Jobs come back, along with unemployment

By Felix Salmon
May 7, 2010
payrolls report this morning was good: it feels churlish to throw cold water on the news that 290,000 more people are working now than a month ago.

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The payrolls report this morning was good: it feels churlish to throw cold water on the news that 290,000 more people are working now than a month ago.

But. Keep an eye on those unemployment rates. The headline figure is back up at 9.9%, the highest it’s been this year. The U-6 underemployment rate is a gruesome 17.1%. And U-4, which is total unemployed plus discouraged workers, has hit a new high of 10.6%.

If we’re going to have sustained GDP growth, it’s going to have to come from those figures falling back to acceptable levels: without that happening, we can have a little bit of a rebound, but none of the long-term consumer demand that’s necessary. And yet they’re all going the wrong way: up, rather than down. That’s devastating for the economy, and not only because rising unemployment is a sure-fire way to increase mortgage delinquencies, with all the ugly financial and fiscal consequences that entails.

Underneath it all, there’s a glimmer of a silver lining to the unemployment figures: they come from an increase in the labor force, which means that people are actually bothering to look for work again. Remember though that 6.7 million people have now been unemployed for more than six months — 46% of the total unemployment figure. We’ll literally never find jobs for all of them: many will never be employed again. Which is the real underlying tragedy of this recession, and of the jobless recovery.


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Pretty soon, hundreds of thousands of temporary 2010 US Census employees will be on the market again.

The 2000 US Census employed over 800,000 people.

Posted by yr2009 | Report as abusive

It might be ‘churlish’ to also ask whether the enormous uptick in hiring in the Gulf due to the oil spill cleanup figured at all into these figures? . . . Were all the out of work people down there now floating boom for BP counted in these figures? If so it’s an awful way to have an uptick in jobs.

Posted by firstbridge | Report as abusive

As long as it’s due to a climbing participation rate, it boosts consumer demand, so even if you’re focussed on sort of a Keynesian view, this is progress. Still, I don’t think there’s any basis for looking for interest rate increases before the unemployment rate is actually falling (unless inflation somehow picks up without that).

Posted by dWj | Report as abusive

Felix: Perhaps you should ask yourself what’s standing in the way of robust job creation. It couldn’t possibly be Washington, now, could it? With tax hikes on the horizon to cover all that debt? A cap ‘n’ trade bill that is virtually guaranteed to kill jobs? All touted by a once-charismatic president who, to the best of my knowledge, never sold a widget or met a payroll or spent a day in the private sector in his entire life. But the MSM loves the guy so it couldn’t possibly be that? Cold comfort to the voters looking at lifetime on the dole.

Posted by Gotthardbahn | Report as abusive

Gotthardbahn: As a small business owner, the answer to what’s standing in the way of robust job creation couldn’t be more obvious: Banks simply refuse to loan any of the capital they are receiving at negligible interest rates from the government to small businesses to grow our payrolls.

Conspiracy theories about supposed fears of tax hikes or of healthy deficit spending during a recession are nothing but the ideological hobbyhorses of pseudo-intellectuals.

Posted by melior | Report as abusive

Jobs and corporate profits are back. If only the ECB could get its act together

Posted by STORYBURNcom2 | Report as abusive

“We’ll literally never find jobs for all of them”


I suspect the common man has no idea of all the work you’re doing on his behalf.

Posted by JoeP | Report as abusive

This govt and the last govt are both corrupt and bogus. They are not creating manufacturing. They are giving false hopes of job creation.

Unless we stop importing from countries with wages below US legal wages, jobs will not come back. All sectors depend on manufacturing jobs. GDP depends on manufacturing and export.

Both govts have not encouraged manufacturing.

Vote them out and protest against them.

Posted by NoImport911 | Report as abusive

High corporate profits do not mean jobs are on the horizon. It just means that companies have finally jettison enough people and sales have gone up a little which means they can do without repeating those mistakes of the past. The real problems are with the rest of the world and its not looking good. We do not have enough domestic product manufacturing and that accounts for retail sales rebounding yet jobs not rebounding. Too much made in other places. Too much debt with States and local governments will just create another wave of underemployed and unemployed too.

Posted by jscott418 | Report as abusive