Friday, February 05, 2010

The Good, the Bad and the Ugly

This morning, the Department of Labor released its unemployment report for January showing the unemployment rate improved slightly. The rate may have dropped, but the economy is still not producing a net gain in jobs. So, while a step in the right direction, these numbers are nothing to beat our chest about. There is far more to do. House has already passed a job creation bill and the Senate is debating additional measures. That too is progress. Here are a few press clips that have come across my desk in the last few days:
  • According to today’s report from the Department of Labor, the unemployment rate for January was 9.7%, a slight improvement over December’s rate of 10%. And while the country lost 20,000 jobs in January, “aside from November's gain, January's job losses were the smallest since the recession began.” Today’s report included other indications that America continues on a path to economic recovery: “The report included more good news from the manufacturing sector, which is a key factor in the recovery. Manufacturers gained 11,000 jobs, its largest increase since April 2006. Retailers added 42,100 jobs, the most since November 2007, before the recession began. Temporary help services gained 52,000 jobs, the fourth month of gains in that category. That could signal future hiring, as employers usually hire temp workers before permanent ones.” [Associated Press, 2/5/2010]
  • President Obama announced plans for a new program to encourage small business lending, another important step in efforts to help businesses create jobs. “The administration's proposal would invest $30 billion from the government's Troubled Asset Relief Program in community banks to encourage them to lend to small businesses.... The lending program is part of a broad package of jobs-growth proposals that Congress will consider in coming days.” [Wall Street Journal, 2/3/2010]
  • A manufacturing report from the Institute for Supply Management indicates the U.S. economy is recovering: “a new survey showed that banks have stopped making it tougher for consumers and businesses to borrow, and manufacturing activity climbed to its highest levels in five years…. With manufacturing activity at its highest point since August 2004 and continued month-to-month gains, the sector's recovery appears more sustainable than many economists predicted just a few months ago. That bodes well for the overall economy.” [Wall Street Journal, 2/2/2010]
  • A report released by the Recovery Accountability and Transparency Board indicates that the Recovery Act created 600,000 jobs in the last 3 months of 2009, “a figure in line with the administration's goals for job creation through the end of 2010.” [Washington Post, 2/1/10; White House, 1/6/10]
So the good news is that unemployment fell and temporary employment increased, which is a good sign for future job growth. This slowing of labor market losses, combined with last week’s positive GDP figures, all point to an economy that is beginning to recover. That’s the good news.
The bad news is that 20,000 jobs were still lost last month.

And the downright ugly news is that the deepest part of this recession, was even deeper than analysts thought. The reports show that the economy lost over 1 million more jobs during the recession than previously estimated. Over 14 million Americans are out of work, there are six job seekers for every available job, and 4 in 10 unemployed workers have been searching for a new job for at least six months.