The unemployment rate has fallen to 8.3%, the second straight decline taking us to the lowest jobless rate since February 2009. The gain of 243,000 jobs was better than economists predicted. We did technically lose 2,689,000 jobs as well; “seasonal” employment always falls after the holidays. However, non-farm jobs are unaffected by seasonal employment and have seen growth that offset the losses overall.
Interestingly enough, the growth is driven by the private sector. Federal, state, and local governments have downsized as the private sector, including construction, has added jobs. Government employment fell 2.6% over the past three years of Obama’s presidency, exceeding even Reagan’s cuts of 2.2% over his early years. The hardest hits have come to local government jobs 2009, 2010, and 2011. The only other three years these were not extremely safe jobs were 1981, 1982, and 1983. Under Reagan, there was a larger decline in the local government jobs overall, although more teachers were cut under Obama’s administration, which is always nice to hear.
It’s wonderful to see numbers with plus signs before them, but we have to keep in mind that there are still plenty of people out there who have given up on looking for work altogether, can only find part-time jobs, or have not found nearly as good a job as the one they lost. Also, prospects for us young things at Dartmouth are still pretty ugly; older workers whose retirement funds and home equity values were depleted have continued to hold on to jobs that were once freed up for new blood. Although, if the small increases in employment are as sustainable as they appear, that’s more encouraging than I thought. Basically, it’s going to be an insanely competitive job market for a while; experienced workers are having trouble regaining employment, the unemployment for college graduates is a stagnant at 4.4% (sorry, guys) while the rate for high school graduates decreased from 10 to 8.8%, and the median length of unemployment has grown form 36.6 weeks to 42.7 weeks.
Michael Darda of MKM Partners said, “While the economic data have been better of late, we remain concerned that we are seeing a bounce back from a series of supply shocks earlier in the year that may not be sustained against the foliage of tighter financial conditions, a deep recession in Europe and a sharp slowdown in China and emerging market-countries.” Morgan Stanley’s David Greenlaw and Ted Wieseman also said, “Things are looking better, but we wouldn’t get too carried away just yet.” The Congressional Budget Office shot down the optimistic data with its predictions of a slow economic growth rate of 2% this year and the unemployment rate rising again as rejuvenated hope enlarges the job market, predicting 9.2% unemployment in 2013.
At least the numbers look good. Some people are officially better off than they were. As for the actuality of the situation, the numbers can’t really help us out with how quickly or well we can climb out of this, or how many people are sitting home with no work rolling their eyes at the excitement over a change of .3 out of 100.
–Meghan Hassett
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