There ’s good news and bad news. The new job numbers are out, and on the face of it, things look like they are getting better. Unemployment, they say, is down from 9.0 to 8.6. That’s good, right? But wait a minute. What do these numbers really mean? Let’s take a look.
So, the good news is that the unemployment rate fell 0.4% in November. There were fewer new applications for unemployment insurance benefits last month. But the bad news is that 315,000 jobless Americans quit looking for work last month, and some of the new jobs were seasonal hires for the pre-Christmas retail season.
According to the US Bureau of Labor Statistics, which compiles these figures, non-farm payroll employment rose by only 120,000 workers, 5,000 less than expected and, relative to the population and the pre-Christmas season, a very small number indeed.
Let’s break it down: Employment was up in the retail trade which added about 50,000 jobs (more than half of which were at clothing and accessory stores), the leisure and hospitality industry which added 22,000 jobs (primarily at restaurants), professional and business services, and health care, while the public sector cut 20,000 jobs in November.
All together, the growth of 140,000 jobs in the private sector was slightly below the 150,000 expected, and the loss of 315,000 from the employee pool in one month is a very large drop in the labor-force participation rate. (This rate is calculated by subtracting the number of unemployed persons, now estimated at 13.3 million, from the sum of the unemployed and employed, which was down by 594,000 in November.)
The employment trends since 1948, represented in the following chart, show an alarming sustained increase in our unemployment rates.
The real unemployment rate is not limited to those applying for unemployment benefits, but also includes those who have run out of benefits, those who are underemployed or who can only find part-time work, recent graduates, those who have not yet entered the job market (recent high school and college graduates who have not been able to find work) and those who have just given up looking. This figure is not shown in the published rates, and a represents a significantly higher number of unemployed American
Job creation is the most urgent economic need facing America today, but according to the Economic Policy Institute it will take the creation of 11.2 million new jobs to bring America back to the pre-recession levels of unemployment. The addition of 120,000 jobs in November is therefore a drop in the proverbial bucket, that doesn’t begin to fill the needs of millions of unemployed and increasingly desperate Americans.
If Americans are going to understand the real story behind the numbers, the US Bureau of Labor Statistics needs to find a better way of delivering the real numbers, numbers that reflect the true story of the depth of America’s employment crisis.