Yet in the second paragraph: "The economy shed another 20,000 net jobs during the course of month." That's a lot better than losing hundreds of thousands of jobs a month like we were at the peak of recession, but it's still a net loss of jobs. Not exactly a "reawakening."
You might ask, how did the unemployment rate drop if the economy lost jobs on the whole? Well, it turns out that the Labor Department changed how they estimate the overall population.
The report also featured a new way in which the government estimates the population, which is used to calculate the unemployment rate. That prompted some economists to dismiss the drop in joblessness as a statistical quirk.
“The message is, you can’t believe what they tell you,” said Joshua Shapiro, chief United States economist at MFR Inc. in New York. “Everyone goes crazy over today’s number, but history has been rewritten. Things are not comparable from month to month.”
So we'll see when next month's numbers out, but it's clear that the labor market isn't exactly reawakening if we're still losing jobs.
Meanwhile, my daily Financial Times email summary of the day's global news remarked that "the number of US workers claiming jobless benefits unexpectedly rose last week." Didn't see that in the Times article. Obviously a monthly time scale is a better indicator of overall trends than a weekly one, but it is another strike against the supposed reawakening. That weekly data combined with fears of sovereign debt default in Greece and elsewhere in Europe "rocked global markets" according to the FT, suggesting that investors take that data more seriously than the monthly report.
The NYT article concludes oddly enough with a quote from the great liberal economist (actually probably more of a leftist than a liberal, pretty cool that he's getting such coverage, probably has to do with the fact that he called the housing bubble), Dean Baker, that is at odds with their optimistic headline.
Things are getting bad less rapidly,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington. “We’re sort of hitting bottom, but there is no evidence of a robust turnaround.”
If the media and politicians continue to trumpet about a recovery in the labor market when it's clearly not there, it lessens the chance of a serious jobs program to deal with the millions of people left semi-permanently unemployed (as the article notes, 6.3 million out of work for 6 months or more), financed through debt or taxes on the wealthy and financial sector. We need to be on the alert for a jobless recovery that will benefit capital much more than working families. Plus, given that so much of our economy is reliant on consumer spending, a jobless recovery might not end up being a recovery at all.
No comments:
Post a Comment