The jobs are still missing
The dearth of jobs clashes with more upbeat economic indicators, such as increased consumer spending, rising corporate profits, and a robust stock market.
Despite several positive signs that the economy is rebounding in earnest, a new jobs report indicates that employers are still not hiring. The economy only added 36,000 jobs in January, the Labor Department’s monthly report indicated last week, with the unemployment rate falling 0.4 percent, to 9.0 percent. Analysts had expected a gain of about 146,000 jobs. Construction trades shed 32,000 jobs as harsh weather in much of the U.S. halted many building projects, partially offsetting strong gains in manufacturing, which added 49,000 jobs. Economists generally agree that reducing unemployment significantly will require monthly jobs gains of about 200,000. The jobs report clashed with other, more upbeat indicators, including increased consumer spending, rising corporate profits, and a robust stock market. The Standard & Poor’s 500 stock index is up more than 5 percent in 2011. “The economy does seem to be gaining some momentum,” said Lynn Reaser, of the National Association for Business Economics.
“Is the glass half full or half empty?” asked Avi Salzman in Barron’s. The contrast between weak job creation and a dramatic drop in unemployment is jarring, but there’s an explanation. The Labor Department derives the job-creation number from a survey of employers. It calculates unemployment from a survey of households. The product of this mixed methodology says more about “the unreliability of job statistics than the actual employment situation.”
Wasn’t the recent extension of Bush-era tax cuts for the wealthy supposed to “open the flood gates in hiring”? asked Eliot Spitzer in Slate.com. Instead, “the promised jobs are nowhere to be seen,” while the budget deficit is exploding. It was no coincidence that the last time we enjoyed both a hiring boom and a budget surplus, it was preceded by Bill Clinton’s tax hikes on the wealthy.
This is a different era, said Irwin Stelzer in TheWeeklyStandardâ€‹.com. The latest employment report tells “a story of a semi-jobless recovery,” which “might well be more than a passing phenomenon.” Some industries “will never again need the number of workers they hired before the recession.” Those who lost jobs will have to sharpen their skills and reacquire “the habit of work.” In this tough new environment, the Obama administration’s “vague calls to improve education and job training” are coming up short.