Unemployment Edges Up to 7.9 Percent as Economy Adds 157,000 Jobs

Friday, 01 February 2013
By Dean Baker, Center for Economic and Policy Research | Report

Fiscal cliff concerns appear to have no impact whatsoever on hiring.

The (U-3) unemployment rate edged up slightly to 7.9 percent in January as the economy added 157,000 jobs in the month. The unemployment rate has essentially been unchanged the last five months. The January job growth was pretty much in line with expectations, but growth for the prior two months was revised up by 127,000. This brings the average rate of job growth over the last three months to 200,000, considerably better than the average of 168,000 over the last year.

There were few noteworthy changes in the household data. There was a 0.4 percentage point rise in the unemployment rate for white men to 6.6 percent due to an influx of people looking for work. This could be a sign of the unemployed being more optimistic about their job prospects, but it may also just be an erratic fluctuation in the data. The participation rate for white men had fallen by 0.2 percentage points from October to December. The employment-population ratio for workers with just a high school degree fell by 0.3 percentage points to 54.0 percent, a new low for the downturn.

All the duration measures of unemployment fell sharply in January. The average duration of unemployment spells fell by 2.8 weeks, the largest drop ever. The median duration fell by 2 weeks and the share of long-term unemployed fell by 1.0 percentage points. This decline undoubtedly reflects the shortening of the period of extended benefits after the fiscal cliff deal. Since workers are required to look for jobs to get benefits, it appears that many of the unemployed stopped looking for work when their benefits expired and therefore are no longer counted as unemployed.

With the upward revisions to the November and December data, the picture in the establishment survey looks somewhat brighter. However, it is likely that these numbers are at least somewhat inflated due to unusually warm weather. There was a similar story last year with the winter months showing relatively good job growth. The result was that hiring was moved forward and the spring months then looked exceptionally weak. We may see the same story this year.

Retail trade, construction, and health care were the big job gainers in December, adding 32,000, 28,000, and 22,000 jobs, respectively. Retail has added an average of 37,000 jobs a month over the last three months. Health care has added an average of 31,000 jobs over this period.

Construction has added an average of 27,000 jobs a months since October. This rise is also in part attributable to unusually warm weather as well as repairs after Hurricane Sandy. However it may also be partly attributable to the bounce back in housing construction.

It is worth noting the divergence in construction employment as measured in the household survey and jobs as measured in the establishment survey. The former rose considerably more during the boom in the last decade and fell somewhat more in the downturn. This likely reflects undocumented workers in the industry who are likely working off the books.

Other sectors generally showed weak growth in January. Manufacturing added just 4,000 jobs. With downward revisions to the prior month’s data (the December report showed manufacturing adding 25,000 jobs), job growth in the sector has averaged just 6,000 since October. Temp sector employment fell by 8,000, almost completely reversing the gain in December. Restaurant employment rose by 17,000, roughly in line with its growth over the prior two months.

Government employment edged down by 9,000, roughly the same as its pace over the last year. Average weekly hours were unchanged in January, while average hours for production workers were down by 0.1 hours. Compared with year-ago levels, average hours for production workers are down by 0.2 hours, while average hours for all workers are down by 0.1 hour. Average hourly wage growth has picked up somewhat recently, rising at a 2.7 percent annual rate over the last three months. However, the data are sufficiently erratic, so this could be an aberration.

This report shows a picture of an economy that is growing slightly more rapidly than its potential. While this growth pace is consistent with modest declines in unemployment, that may not be true when the effects of deficit reduction are felt.

Obama’s Jobs Bill and Other Fictions

Another Neoliberal Hoax

by ROB URIE

 

 

Several seemingly well meaning pundits have asked: if Occupy Wall Street wants jobs, why don’t they come out and support President Obama’s jobs bill? Answering only for myself, the better question is: why doesn’t Obama support his own jobs bill? The White House is claiming that it needs sixty votes to pass the jobs bill in the Senate to overcome a threatened filibuster by Republicans. Maybe, but are these the same Republicans who just passed his toxic free-trade agreement with South Korea, Panama and Colombia with bipartisan support from Democrats? Why yes they are.

