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Not Good Enough, Part II

Jan 07, 2011 | By: Mr_Blue | Tags: unemployment, job guarantee, jobs report

Bureau of Labor Statistics (BLS) released the employment situation for December 2010 this morning. Any job growth is good but the Job Hole is deep. Let’s take a look at the numbers.

Here is the new release from BLS.

Good: Total non-farm jobs increased 103,000. Top sectors for jobs: health care, restaurant and bars and temporary help services.

Bad: Long-term unemployment (27 weeks or more) didn’t change much - 6.4 million and accounted for 44.3% of the unemployed. The size of the labor force decreased to 64.3% that means (260,000) people gave up looking for work. The decrease in the size of labor force will lower the unemployment rate (unemployment rate = number of unemployed workers/labor force).

Perspective: We need 300,000 jobs every month for the next 50+ months to get to pre-Great Recession levels. We have been averaging 94,000 since December 2009. The Jobs Hole is very deep.

This graph says a lot about the situation we are in - its a graph of civilian employment to population ratio (notice how we are bouncing around at the bottom):

There is something we could do to address this Jobs Hole in a more efficient and expedient manner than current status quo. Yes, it’s a Job Guarantee Program. But this would be going against current conventional wisdom in Washington which is austerity now. Be prepared for more pain.

Good luck.