Unemployment Rises to 7.9%
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The Bureau of Labor Statistics announced that in October, 171,000 jobs were created, and the unemployement rate rose to 7.9%. Since we’re only four days away from Election Day, it’s important to step back from the politics and take a deep breath. The U.S. Chamber of Commerce’s Chief Economist Martin Regalia puts today’s numbers in context [emphasis mine]:
The 171,000 net new jobs created last month were unanticipated, but we shouldn’t be fooled by this number. The pace of our economic recovery remains far too slow to reemploy the millions who remain unemployed or underemployed. The number of discouraged workers rose, and for people remaining in the workforce average hourly earnings went down. This rate of job growth will not drive the economy forward or put more Americans back to work.
To reinforce the point about the jobs recovery being too slow, here’s Jim Pethokoukis at the American Enterprise Institute previewing the job numbers yesterday:
But keep in mind that job gains of 125,000 or 150,000 or even 175,000 do little if nothing to close the 13 million job gap between where employment should be and where it is. We are only getting trend jobs growth, just enough to deal with population growth –but not enough to close the yawning chasm.
What happens after the election will play a major role in the direction of job growth and the economy. Here is Regalia on what Washington should do:
Congress should act now to address the fiscal cliff, as we are already seeing uncertainty over the potential looming tax increases depress economic activity. Congress should also work to address our long-term fiscal problems through tax and entitlement reform, and by getting our debt and deficits under control.
For further perspective on the job numbers, here’s what other economic analysts are saying:
- Douglas Holtz-Eakin, American Action Forum, delivers a backhanded compliment, “The report is a solid base hit – not a home run – in a game where the U.S. is over 20 million runs behind."
- John E. Silvia of Wells Fargo Securities calls the trend “subpar.”
- Paul Ashworth of Capital Economics says the “labor market remains unusually weak.”