Economists explain that for the country to begin lowering the rate of unemployment, it must create new jobs at a pace of roughly 150,000 per month. More than two years after the harsh recession ended, the economy finally has reached that threshold, at least for the past three months. On Friday, the federal government reported a net gain of 243,000 jobs in January, the unemployment level falling to 8.3 percent, or where it stood in the first full month of the Obama presidency.
The feds updated the numbers for December and November, the economy adding 203,000 jobs in the former and 157,000 in the latter. Perhaps the recovery is gaining the sustained momentum that has proved so elusive. Worth noting is that the past year has been best for job growth in five years, the economy adding almost 2 million new jobs.
Mitt Romney, the leading Republican contender for president, argues that President Obama has made things worse with his economic policies. That may seem true in the narrow light of the jobless rate, unemployment peaking at 10 percent in October 2009. As almost any economist will relay, the jobless rate is a lagging indicator, the recession a year old when job losses climbed above 700,000 per month. Adding 600,000 jobs since November hardly seems an unfavorable turn.
Might the economy have performed better under a set of Republican policies? Many in the party have little patience for a similar argument from the Democratic side, that the downturn would have been much deeper without the president proposing and implementing the stimulus plan.
The good news is that the jobless rate declined last month because people were gaining real employment rather than merely exiting the work force. Yet as hopeful as the signs may be, the economy remains fragile, the wreckage of the recession still apparent, possible trouble looming ahead, especially as Europe struggles with its debt crisis.
The number of unemployed remains high at 12.8 million people, with 5.5 million out of work for six months or more, an extraordinary 43 percent. Payroll employment remains 5.6 million jobs short of where it stood in December 2007, the start of the recession. Add to the jobless ranks those no longer searching for work or working part-time because they cannot find a full-time position, and the unemployment rate jumps to 15.2 percent.
There are four jobless workers for every job opening today. The number of people currently employed is lower than 11 years ago.
In these circumstances, the country cannot afford to err in its policy-making, failing to extend emergency unemployment benefits and the payroll tax reduction through the end of the year. House Republicans have proposed narrowing eligibility and reducing the number of weeks for unemployment benefits, diminishing one of the most effective tools for bolstering the economy, inviting slower growth and job creation.
Congress has until the end of the month to join the White House in making the extension. It shouldn’t be a difficult task.
