Jobs Report: Sunny With a Chance of Setback
Unemployment Fell, but Remains High
The Labor Department reported on Friday that the unemployment rate fell to 8.3 percent in January from a high of 10 percent in late 2009, but unemployment still “remains higher than it has been for any presidential election since the Great Depression,” The New York Times reported.
Encouraging, but a Long Way to Go
“This report is encouraging, but it still underscores how far a distance we have to go and how many people are still long-term unemployed and disconnected from the workforce,” Harvard economist Lawrence Katz told The Huffington Post. “Even if we were willing to say that the scars of the great recession mean a couple of million people drop out permanently, we still have many years to go before we get back to where we were.”
Don’t Expect ‘Full Employment Until 2012
More precisely, the year began with fewer workers employed than in January 2001, said economist Paul Krugman at The New York Times. “At January’s pace of job creation it would take us until 2019 to return to full employment,” said Krugman.
Private Sector Remains Engine of Growth
“The private sector remained the engine of growth,” according to The Times. “While federal agencies and local governments continued to lay off workers, businesses added 257,000 net new jobs in January. The biggest gains were in manufacturing, professional and business services, and leisure and hospitality.”
Companies Looking to the Future
“The past several recent jobs reports seem to indicate that private companies are beginning to look toward the future and consider hiring,” Brian Hamilton, CEO of financial information company Sageworks Inc. told Forbes. “We don’t know if the positive jobs trend will continue, but it is definitely a good trend,” he said.
Politicians Disagree on Interpretation
Republicans “downplayed” the report, “describing the improvements as welcome but ‘anemic,’” Fox News reported. “The White House, meanwhile, cited the report as ‘encouraging’ evidence that the economy is on the upswing, and urged Congress to support jobs measures backed by President Obama to keep that trend going.”
It’s All Good
“The strangest thing about January’s jobs report is that it’s pretty much all good,” said Ezra Klein at The Washington Post. “The bottom line is that this isn’t just a good jobs report. It’s a recovery jobs report.”
Austery Measures Will Backfire
Krugman warned however that renewed calls for federal austerity measures would backfire. “The sad truth is that the good jobs numbers have definitely made it less likely that the Fed will take the expansionary action it should. So here’s what needs to be said about the latest numbers: yes, we’re doing a bit better, but no, things are not O.K. — not remotely O.K. This is still a terrible economy, and policy makers should be doing much more than they are to make it better,” said Krugman.
What do you think?
Is there reason to be optimistic about the economy?