The November Bureau of Labor Statistics job report – with a reported increase in 203,000 jobs and an unemployment rate of declining to 7.0% – shows a continuing but slow recovery.
The celebration should be muted. Jobs growth has now averaged about 194,000 jobs a month over the last year. At this rate, it will take five years to recover to pre-recession jobs levels. Both the percentage of the population employed and the percentage of the labor force available for employment remain below levels of a year ago. The economy is adding jobs, but not at the rate needed to climb out of the hole we are in. Over 20 million people remain in need of full time work. Long-term unemployment remains very high, still over 37% of the unemployed. Not surprisingly, wage growth remains low (2% for the year).
The good news is November witnessed continued growth in manufacturing jobs (27,000) and construction jobs (17,000) as well as professional and business services, health care, transport and warehousing, retail and food services.
This report will increase pressure inside and outside the Federal Reserve to begin winding down its extraordinary bond purchases (“quantitative easing”). But we cannot accept this economy as the new normal.
What this report should reinforce is the need for Congressional action on jobs. We need investments in rebuilding our infrastructure, improving our schools from pre-K to affordable college, supporting the R&D vital to the industries of the future. These investments would put people to work and boost growth. They could easily be paid for by ending the perverse tax policies that give companies incentives to move jobs and report profits abroad. Instead the federal government to cut jobs and slow growth. It is simply bizarre that Americans should continue to suffer mass unemployment, stagnant wages and growing inequality because ideologues obstruct common sense measures to get this economy moving.