Friday, December 02, 2011
A closer look at this morning's unemployment report. Long term, the sustained monthly declines in government employment are good for the economy. The problem is that they will come back when the economy improves, because make-work and no-work jobs are a great way for local politicians to buy votes.
Analysts were saying all day yesterday that the report seems like a bit of electioneering (combined, seasonal adjustments and assumed retirements from the workforce are responsible for the improvement), and even though the less-than-expected jobs growth came mainly from low paying, temporary retail jobs.
I really don't care! A little bit of good news for the long term unemployed, however temporary a respite, at this time of year especially, is reason for celebration. So, yippeee!
May we see many more such reports next year.
Unemployment went down in large part because the "participation rate" went down.
"Jobs per total population" is harder to fudge -- it went up a bit but has been essentially flat since early 2009.
The elephant in the room is that this has been going on while the Feds have been pumping in over a trillion a year in excess demand. Normslly this would redline GDP growth to Chinese levels, and drive down unemployment to low single digits.
I'm not totally negative. There are bright spots but they're localized to certain states, and aren't national.