The U.S. economy just can’t manage to turn the corner on job growth.
Yes, the data on non-farm payrolls released this morning by the Bureau of Labor Statistics shows continued growth in employment. But that growth continues to be very slow. Disappointingly slow. And the data also indicates that the U.S. has a huge problem as the percentage of the unemployed who count as long-term unemployed continues to climb.
For December the U.S. added 103,000 jobs. That was well short of the 150,000 new jobs that economists surveyed by Briefing.com had expected for the month. Take away the 10,000 jobs lost in the government sector and the country added 113,000 private sector jobs.
The disappointment was tempered by revisions to the data for October and November that raised the number of new jobs created in those months to 71,000 in November from 39,000 and to 210,000 in October from 172,000.
The official unemployment rate fell to 9.4% from 9.8%. But that wasn’t quite the great news that it seems. Most of the drop was a result of lower participation in the workforce. The percentage of population in the workforce fell to 64.3% in December from 64.5% in November.
One of the most troubling aspects of the December numbers is the rise in the percentage of the unemployed who have been out of work for 27 weeks or longer to 44.3% from 42.2% in November. Economic research indicates that the longer someone is out of work, the harder it becomes to find a job as the time unemployed creates a mismatch between a worker’s pre-unemployment skills and those demanded by the current economy.
The rising percentage of long-term unemployed indicates just how long high unemployment is likely to be with us and how hard it will be to reduce the unemployment rate.
And, of course, when we’re talking about the unemployment rate we should look at the full unemployment rate. The official rate—now at 9.4%–doesn’t include discouraged workers who have dropped out of the workforce or workers with part-time jobs who would like full-time work. The full unemployment rate that includes those workers came in at 16.7% for December. That was down from 17% in November.