A bleak jobs report raises doubts on the recovery

What happened

The nation’s unemployment rate officially passed the symbolically significant 10 percent mark last week, hitting a 26-year high and raising widespread concerns about a “jobless recovery.” With 558,000 jobs lost in October, the unemployment rate rose from 9.8 percent to 10.2 percent. At the same time, a broader measure of unemployment—one that includes people who have given up looking for work or who have settled for part-time jobs—jumped half a percentage point to 17.5 percent, or one in six workers. The worse-than-expected numbers raised new doubts that the economy, which grew 3.5 percent in the third quarter, could continue to expand. Many economists now predict that unemployment will climb even higher before trending downward sometime next year. “We are in for a long slog,” said Richard Fisher, president of the Federal Reserve Bank of Dallas.

President Obama, signing a bill to extend unemployment benefits, said he is seeking new ways to stimulate hiring. “History tells us that job growth always lags behind economic growth,” he said, “which is why we have to continue to pursue measures that will create new jobs.” The administration is mulling several initiatives, including new highway spending and tax credits for weatherizing houses. But Republicans called on the administration to abandon its strategy of trying to create jobs through deficit spending. “More debt, more spending clearly has not worked—particularly in a time of double-digit unemployment,” said Senate Republican leader Mitch McConnell.

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What the editorials said

The president claims that his stimulus programs have saved or created more than 640,000 jobs, said The Washington Times. But he never mentions the jobs destroyed by his policies of taxing, borrowing, and spending. “Jobs created by government come at the expense of jobs lost when government takes wealth from one part of the economy and moves it to another.” Yet the Democrats insist that the solution is to spend more, said The Wall Street Journal. Really? “Maybe if Congress spends another $787 billion in the name of job creation, it can get the jobless rate up to 12 percent or 13 percent.”

As “dreadful” as the unemployment figures are, they’d be even worse without stimulus spending, said The New York Times. With employers still unwilling to hire, government spending is “exactly what the country needs” to put Americans back to work. One top priority must be a jobs program for teenagers, whose unemployment rate stands at a record 27.6 percent. Without experience and training now, they “may never get the chance to acquire needed skills, permanently hobbling their earnings potential.”

What the columnists said

Worried about their own employment prospects, “politicians in Washington are desperate to show that they’re doing something about jobs,” said Steven Pearlstein in The Washington Post. But even massive government spending can replace only “a fraction of the nearly 7.5 million jobs” that have been lost to the recession. The private sector has to pick up the slack, and that will take time. Politicians don’t like hearing this, but “there is no way to avoid an extended period of uncomfortably slow growth with uncomfortably high unemployment.”

That’s the worst possible news for Democrats, said John Nichols in The Nation. Obama’s agenda depends on the presence of comfortable Democratic majorities in the House and Senate. “If unemployment continues to rise, it will be the only issue in key congressional districts and states across the country” in the 2010 midterm elections. Unless Democrats push ambitious infrastructure projects and “a radical alteration in trade policies” to boost exports, they risk allowing Republicans to “position themselves as pro-jobs populists.”

But for Democrats, said Jim Kuhnhenn in the Associated Press, there’s no avoiding a harsh political fact: Obama has now “taken ownership of the economy.” More than nine months into his administration and having gotten everything he’s asked for from Congress, it will be “increasingly difficult to blame the sour economy on George W. Bush.” The White House has been warning for a while now that jobs will be slow to come back. Still, there is no escaping “the political shock waves” when unemployment tops 10 percent.