Disappointing jobs report -- with silver linings

December 03, 2010|By Jay Hancock, The Baltimore Sun | Baltimore Sun reporter

From Jay Hancock's Blog: Unemployment rose and employers added fewer jobs than expected last month, the Labor Department announced this morning. Employers added only 39,000 jobs last month. Analysts had expected a bump of about 150,000. In prior months this year you could blame poor employment results on the Census. The program was laying off tens of thousands of temporary workers, which depressed the overall job-growth results. The the Census has pretty much downsized by now, so the shrinkage in government jobs last month is about something else -- perhaps states laying off employees now that federal stimulus money is running out.

But there are some slightly bright spots. Private employers added another 50,000 jobs last month, indicating that at least some businesses see growth perking up. The increase in unemployment from 9.6 percent to 9.8 percent may actually be (sort of) a silver lining if it indicates people are returning to the job market because they see prospects picking up. (The Labor Department counts you as unemployed only if you're actively looking for a job.) Of course the impending termination of unemployment benefits for many Americans may be a more likely reason for more people seeking jobs.

Other reasons to not be completely dejected: New applications for unemployment benefits have been falling substantially recently. And the Labor Department has shown a pattern this year of underestimating payroll job growth, a pattern that was repeated in recent months. October job growth was 172,000, revised upward from 151,000. And September's job loss was revised from 41,000 to 24,000. Still, we're trying to put makeup on a warthog, here. The economy needs to be adding at least 200,000 jobs a month to reduce unemployment, and it's clear that's not happening.

jay.hancock@baltsun.com

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