So Much for Those 297K New Jobs

Today's report on jobs creation for December 2010 is out and the numbers are not particularly good. While Wednesday's report from ADP declaring that there were 297K new jobs in the private sector in December (discussed in yesterday's post here), today's report says there were a net new jobs of 103K for December with the "official" unemployment rate falling to 9.4% and the Un and Underemployed number at 16.7% (Table A-15 here). Of course, the economists were surprised at the figures reported.

Here's the NY Times on the jobs report:

Federal, state and local governments continued to shed jobs — cutting another 10,000 last month after trimming 8,000 in November, revised from 11,000 mostly on the local level. States and municipalities dealing with tighter budgets may be faced with further cuts as they try to shrink their deficits.

While the overall picture showed improving job growth, the additions in the private sector in December were not enough to significantly reduce the ranks of the unemployed or keep pace with people entering the work force. The outlook remains bleak for many workers. More than 14.5 million people were out of work in December.

Still, economists noted that the jobs data is a lagging indicator and pointed to other signs of a turnaround, though their outlook for 2011 remained varied.

My bold. Earth to economists: Apparently, the Great Recession officially ran from December 2007 to June 2009 per this report from NPR.

The National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., said the recession lasted 18 months. It started in December 2007 and ended in June 2009. Previously the longest postwar downturns were those in 1973-1975 and in 1981-1982. Both of those lasted 16 months.

The decision makes official what many economists have believed for some time, that the recession ended in the summer of 2009. The economy started growing again in the July-to-September quarter of 2009, after a record four straight quarters of declines. Thus, the April-to-June quarter of 2009 marked the last quarter when the economy was shrinking. At that time, it contracted just 0.7 percent, after suffering through much deeper declines. That factored into the NBER's decision to pinpoint the end of the recession in June.

Doncha think it's about time for the jobs creation to stop lagging and start creating some jobs for people who want to work and earn a living wage? We are now 18 months past the official end of the Great Recession which itself officially lasted 18 months. Yet we are still shedding roughly 400K plus jobs each week (based on the initial unemployment claims weekly report I discussed yesterday). The US economy needs to create 100k to 150k new jobs each month just to absorb new people entering the work force. Trumpeting that re-calculations show that October and November 2010 created 70K more jobs than initially reported just doesn't send too many warm fuzzies for the millions of people pounding the pavement looking for work.

McClatchy at least admits their confusion at today's numbers here:

As vexing as the lower reading was on hiring, no prominent economist predicted the steep drop in the jobless rate, measured by the Bureau of Labor Statistics. The sharp fall to 9.4 percent is believed to be due to seasonal factors and one-time anomalies, since the pace of job creation remains below the 150,000 per month needed just to break even with new entrants into the workforce.

My guess at the .4% drop in the U3 (Official unemployment) and .3% drop in the U6 (Un and Underemployment together) is that there are a lot of people who have given up completely, have now entered the ranks of the "self-employed" or for a lucky few, have managed to reach a point where they can file for Social Security benefits and try to hang on that way. All of this is "good news" only in the broadest, most forgiving perspective. There is still roughly 15% of the total population of the United States living in poverty and struggling just to survive.

This is not the American Exceptionalism to be proud of.

And because I can: