Quick Takes

Unemployment rate drops to 9.7% despite more job losses

The latest Bureau of Labor Statistics report shows a loss of 20,000 jobs in January. The total number of payroll jobs lost since the start of the recession in December 2007 now stands at 8.4 million.
Given the slight decline in payroll jobs in January, there was an inexplicable decline in unemployment in January from 10% in December. Long term unemployment, however, continued to rise, with over 40% of the nation’s unemployed out of work for more than 6 months, a new record.
In a testament to the enormity of the current crisis, the U.S. labor market started 2010 with fewer jobs than it had a decade ago, in January 2000, even though the labor force has grown by almost 11 million workers since then.
Policy makers need to pass a substantial jobs bill, because if anything should be seen as too big to fail, it should be the livelihood of America’s working families. --Heidi Shierholz READ MORE

GDP is growing, but don’t break out the champagne

Today’s report that GDP grew at a 5.7% annual rate in the fourth quarter is good news, but it’s far too early to break out the champagne and declare "recovery accomplished."
Even if this growth rate were to be sustained for 3 years we would still not create enough jobs to climb out of the hole caused by this recession. Worse, this growth will not be sustained. This quarter’s growth was driven largely by a restocking of business inventories that will not be repeated in coming quarters.
Nothing about today’s report says that a sustained recovery will happen quickly unless Congress and the Administration pass a robust jobs package on the magnitude of $400 billion dollars. -Josh Bivens READ MORE

Unemployment unchanged at 10% as labor force shrinks

The latest report from the Bureau of Labor Statistics showed that the jobs situation continued to worsen at the end of 2009 as 85,000 jobs were lost in December. Unemployment held steady at 10.0%, but only because the labor force declined by well over half a million (661,000) workers in December. If those workers had been in the labor force and counted as unemployed, the unemployment rate would have risen to 10.4%. Long term unemployment continued to rise, with nearly 40% of all unemployed workers being unemployed for more than six months. Unfortunately, the hoped-for positive job growth has not yet materialized and we are still seeing modest job losses. -Heidi Shierholz READ MORE

Flawed, but better than the status quo

The health reform bill passed by the Senate contains many flaws, but the American health care status quo is a disaster.
The Senate bill provides hundreds of billions of dollars to make health care more affordable for tens of millions of people. It also levels the insurance playing field by imposing vital new regulations on private insurers and creating a new marketplace for individuals and small businesses seeking coverage. Its passage would be a welcome step in moving health reform forward.
With luck, it will be further strengthened in conference committee when it is merged with the superior House reform bill, which contains more generous subsidies, a more progressive financing structure, and a public option to compete with private insurers in the new exchanges. READ MORE

Layoffs moderating, but hiring still slow

The Bureau of Labor Statistics’ new Job Openings and Labor Turnover Survey shows there were 13.2 million more unemployed workers than job openings in October, or 6.3 unemployed job seekers for each available job. This compares to a ratio of 1.7 job seekers per job opening when the recession started in December 2007.
The new data show that although layoffs are moderating, hiring remains extremely depressed. Until there are more job openings, unemployment will continue its upward climb. --Heidi Shierholz READ MORE

Job loss moderated in November, but long-term unemployment still rising

New employment data for November show a dramatic moderating of job loss – payroll jobs declined by 11,000, the smallest loss since the recession started in December 2007. Other good news was that the average work week increased from 33 hours to 33.2 hours, a positive signal that employers are on the verge of hiring.
Unemployment edged down to 10% in November from 10.2% in October, though that was likely in part a correction to the uncharacteristically large jump in unemployment last month. Long-term unemployment continues to rise. Nearly 300,000 workers crossed the six-months-unemployed threshold in November, bringing the number of long-term unemployed workers to 5.9 million.
All told, this report shows that there is finally some healing in the labor market, as indicated by both increased hours and payroll employment remaining essentially unchanged. Unemployment, however, is expected to continue on an upward trend until we start adding jobs in a meaningful way, which will likely not happen until next spring or summer." -Heidi Shierholz READ MORE

Unemployment up sharply despite GDP growth

Unemployment rose dramatically to 10.2% in October, the highest rate since March of 1983, and 190,000 payroll jobs were lost. This is in spite of the fact that the economy is now growing.
“The American Recovery and Reinvestment Act has stopped the free-fall, but the scale of economic decline has been so large that it has not been enough to prevent rising unemployment. Today’s unemployment numbers are a wake-up call. Our leaders need to authorize substantial additional spending for relief and job creation in order to prevent unemployment from remaining elevated for years to come,” said EPI economist Heidi Shierholz.
“Unemployment has now exceeded what some thought would be the peak. With such a huge fire we need every hose we can find to put it out,” said EPI’s president Lawrence Mishel. READ MORE

VP Biden consults Mishel, other experts, to discuss middle class challenges

Vice President Joe Biden on November 5 convened a group of experts, including EPI’s president, Lawrence Mishel, to advise the White House task force he heads on the struggles of middle class families.
Mishel blamed the current situation that has left so many middle class families squeezed on decades of faulty assumptions. Lowering business costs, ostensibly to help consumers, has eroded workers’ ability to earn a decent living and drive consumption rather than rely on debt and asset bubbles. Mishel advocated new policy priorities focused on rebuilding the nation’s supply of good jobs and reestablishing wage growth that reflects productivity growth.
“As the President has said, we must develop a new foundation for growth,” Mishel said. “This means enhancing productivity growth and transitioning to a low carbon economy. It also means a relentless focus on generating quality jobs and building an economy where the entire workforce benefits from rising productivity.” READ MORE

New proof that the Recovery Act is working

New data from recipients of grants, loans, and contracts made under the Recovery Act count about 650,000 new jobs created or retained to date, one of the strongest signs yet that the Recovery Act has led to significant job creation.
The data, which reflect a fraction of all the Recovery Act investments made to date, are consistent with other estimates of jobs creation showing that between 1.1 and 1.5 million jobs have been created or preserved as a result of the stimulus package to date. It follows recent news that the economy as a whole grew by a 3.5% annual rate in the third quarter, another indication that the Recovery Act has provided a much needed spark to the economy. -John Irons READ MORE

Recovery Act crucial to GDP growth this quarter

In the 6 months before investments made under the American Recovery and Reinvestment Act (ARRA) started to kick in, the economy was contracting at a 5.9% rate. In the 6 months since, the economy has grown at a 1.4% rate, new gross domestic product figures released on October 29 show. While it’s far too early to declare “mission accomplished,” it is crystal clear that the Recovery Act was crucial in pulling the economy out of its tailspin and putting it on the path to growth. -Josh Bivens READ MORE

Senate Republican stand on unemployment insurance makes no sense

Senate Republicans are reportedly planning to block legislation that would extend unemployment insurance benefits for the 1.5 million people who have been out of work so long they will have exhausted their eligibility -- unless the extension is paid for with funds already devoted to saving or creating jobs.
This is a bewildering position to take. Paying for additional unemployment compensation with funds intended to prevent more people from losing their jobs or to spur job creation, is a truly extraordinary example of robbing Peter to pay Paul. Helping the unemployed today while adding more to their ranks tomorrow is a choice no public servant should ever make. –Ross Eisenbrey READ MORE

Recovery.gov jobs number a sliver of the total

In the first batch of data reported from recipients of Recovery Act funds, the Web site Recovery.gov said on October 15 that 30,383 new jobs had been created so far. This is an important first step toward greater government transparency, but it should not be interpreted as an accurate number of all the jobs created by spending under the $787 billion Recovery Act passed last February.
Recovery.gov’s initial report represents only $16 billion in awarded contracts, meaning that it excludes jobs created or saved by grants, loans, tax cuts, or any relief spending, such as unemployment insurance and food stamps or state fiscal assistance. In addition, this initial report only measures direct employment. It does not count “respending” jobs, such as those created or saved indirectly by workers’ new spending and consumption, or “upstream” jobs, created or saved at companies that manufacture, transport, or sell the supplies used by recipients of Recovery Act investments. EPI believes the Recovery Act is on track to create 3 to 4 million jobs over two years. –Kathryn Edwards READ MORE

6.3 job seekers for every job opening

Although the number of monthly job losses has declined since last winter, it is still getting harder every month to find a job. There were 6.3 job seekers for every job opening in August, a new report from the Bureau of Labor Statistics shows. That ratio increased from 6 to 1 in July and from 1.7 job seekers per job opening in December 2007, the first month of the recession.
The ratio of job seekers to job openings does not include people who are currently employed but are looking for work due to a lack of job security in their current positions, so it actually understates the number of people competing for each job. – Heidi Shierholz READ MORE

Jobs gap still widening

The Bureau of Labor Statistics on Friday released the employment report for September, the 21st month of consecutive job loss, making this the longest streak in 70 years. While losses have moderated since the huge drops early this year, they remain substantial -- 263,000 jobs were shed in September and the unemployment rate rose to 9.8%. The only factor that kept unemployment from rising higher was that 571,000 workers dropped out of the labor force.
Between the 7.2 million jobs lost since the start of the downturn in December 2007, and the 2.7 million jobs (about 127,000 per month) that should have added to keep up with population growth, the gap in the labor market has now reached approximately 9.9 million jobs. To close this gap and return the labor market to pre-recession conditions by September of 2011, employment would have to increase by an average of 538,000 jobs every month between now and then. Thanks to the Recovery Act, we have stepped back from the abyss and losses are moderating. But the hole in the labor market is now so huge that it will require enormous, sustained levels of growth to fill it any time soon. --Heidi Shierholz READ MORE

