Inside December Jobs Report, Labor Force Hits 'Stunning New Low'

[onehandle]

The news gets worse: less than half of the drop in unemployment rate can be attributed to new job creation -- the other half came from 260,000 Americans who have dropped out of the labor force altogether. This brings the percentage of Americans who are either employed or actively looking for work down to 64.3 percent, what economist Heidi Shierholz calls "a stunning new low for the recession."

"The overarching story here is that this represents the continued slog of the recovery." Shierholz, of the Washington, D.C.-based Economic Policy Institute, said. "It's the same old bright spots that we've been seeing, we continue to see: temporary help services, health jobs, restaurants and bars -- all up." The report shows some growth in health care and leisure services, with most other industries staying static.

In December, hispanic and black Americans continued to be hit hardest by unemployment. "I think this is the lowest employment-to-population ratio we've ever had for Hispanic Americans," economist Dean Baker said, also noting a 2.2 percent raise in the unemployment rate for Hispanic bringing the unemployment percent up to 32.2 (not seasonally adjusted).

For all the economists we spoke to, the drop in the labor force stuck out as the most arresting detail. "We have now added jobs every single month for a year," Schierholz said. "So you would think that there would be labor force growth, these missing workers starting to come back in. Not only is that not happening, it's actually starting to go in the other direction. There's never been a pool of missing workers this large. It's not clear to me when they'll come back."

http://www.huffingtonpost.com/2011/01/07/bleak-jobs-report-never-s_n_805797.html

[wtbymark]

1. I think they will come back to the workforce....

WHEN YOU OFFER THEM A JOB!!!!!!!!

Reinstate Tariffs, re-institute SANE trade policies

[Cali_Democrat]

2. Not only are people dropping out of the workforce, but...

What's even crazier is that the types of jobs we are creating will not sustain this economy. Also, we have to create between 150,000 and 200,000 just to keep up with population growth.

Many new jobs are restaurant and bar jobs along with health care jobs.

Many high paying jobs have been outsourced for slave wages and will never be coming back.

The overall US standard of living will continue to deteriorate, especially with the type of jobs that are being created.

Also, corporations are squeezing productivity out of existing workers and are refusing to hire, force people to work longer and harder.

At least corporate profits are nearly at record highs. :eyes:

[golfguru]

6. Dollar General has lots of new jobs

selling Chinese made goods.

Wonder how many of those pay over $10/hour, which is a bare bones subsistent wage.

[ProSense]

3. Every jobs report since 2009 contains bad news. Still,

this is not worse:

<...>

The news gets worse: less than half of the drop in unemployment rate can be attributed to new job creation -- the other half came from 260,000 Americans who have dropped out of the labor force altogether.

<...>

That's not worse. It's half, and that would mean a drop of .2 percent is attributed to job creation.

EPI:

The December jobs report shows continued improvements in the labor market, but they were modest. Payroll employment growth was just 103,000, average hours held steady at 34.3, and average hourly wages increased by only three cents. Though the unemployment rate dropped to 9.4%, around half of the improvement was due to 260,000 people dropping out of the labor force, leaving the labor force participation rate at 64.3%, a stunning new low for the recession. Incredibly, the U.S. labor force is now smaller than it was before the recession started, though it should have grown by over 4 million workers to keep up with working-age population growth over this period.

The good news in this report is that December caps an entire year of job gains in the private sector. The bad news is that – three full years after the recession officially began – the U.S. is still near the bottom of a deep crater. Where does the Great Recession, three years out, stack up historically? The accompanying figure, which compares the percent employment change by month from the start of each post-WWII recession, shows that the Great Recession is far outside the experience of any this country has seen in 70 years. Three years out, the labor market is still down a larger percentage of jobs (5.2%) than at the most severe point of any other postwar recession.

<...>

While the labor market is now adding jobs, it remains 7.2 million payroll jobs below where it was at the start of the recession three years ago. And even this number understates the size of the gap in the labor market by failing to take into account the fact that simply keeping up with the growth in the working-age population would require the addition of another 3.7 million jobs in those three years. This means the labor market is now nearly 11 million jobs below the level needed to restore the pre-recession unemployment rate (5.0% in December 2007). So, despite the job growth of 2010, we remain near the bottom of a very large hole. To achieve the pre-recession unemployment rate in five years, the labor market would have to add nearly 300,000 jobs every month for the entire period. December’s modest improvement offered 103,000 pieces of good news, but little collective cheer.

The rate dropped, it didn't go up, and jobs were created, although short of expectations.

The reaction to this report should be viewed in context of a report that could have continued the November 2010 path (a decline in the number of jobs created and an increase in the unemployment rate). Instead it's continuning to move in a noticeable positive direction, especially with the October and November being revised up.

[GeorgeGist]

4. Investors cheer.

260,000 Americans disappear.

[golfguru]

5. Stock market did not like the job report either...down today

[HeroTwins]

7. you should learn to handle improving job numbers better

[opihimoimoi]

8. Them GOPertists gonna slash spending ??? That will exasperate the prob big time....we need more

spending...not less...

[trayNTP]

9. What would the unemployment rate be without Iraq & Afghanistan contracting?

Just wondering how entrenched our war-based economy is.