Upbeat Jobs Report Based On Really Depressing News
The optimistic jobs report released Friday may be based on much drearier news.
“Total nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6 percent,” the U.S. Bureau of Labor Statistics reported on Friday.
Labor expert James Sherk, a senior policy analyst in labor economics at The Heritage Foundation, said taking a closer look at the report revealed that unemployment only fell so dramatically because many Americans left the labor force and are no longer being counted.
“Focusing on 25-54 year olds—often called ‘prime age workers’—finds their labor force participation rate remained constant while their unemployment rate fell by 0.1 points,” Sherk wrote in The Daily Signal. “Accounting for the ageing of the population roughly halves the reported December drop in unemployment and fully explains the drop in labor force participation.”
“Other details in the report also sounded troubling notes. Long-term unemployment did not drop in December. As in November, 2.8 million Americans remain unemployed for more than six months.
“The average duration of unemployment also remained nearly unchanged at 32.8 weeks—seven and a half months. Americans who lose their jobs take almost twice as long to find new ones as they did before the recession started,” Sherk explained.
“Moreover, average hourly earnings dropped 5 cents in December, almost entirely offsetting Novembers’ wage gains,” Sherk added. “Over the past year average hourly earnings have grown just 1.7 percent. Fortunately inflation has fallen so this represents modest growth in inflation-adjusted wages.”
Despite this, many have been expressing their excitement of what they see as great news.
“With the reporting of the December jobs numbers, we have every reason to be optimistic about the state of our growing U.S. economy,” Democratic Pennsylvania Rep. Chaka Fattah said in a press release. “The December jobs report showed that the private sector gained 240,000 jobs in December, with the unemployment rate dropping to 5.6%.”
“These numbers continue the longest streak on record—58 consecutive months of private sector job growth. Further, this final jobs report of the year underscores the sustained growth of the labor market over the last 12 months; 2014 has been the best year for job growth in 15 years with nearly 3 million jobs added,” he said.
House Speaker John Boehner noted that though he is optimistic about the report, he is still concerned about how many Americans are struggling.
“It’s always welcome news when more Americans find work,” Boehner said in a statement. “Yet while the economy is showing some signs of improvement, far too many middle-class families are struggling to bridge the gap between rising costs and stubbornly flat paychecks.”
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