From the Economist
TODAY, the Bureau of Labour Statistics released the last set of American employment numbers to come ahead of the November Congressional elections. ..
For the fourth month in a row, nonfarm payroll employment declined in September, by a total of 95,000 jobs. The unemployment rate held steady at 9.6%......
Private payrolls have grown by 863,000 since the beginning of the year. That's not rapid growth, but it is steady movement in the right direction. It's on the public side of the ledger that matters have been particularly ugly in recent months. In 2010, state governments have shed 38,000 jobs. At the local level the picture is worse still; 231,000 jobs have been cut from local governments in just the last 10 months.......
The number of people working part-time for economic reasons jumped in September, and nearly 10 million Americans now fall into that category. Partially as a result, the statistic known as U-6, considered a more complete indicator of un- and under-employment, rose from 16.7% in August to 17.1% in September....
And Democrats may come to regret their eager embrace, this spring, of deficit-cutting rhetoric. Then, as now, the trouble in labour markets should have been the primary focus. With these figures sure to feature in Republican stump speeches for the next three weeks, those up for re-election will pay for their mistake.From Dave Cohen
How bad are things? Here are the key findings of a Roosevelt Institute study called The Stagnating Labor Market—From Calculated Risk
- Although the unemployment number remains high, it isn’t a full picture of the terrible situation in the labor market. The population that is out of the labor force and no longer trying to find a job is steadily increasing, and the normal mechanisms for those people to reenter employment have collapsed.
- Starting at the beginning of 2009 it is now more likely that someone who is unemployed will drop out of the labor force than find a job. This is a new problem for our economy, as this hasn’t happened as far back as data can be found (1967). These workers need targeted intervention before they become completely lost to the normal labor market.
- Underemployment, or those employed working part-time for economic reasons, has increased greatly, often more than doubling. This is across all analyzed sectors and occupations and is negatively correlated with capacity underutilization. The underemployed have the skills to work the jobs they have and their incentives aren’t distorted by unemployment insurance - they point to a story of a lack of aggregate demand.
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