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.
creativkev:
Thanks for your thoughts and wished for the new unemployment extension. However, with fudged numbers (leaving off the people that fell out of the system) my state is below the threshold for the extension and therefore no further benefits are availble.
In response to the comments on immigration, here’s an interstgin anecdote. A little ways frommwhere I live, there is a fruit farm. The farmer used to (try to) hire local teenagers to help out in the summer. It got harder and harder to find some to take the job, and even harder to get ones that would show up on time, not drunk or high.
Now he has itinerant workers come from Mexico (legally). They work hard and are quite happy to come back year after year.
So, how many jobs taken by immigrants are jobs that residents don’t want? Just wondering.
I heard somewhere yesterday that the Apple contractor (in China) employs 300K workers to build all-things-apple, whereas apple has a total employment of just 50K (out of which 25K are retail employees – contractors?). Paints a picture of what it means to send/outsource mfr overseas for the most successful tech company today.
Does anyone wonder about the statement about people giving up looking for work a d not counted towards unemployment? remember that this does not include early retirement or going back to school.
Maybe they just go into the bushes and start living off the land…..
As the Chinese communists keep telling us, trade deficits don’t matter.
Jim,
I expected a disappointment in today’s jobs number. Wall Street estimates got a little ahead of themselves in hoping for a good number in December. January’s number, released next month, will be the important one. If new corporate budgets for 2010 allow for increased hiring, January will be the first month that we should see a significant increase.
donzelion – “a few thousand immigrants here and there” is actually about a million a year. When there is massive American unemployment.
Uh, “go where the customer is” was assuming that the US consumer is not the customer in question. There’s only 300 million of us – it’s a pretty big world out there – and our companies are only able to compete by hiring foreign workers abroad (and doing so is the lifeline keeping most of our companies operational). A few thousand immigrants here and there is nothing compared to the tens of millions of Chinese workers in China with jobs we helped create for them over the last 10 years…
“Unless the big multinationals bring back the jobs we are doomed to suffer.” Not likely in a services economy. For our export of goods, maybe, but for everything else, you gotta go where the customer is. For most other country’s big multinationals, that means their own citizens go abroad – but the US taxes differently from everyone else, so that makes our employees 30-40% more expensive than a comparably qualified foreign worker by simple tax effects. Simple economics takes over from there…
I’m confused. So the decrease in the official unemployment rate is due to workers leaving the workforce. But the unofficial rate, which includes discouraged workers who have dropped out of the workforce, (the 16.7% rate) decreased also.
Doesn’t that imply that a large number of people left the workforce in some other manner than becoming discouraged? What happened to those workers? Did they retire early?
So – 100,000 jobs created and 100,000 LEGAL immigrants brought in – between exporting jobs and importing workers, what is going to happen?
Frank
The recently passed tax bill restored unemployment benefits for the long-term unemployed, so hopefully they now have some time to retrain themselves, look for a job, and persist in their job-hunting efforts, and meanwhile they’re able to get by without starving. That’s in theory how it should work. Hopefully reality is close.
Unless the big multinationals bring back the jobs we are doomed to suffer. Its a simple math problem, take IBM for instance. In 2000 they had around 300,000 US employees. Since then they have bought somewhere between 60 and 75 companies and yet their US employment stands at just a little over 120,000. The management of the company makes millions while laying off the middle class. I hope they like working in a 3rd world country because that is were we are heading. The current economical system is unsustainable, its time to wake up.