At this point in history, the evidence is in that these free trade agreements are a neo-liberal hoax to transfer jobs from the U.S. to low wage countries. Anyone who cares to can view the facts for themselves in the government statistics—the decline in U.S. manufacturing jobs has a very high correlation with the advent and implementation of free-trade agreements. Not only have manufacturing jobs been in absolute decline for more than a decade, the Participation Rate, the percentage of the working age population that is employed has been declining with it. As for the purported benefits of so-called free trade, where are they?

So Obama is willing to go to the mat with Republicans to send U.S. jobs elsewhere with a free-trade agreement but he is making only a symbolic effort to pass his weak, pathetic three-and-one-half-years late jobs bill because he needs more votes than George W. Bush ever needed to get his legislation passed?

But what has Obama accomplished with his jobs bill? The panel of pundits on a recent NPR roundtable agreed that he has gotten his poll numbers up on “who cares more about the economy, the president or congressional Republicans” by a full ten points. That is, Obama got what he wanted, an increase in his poll numbers, by creating the appearance of trying to create jobs without creating any jobs. And he did this while destroying jobs in the U.S. with a free trade agreement passed by the same Republicans he claims are holding his jobs bill hostage.

So, support Obama’s jobs bill? Thanks anyway, but Barack Obama and the dysfunctional political system that he represents is the problem. Getting cynical opportunists like him out of public office is the priority, not forever playing the patsy to his misdirections.

The “Real” Long-term Unemployment Report.

Unemployed 99er Population Rises Dramatically in March

by Layofflist.org

 

The March Employment Report was again pumped as another victory in the war against unemployment. But for millions of long-term unemployed, it’s still a brutal battle to find work. That’s why it’s unfortunate that most main stream media outlets and politicos seem incapable of understanding, or chose to ignore the “real” unemployment numbers.

The BLS reported that unemployment (U3) for March was 8.8%, which is a slight improvement from February’s 8.9%. 216,000 jobs were created, but that’s a relatively small monthly number of jobs for what is supposedly a strong economic recovery from the Great Recession. In comparison, during the 2004 economic recovery, 338,000 jobs were created in March.

The Obama administration and media mouthpieces seem preoccupied with the U3, 8.8% measure of unemployment, but you need to dig into the numbers to reveal the “real” state of unemployment.

A disconnected news media conveniently forgets to mention that the US needs to create about 125,000 jobs a month to simply keep up with new entrants to the workforce. If you subtract 125,000 from 216,000 jobs created in March, you end up with 91,000 “extra” jobs for 13.5 million unemployed.

Underemployment remained quite high at 15.7%, or 11 million workers who want full-time work, but are forced to work part-time jobs of 34 hours a week or less. Yes, full-time work is considered 35 hours or more per week, although many “real world” workers consider jobs of less than 40 hours a week as part-time.

But what was most striking about the March jobs report was the continuing increase in the number of long-term unemployed. According to the BLS, March showed 1,899,000 workers who have been out of work for 99 weeks or more, an increase of 127,000 from February. The real 99er population is growing quickly and shows no signs of abating.

NELP estimates (PDF) that “throughout 2010, 3.9 million unemployed workers exhausted all of their unemployment benefits without finding new work.” Exhausting unemployment benefits also includes those unemployed that exhausted benefits after 60, 73, 79, or 93 weeks, so NELP’s estimate is larger than the BLS estimate for those out of work 99 weeks or more.

Not only are more unemployed out of work 99 weeks or longer, but those out of work 52 and 27 weeks or more are increasing as well. Those out of work 27 weeks or more now accounts for a record 45.5% (6.14 million) of all unemployed, while for those out of work 52 weeks or more the rate is 31.5% (4.25 million) of all unemployed; again a record high.

The participation rate is another employment issue rarely discussed on the national media stage. According to the BLS, “the participation rate is the share of the population 16 years and older working or seeking work.”

The labor force participation rate was unchanged, 64.2%, the same as the previous two months. This is the lowest labor participation rate since March 1984.

The March Employment Report showed some job gains, but not nearly enough jobs were created to put a dent in the long-term unemployment problem. Media talking heads and politicians looking for 2012 votes touted the March jobs report as a winner, but it was a loser for millions of increasingly desperate long-term unemployed who are struggling without jobs or unemployment benefits. Let’s not hang those “Mission Accomplished” banners just yet…