Jobs are up, so why are people still unemployed?
The Labor Department released its monthly jobs report on Friday, and the news was, well, mixed.
The good news: The economy added jobs for the first time since May. Private employers added 159,000 jobs, while government employment fell by 8,000. That’s a 151,000 gain in jobs, which is more than double the number that most economists predicted. It could be better—the economy added 432,000 jobs in May—but at least we’re back in the black.
The bad news: The unemployment rate is still stuck at 9.6%, where it was last month. Almost 15 million people are still looking for jobs, and 4.4 million people have been out of work for a year or more. Adding 151,000 jobs a month is not enough to get us back to a significantly lower unemployment rate. As President Obama put it Friday morning, the report is “encouraging news,” but the unemployment rate is still too high. And, he added, “The fact is, an encouraging jobs report doesn’t make a difference if you’re still one of the millions of people who are looking for work.”
There are so many measures of job news that it’s often hard to get a real picture of what’s happening out there. For example, Gallup’s Job Creation Index, which measures employee perceptions of hiring and firing, shows that 30% of workers say their employers are hiring, and just 20% say they’re letting people go. That’s the biggest gap all year (see chart below), which is encouraging.
Then there’s the $600 billion in Treasury bonds that the Federal Reserve announced Wednesday it would buy in hopes of spurring the economy even more. The stock market reacted enthusiastically, which in turn could boost job creation down the line.
In the meantime, the worst-case scenario foreseen my some economists—that the economy would sink down again after tentative improving—seems to be reassuringly in the past: John Ryding, chief economist at RDQ Economics, told The New York Times: “The notion that the economy might be double-dipping can now be safely tossed out.”
For now, that’s the kind of good news we have to settle for in this economy.
What are you seeing at your workplace or among friends: new hires, layoffs, or status quo?