From The Guardian UK: http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/05/usemployment-usa?INTCMP=SRCH
March’s job numbers were greeted rapturously by the business press. Scratch the surface of the data and things are not so rosy
Dean Baker
April 5, 2011
When the labour department announced that the US economy had created 216,000 jobs in March, it set off a round of celebrations throughout Washington policy circles. The word in the New York Times, the Washington Post and other major news outlets was that the economy was back on course; we were on the right path.
Those who know arithmetic were a bit more sceptical. If the economy sustained March’s rate of job growth, it will be more than seven years before we get back to normal rates of unemployment. Furthermore, some of this growth likely reflected a bounceback from weaker growth the prior two months. The average rate of job growth over the last three months has been just 160,000. At that pace, we won’t get back to normal rates of unemployment until after 2022.
That’s a long time to make ordinary workers suffer because the folks who run the economy are not very good at their job.
In addition to the job growth numbers, the March data also showed that the unemployment rate slipped down by another 0.1 percentage point. It now stands at 8.8%, almost a full percentage point below its year ago level of 9.7%. This, too, was treated as cause for celebration. While that may sound like progress, a more careful look at the data makes this number less impressive. The percentage of the population that is employed has actually fallen by 0.1 percentage point over the last year.
In order to be counted as unemployed, you have to say that you are looking for work. The unemployment rate did not fall because the unemployed had found jobs; rather, the unemployment rate fell because people have given up looking for work. Only in Washington would this be hailed as good news.
Remarkably, as the mixed basket of economic news in the March employment report was being celebrated, a major piece of unambiguously bad news was almost completely ignored. The commerce department released data on construction spending for February (pdf).
Continue reading at: http://www.guardian.co.uk/commentisfree/cifamerica/2011/apr/05/usemployment-usa?INTCMP=SRCH
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