, housing sales are growing, the GDP's been up for 3 quarters. This has been the case for months now, but it's good to finally see the job numbers catching up.

5) 8% Unemployment might be the new norm. Let's face it: many of the jobs that have gone away in manufacturing, auto, and other sectors just aren't ever coming back. Period. I've yet to comprehend the plan for this whole "green jobs" initiative, or how soon it'll start creating jobs either. People who've been out of jobs are going to need to learn new skills to make themselves marketable.

6) The GOP is already throwing water on the fire. You'd think nearly 300,000 people going back to work would be a good thing, but of course the GOP needs to spin it as somehow being bad, because they want the opportunity to ruin the the economy yet again come this Fall.
House Republican Whip Eric Cantor said it's always a good thing to see positive gains, but Washington's spending could make it impossible to sustain growth.

"Out-of-control spending in Washington has produced a Mount Everest of debt that we are asking future generations to climb. Even if the economy added 250,000 jobs every month, it would take nearly five years to get back to full employment. Five years is too long," Cantor said.

Cantor argued that a massive health care program instituted by the federal government will make it more difficult for employers to increase hires.
Eric Cantor, please go play in traffic.

Question: What's your read on this jobs report, and the economy as a whole? Does President Obama deserve any credit for this rebound, or is it purely cyclical/luck?

April Jobs report: Best gain in four years [CNN]

blog comments powered by Disqus

Post a Comment

Note: Only a member of this blog may post a comment.