For a while, the Associated Press seemed determined to make “unexpected” and its variants the most overused term in economic reporting. Today, they give their readers an unexpected shock by dropping the forced sense of optimism normally used in giving bad economic news in their analysis of today’s jobless report. Instead, Christopher Rugaber reports the obvious — that the loss of 85,000 more jobs is nothing but bad news, and that the 10.0% figure hides the rot underneath:
Lack of confidence in the economic recovery led employers to shed a more-than-expected 85,000 net jobs in December even as the unemployment rate held at 10 percent. The rate would have been higher if more people had been looking for work instead of leaving the labor force because they can’t find jobs.
The sharp drop in the work force — 661,000 fewer people — showed that more of the jobless are giving up. Once people stop looking for jobs, they’re no longer counted among the unemployed.
When discouraged workers and part-time workers who would prefer full-time jobs are included, the so-called “underemployment” rate in December rose to 17.3 percent, from 17.2 percent in November. That’s just below a revised figure of 17.4 percent in October, the highest on records dating from 1994.
Despite the sunny spin coming from the White House, the situation got worse as the year wore on:
The participation rate in the labor force — the portion of adults either working or looking for work — fell in December to 64.6 percent, the lowest since August 1985.
The drop was particularly steep in the second half of last year. That suggested that people were becoming discouraged about their job prospects even as layoffs slowed. The reason is that job openings remain far too few.
And Rugaber supplies some historical context as well:
Friday’s report caps a disastrous year for U.S. workers. Employers cut 4.2 million jobs in 2009. And the unemployment rate averaged 9.3 percent. That compares with an average of 5.8 percent in 2008 and 4.6 percent in 2007. Nearly 15.3 million people are unemployed, an increase of 3.9 million during 2009.
The reaction today from the White House suggests that they know the spin won’t hold. In the earlier report, Reuters finally admitted that the rise of temp workers may not be a leading indicator of recovery, but a shift in approach by employers spooked by ObamaCare and heavier taxes and energy costs. Labor Secretary Hilda Solis also suggested that companies may be sitting on the sidelines looking for more incentives to hire — a signal that the administration has been giving for months.
Unemployment has not gotten better; it has gotten worse, and the statistics have hidden the real decline in 2009. Until now, only a few media outlets bothered to highlight the problem. The AP has finally made it clear — and that will mean a lot more attention in 2010 to the failed Porkulus legislation and the fumbled economic strategies of the Obama administration. (via Geoff A)
Update: Inn0cent Bystanders is known for producing the amended Romer charts on unemployment rates each month, but this chart is more on point. It shows the decline of jobs and the steep rate that hasn’t changed at all this year:
There was a slight incline in March and another in November, but the trend is otherwise a straight line downward all year. This underscores the AP point made today.