The November employment report released this morning by the Bureau of Labor Statistics contained some relatively positive news, with the establishment survey showing an increase of 203,000 jobs and the unemployment rate falling to 7.0 percent. While this is promising news, the economy still needs to add 7.9 million jobs to get back to pre-recession health.
In her analysis, EPI economist Elise Gould takes a closer look at today’s data and finds that the overall trends in the labor market are still troubling. For instance, with the government shutdown over, the public sector is still missing 1.47 million jobs.
“The talk about the effects of the October government shutdown on public-sector employment is largely a distraction from the larger issue, namely just how many jobs the economy needs to create to return to pre-recession levels of public-sector employment,” writes Gould. “In addition to the economic ramifications of the 800,000 furloughed government employees in October, we still face a sizable jobs shortfall in public-sector employment.”
Gould also examines the rise in long-term unemployment this month, making the case for extending the emergency unemployment benefits that are set to expire. “Today, the long-term unemployment rate is more than double the average rate in 2007,” Gould continues. “Federal unemployment insurance benefit extensions are set to expire at the end of this month. It would be unprecedented for unemployment insurance benefits to expire at a time when the long-term unemployment rate remains so elevated.”
These trends, coupled with the fact that high unemployment plagues all demographic groups and cuts across all occupations, are evidence that while today’s numbers may be heartening, they are not a sign that Congress should continue spending cuts or that the Federal Reserve should enact contractionary monetary policy.