Beneath The Unemployment Number
President Obama and members of his administration were quick to herald the .4% drop in the December unemployment rate. Although this is slightly good news, the creation of 103,000 is paltry and does not point to a robust recovery. The majority of the new jobs came from the hospitality sector, which has a high turnover rate and low prospects for long-term employment. Many economists, including Federal Reserve Chairman, Ben Bernanke, believe that it will be a long time before the economy fully rebounds and the unemployment rate drops back to pre-Recession levels.
In a speech today, Mr. Obama pointed out that 2009 was the first year of positive private sector job growth since 2006. Although technically true, his statement failed to highlight just how dismal that growth was. According to an article in the New York Times:
“Left unsaid, though, was the fact that the job growth last year was not sufficient to keep pace with the growth in population in the United States, much less to restore the jobs lost during the recession. A measure called the real unemployment rate, which takes account of discouraged workers who have given up looking for work as well as those still actively seeking a job, stands at 16.7 percent.”
Although there were some hopeful economic signs, including an uptick in consumer spending, consumer demand is still too low to ignite the economy. With businesses sitting on nearly $2 trillion and still not hiring, it may be years before the economy fully recovers. With a divided government that is completely disinclined to initiate further stimulative measures, these economic doldrums seem to be here to stay.