Job gap still widening

The Bureau of Labor Statistics on Friday released employment data for September, the 21st month of consecutive job loss. While job losses have moderated since the huge drops early this year, they remain substantial -- 263,000 jobs were shed in September and the unemployment rate rose to 9.8%. The only factor that kept unemployment from rising higher was that 571,000 workers dropped out of the labor force.
Between the 7.2 million jobs lost since the start of the downturn in December 2007, and the 2.7 million jobs (about 127,000 per month) that should have been added to keep up with population growth, the gap in the labor market has now reached approximately 9.9 million jobs. To close this gap and return the labor market to pre-recession conditions by September of 2011, employment would have to increase by an average of 538,000 jobs every month between now and then. Thanks to the Recovery Act, we have stepped back from the abyss and losses are moderating. But the hole in the labor market is now so huge that it will require enormous, sustained levels of growth to fill it any time soon. -Heidi Shierholz READ MORE

Census Bureau report shows need for health care reform

A new Census Bureau report on income, poverty and health insurance coverage in the U.S. shows that the existing health care system is failing to provide stable and secure coverage for a growing number of Americans. The report shows that employment-based health coverage dropped for the eighth year in a row, from 59.3% of Americans covered in 2007 to 58.5% in 2008. The number of Americans without any health insurance rose from 45.7 million in 2007 to 46.3 million in 2008.
It’s a virtual certainty that with the deepening of the recession in 2009, more Americans are losing health insurance every day. Americans need affordable, secure alternatives to a system where losing a job too often means losing health insurance. The status quo is simply not a viable solution. –Elise Gould READ MORE

Five million workers have been unemployed for more than six months

A new Bureau of Labor Statistics report shows that in August, the 20th month of the economic downturn, an additional 216,000 jobs were lost, while the unemployment rate rose to 9.7% from 9.4% in July. Some five million people — one out of every three unemployed workers — have been out of work for more than six months.

“Thanks to the Recovery Act, the pace of job loss is slowing dramatically. However, we are still losing jobs faster than we’re creating them. Hiring is not yet picking up, so unemployed workers are not able to find jobs.” said EPI economist Heidi Shierholz. Read more in today's Jobs Picture. READ MORE

New deficit numbers underscore the depth of the downturn

The While House on August 25 released an updated estimate of the federal budget deficit, which shows it now totals $1.6 trillion or 11.2% of gross domestic product. This is $262 billion less than what was estimated in May. The Congressional Budget Office showed a smaller improvement. The new numbers confirm earlier EPI research showing that the recession is the main cause of the deficit deterioration. Lower incomes, higher unemployment, and reduced business activity have all combined to produce the lowest level of federal revenues – as a portion of GDP – in more than 50 years. Policy measures aimed at stabilizing the economy have also added to the deficit, though to a much smaller extent: Stimulus investments made under the American Recovery and Reinvestment Act accounts for only about one-eighth of the deterioration in the 2009 deficit relative to pre-recession estimates.
Some will use this report as an opportunity to call for immediate action to reduce the deficit, or to suggest that we need to abandon or delay major policy initiatives, like health care reform. But given that the current deficit is largely caused by the recession, any near-term deficit reduction would choke off the recovery and, in the end, would be both irresponsible and self-defeating. –John Irons READ MORE

Rising unemployment, falling health care coverage

A new report from the Census Bureau is expected to show a rise in the number of Americans who don’t have health insurance, resulting in part from rising unemployment. While many people who lose their jobs lose their health insurance with it, EPI research has also highlighted a decline in health care coverage among the employed population: Even among full-time workers, 17% do not have insurance and more than one-third of the uninsured work full time. –Andrea Orr READ MORE

Recovery Act saving jobs, but long-term unemployment highest in 70 years

The July unemployment report showed that 247,000 more jobs were lost last month, although the unemployment rate declined 0.1 percentage points to 9.4%, reflecting 422,000 people dropping out of the labor force. The number of workers who have been unemployed for over six months, meanwhile, increased by 584,000 to 5 million, meaning that more than one-third of the country's 14.5 million unemployed workers have been jobless for more than half a year. The economy is clearly worsening, but thanks to the American Recovery and Reinvestment Act, it is doing so much more slowly than during the winter months. Job losses in July would likely have been nearly double without the impact of the recovery act. READ MORE

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