Unemployment Rate Down, But Only 36,000 Jobs Createdby James Parks, Feb 4, 2011 |
Punxsutawney Phil may have predicted an early Spring on Groundhog Day, but the thaw in the jobs market is still far away. The U.S. Labor Department reported today that the country created only 36,000 jobs in January–not nearly enough to keep up with the growth in the workforce.
The unemployment rate fell to 9.0 percent, down from 9.4 percent in December and 9.8 percent in November. Much of the decline in the jobless rate may be due to an increase of 500,000 people who gave up looking for jobs last month.
Although two months of lower unemloyment is welcome news, the economy is not creating jobs fast enough to keep up with population growth or to accomodate those who have dropped out of the job market. Creating more jobs will require major investments in job creation by investing in infrastructure, education and innovation to build what we need for the future and create good jobs now.
AFL-CIO President Richard Trumka said
It is crucial that we ramp up efforts to create new jobs and ensure that the economic recovery can lift up America’s workers–and not just further enrich corporate CEOs and the super-rich.
The current jobs report underlines the absolute necessity of President Obama’s plan to invest now in infrastructure, education and innovation to build our future and create good jobs.
He urged Democrats and Republicans in Congress to follow the example of the AFL-CIO and the Chamber of Commerce who have joined together in support of the president’s plan to invest in America and create jobs.
According to the report, 13.9 million are officially jobless, down from 14.5 million last month. Records for long-term unemployment have been shattered by the recession. Last month, 43.8 percent of unemployed workers–some 6.2 million people–had been out of work for six months or longer. That’s down from 44.3 percent in December. Long-term unemployment has also disproportionately affected African American workers.
EPI economist Heidi Shierholz says today’s jobs report shows the labor market moving in two directions at the same time. Some of the lack of jobs growth can be chalked up to unusually cold weather in January and snowstorms in the Midwest and Northeast, she said. But it will take at least another month to see if the labor market is rebounding. .
Manufacturing added 49,000 jobs in January, continuing a welcome trend. Retail sales added 28,000 and health care gained 11,000 jobs. Construction jobs continued declining with 32,000 jobs lost last month.
The recession has left us with a shortfall of 11 million jobs needed to get us back to pre-recession unemployment rates. The nation lost 7.2 million jobs since the recession started in December 2007; it is also down the 3.7 million jobs needed over the last three years in order to match population growth (see chart above).
The economy needs to add about 150,000 new jobs each month to keep up with the growth in the labor force. But to lower the nation’s unemployment rate to 6 percent by 2013 and make up for the more than 7 million jobs lost due to the recession, the economy needs to add 350,000 jobs a month.
The jobless rate has been at 9 percent or more for the past 21 months—the longest it has been this high since World War II, according to the Economic Policy Institute (EPI). The underemployment rate, which includes unemployed workers, part-time workers who want full-time jobs and workers who have given up looking for work, is more than 16 percent.
African American and Hispanic workers have been particularly hard hit and have experienced higher unemployment and underemployment rates, as well as larger declines in real median incomes. The jobless rate for African Americans was 15.7 percent in January and 11.9 percent for Hispanics.
Few experts believe the jobless rate will dip below 6 percent before 2014; the latest projections from the Congressional Budget Office predict the unemployment rate might dip to just above 7 percent in that year.
Although it has not passed the peak rate of 10.8 percent it hit during some months in 1982, the current downturn has seen a larger and more sustained increase in the unemployment rate than at any other time since the Great Depression.
The outrageous truth behind the jobs crisis is that some in this nation—like Wall Street CEOs—are doing very well while millions struggle to make ends meet. Nearly three years into the economic recovery, some 43.6 million Americans—more than 14 percent—relied on food stamps in November to purchase groceries as high unemployment and stagnant wages crimped working family budgets.
Yet last year, “total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion ” at a time when the nation continues to struggle through one of the worst economic periods in its history. “Things are shifting back to where they were before,” said Robert Brown, a University of Denver law professor, about Wall Street pay before and after the recession.
