Today’s Jobs Report–Steady as She Goes, but She Needs to Go Faster

January 4th, 2013 at 2:12 pm

Today’s employment report shows steady employment growth, fast enough to keep the jobless rate from rising, but not fast enough to knock it down much.

December’s payrolls were up 155,000 and the unemployment rate held steady at 7.8%.  Factories and construction sites added jobs—25,000 and 30,000 respectively—an improvement over recent months.  On the other hand, the public sector shed another 13,000 jobs, driven exclusively by local governments, the continuation of a longer-term negative trend as localities struggle with budget constraints.

Hourly wages and average weekly hours got a bit of a bump up as well, so weekly earnings are up 2.4% over the past year.  Since inflation recently has been tracking at around 2%, that’s a slight gain in real pay (important, because starting this month, most workers will take a 2% hit to their paychecks due to the expiration of the payroll tax break, a casualty of the fiscal cliff deal).  There was also some evidence of more folks moving from part-time into full-time jobs.

The main, first-take point here is that this is a glass-half-full-glass-half-empty jobs report, and more broadly speaking, job market.  In the near term, market and political volatility over the recent fiscal craziness is not particularly evident in job market, which has been moving along at about a trend growth rate.  Uninspiring—and not fast enough to provide the opportunities we need, but steady and pretty resilient to everything from Congressional wound-infliction and hurricanes.

Over the longer term, say the last two years (2011 and 2012) employment averaged about 150,000 jobs a month, or 1.8 million jobs added in both those years.  That’s enough to slowly open up job opportunities for the unemployed and to absorb new labor force entrants.  But the key work is “slowly.”

The figure shows this steady-as-she-goes point by plotting year-over-year growth starting in 2009 (so the first data point is payroll levels in Dec2009- those in Dec2008).  You see job growth climbing out of the recession and settling into the current trend toward the end of 2011, where we’ve stayed since.

Historically, following a deep recession like the one we went through, you’d get months with much larger gains than we’ve seen, thus closing the jobs gap and bringing down the unemployment rate more quickly.  That hasn’t happened, in no small part because policy, which responded quickly and forcefully to the downturn, petered out too soon.  We prematurely pivoted to austerity—not European style, but still—and that’s hurt our ability to climb back faster.

Still, we’re growing at a steady pace and the last thing we’d want to do is screw around with the debt ceiling…right?…right??…anyone???…Bueller?

Source: BLS

 

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8 comments in reply to "Today’s Jobs Report–Steady as She Goes, but She Needs to Go Faster"

  1. R. Nemo says:

    Speaking of growth–I have a question for you jared. How can they talk of cutting Medicaid when the ACA has just increased payments to doctors–132% in Calif.–and is expanding eligibility paid 100 percent by the feds for the first few years?

    If your policy is to expans something why would you then negotiate that away? It makes no sense!


    • Jared Bernstein says:

      That’s more about expanded coverage from the Affordable Care Act–the key re fiscal sustainability is slower the per-capita growth of health costs. The public sector is actually a bit more efficient–per-capita costs growth more slowly there vs private.


  2. B.K. says:

    The job growth is really pretty remarkable considering the damage from Sandy. Going on three months now and the fact that one of the most productive, job rich areas of our country has gotten no assistance is a national disgrace. The republican pseudo majority in the House ignores job growth and Keynesian economics. A majority that was out voted by over a million democratic votes and one that would take more than a 7% margin in the popular vote to be overthrown because of nationwide gerrymandering. Hopefully the idiocy that they continue to exhibit will finally expose their bankrupt agenda and wake up even the hard right districts. The damage done by the 2011 debt ceiling debate, the fiscal cliff debate, the strategic delay in hurricane relief, and the coming debt ceiling debate have to wake the electorate up. It may come to a crippling government shut down and Supreme Court showdown to finally impose reasonable and responsive government upon the dysfunctional House. The validity of the public debt shall not be questioned.


  3. Tyler Healey says:

    Four years ago, the national unemployment rate was eight percent.

    Now, the buffoons let the payroll tax cut expire, which means unemployment is going to rise back to eight percent and probably higher.

    The height of economic stupidity is engaging in fiscal austerity when the national unemployment rate exceeds three percent.


  4. J says:

    Loved the post until the end when you referenced a nearly 30 year old movie.


  5. purple says:

    It seems the U.S. has settled into a new and lower permanent growth trend post-Great Recession. I don’t think it can get back to trend with an E/P ratio of .586, whether because of demographics or people dropping out of the labor force. And that ratio isn’t changing much at all. Also, immigration is drying up, which is another long-term source of U.S. growth. It probably was net zero with Mexico last year. And with Asia booming, it’s only a matter of time before that dries up as well.


  6. Alan Adams says:

    Mr. Bernstein,
    I would like to ask a pretty simple question. In current discussions of employment, the economy, and deficits why have the media and all prominant economists avoided the HUGE Elephant-in-the-room by comparing current conditions to conditions immediately preceeding the “great recession”?
    That Elephant, as I see it, is the huge amount of “Monopoly Money” that was pumped into the economy during the roughly seven year period preceeding the Wall Street collapse, and therefore into the jobs market. That phoney injection inflated jobs numbers, growth rates, GDP, et al.
    The Financial Industry gleefully advertised and hyped the “new and creative financial products” as wonderful and liberating, and the media (especially the financial media)happily reinforced the farce.
    According to the accounts of the financial bailouts, one has to deduce that hundreds of billions, if not trillions of dollars were pumped into the economy through “non-traditional” loans and derivatives creating construction projects, product sales, and a consumer market otherwise impossible, and enormous numbers of jobs that otherwise would not have existed in nearly all sectors.
    And it didn’t stop just with inflated new and existing home sales at inflated prices. The same was true of commercial developments. Homeowners were sold (have we forgotten the constant stream of bank advertisements?)on refinancing, many with these “creative products”, again based upon inflated appraisals, in order to pay other expenses, and are now either under water on their loans, or have been foreclosed upon.
    Why has no one that I have seen brought this “artificial stimulus” to public view?
    Why are we comparing current economic and jobs numbers to those immediately preceeding the collapse and not at least adjusting those prior several-year numbers to reflect what they would have been without the “Monopoly Money” injection?
    How do we not compare the “not fast enough” recovery with an honest assessment of the “real conditions” prior to the collapse?
    IF we can honestly make determinations as to why the real economy (without the artificial “Monopoly Money” infusion) and the corresponding jobs numbers NOT CREATED by this infusion were lower than reported, then maybe we can get some honest assessment of how to proceed from where we are now, instead of relying on the current hysterics of false comparisons.
    The real problems we now face certainly preceeded the collapse, and ignoring that truth will preclude dealing with that truth, and developing solutions that really address the problems.
    Can we please see some recognition from experts, or is this a topic too toxic to address?


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