The best news for the economy in a long time
The Great Recession may be technically over for the economists -- GDP is rising again, which means the decline in economic output that defines recessions has stopped, at least temporarily. But it won't feel like it's over to Americans until the country starts adding jobs again. That hasn't happened yet, but today's jobs report from the Labor Department shows the next best thing: We've stopped losing jobs, at least for one month.
Analysts had projected the November jobs report to show that the economy had shed employment by more than 100,000 jobs for the 22nd month in a row. They were wrong. Today's report shows that the economy lost only 11,000 jobs last month, which is statistically nothing. And previously announced job losses for October and September were substantially revised, for the better. October job loss was not 190,000, as announced a month ago, but 111,000. The economy lost 139,000 jobs in September, not 219,000 a previously announced.
The unemployment rate even dipped a little bit, from 10.2 percent in October to 10 percent.
Make no mistake: The economy is still terrible and will be bad for many months. We're not adding jobs yet. But today's report is the single best piece of economic news we've had for a long time. And it suggests that the policy responses by the Bush administration and the Obama administration -- big-bank rescues, unprecedented monetary stimulus, almost $800 billion in fiscal stimulus -- are working.
Comments
Jay,
What about the possibility the economy would have recovered faster without the "stimulus"? And is not any credit given to the stimulus suspect since (a) so much of it was transfer payments to other government agencies and (b) most of what was budgeted has yet to be spent?
What is really disappointing is the double-speak coming out of Washington DC. For the past year politicians have sneered at the reckless greed of capitalists and now they want some capitalists to exercise some greed, borrow money and create some jobs! Any jobs that will be created during the Obama administration will be in spite of his policies, and no credit should be given to his jawboning or constant campaigning.
Any economist with an ounce of integrity would be very careful about attributing causality when none can be proven.
Posted by: Dan | December 4, 2009 9:24 AM
Optimism is good, but this is sort of a
"the Titanic is sinking slower" story.
Posted by: save_the_rustbelt | December 4, 2009 11:02 AM
I'm extremely skeptical that the 11,000 number is correct. I'm a bit curious to know why the previous two months' adjustments were off by 79,000 and 80,000 respectively--roughly the exact same number. Adjustments in such figures are common, but to have two almost-identical adjustments downward two months in a row, followed by what appears to be an unusually low number raises a red flag for me.
Posted by: Laura | December 4, 2009 1:53 PM
This is not the story of a reversing trend that everyone is portraying it to be. It is a story of correcting overstated job losses from the previous two months.The huge positive revision of September and October's BLS reports is what dropped the U6 from 17.5 to 17.2, and aided by 291k people giving up looking for work dropped the U3 from 10.2 to 10.0. Such heavy revisions cast doubt on the accuracy of November's smaller than expected 11k loss.
The U3, often referred to as the headline rate, measures only those actively seeking work.
The U6, often referred to as the REAL unemployment rate includes those who have simply given up looking for work as well as those who would like to work full time but can only work part time.
Posted by: Josh Dowlut | December 4, 2009 7:06 PM