New Republic: Can We Say “Recovery” Yet?
Filed by KOSU News in Business.
March 12, 2012
Jonathan Cohn is a senior editor at The New Republic.
So when do we start calling it a recovery?
This morning’s employment report from the Bureau of Labor Statistics shows that the economy added 227,000 jobs last month. The unemployment rate did not change: It’s still 8.3 percent. But that is not surprising and that is not necessarily bad news. When the economy recovers from a downturn, people who left the workforce start coming back, so that the jobless rate itself won’t decline (and may even increase) from time to time.
Meanwhile, BLS also revised last month’s employment figures. In January, according to the report, the economy actually added 284,400 jobs, which is 40,000 more than BLS had estimated originally.
This is third month in a row that the economy has added at least 200,000 jobs. It’s not ideal: At this rate, it will be many years before we regain all of the jobs that this recession destroyed. Far too many people are still struggling — and, from the looks of things, many of them are going to keep struggling for some time. But the steady rise in employment, coupled with a small increase in wages and other underlying indicators, suggests a true recovery is under way.
But don’t take it from me. Here, via e-mail, is Gary Burtless, the labor economist from Brookings:
“The latest numbers look like a continuation of the strong job gains we’ve seen since late last summer. For the third month in a row the employer survey shows payroll increases exceeding 200,000. The household survey indicates an even more impressive performance. The number of respondents in that survey who say they hold a job increased 428,000 in February. Making an adjustment for the new population weights in January, employment gains in the household survey have averaged 388,000 a month since October. We need between 90,000 and 100,000 additional jobs every month to keep up with the growth in the working-age population. Job gains since last summer have comfortably exceeded that threshold. The unemployment rate was unchanged in February, not because employment progress slowed, but because working-age Americans were streaming back into the workforce. Almost a half million adults entered the labor force last month, a number that somewhat exceeded the impressive gains in employment. It’s hard to see any weakening of recent positive trends in the February jobs report. The trend is very much in the right direction, but we have a long way to go to get back to full employment.”
Politically, this is obviously good news for the president and his party. The White House is too smart to take a victory lap: The possibility of slower growth later in the year, not to mention disruptive events in the Middle East or elsewhere, means future employment reports might not look so good.
But numbers like these put Obama in an awfully strong position to win reelection. And they should. Among other things, manufacturing jobs are on the rise again, many of them from the auto industry that Obama saved. The health care sector is still adding jobs, too: Apparently the industry knows something that Republicans don’t about the “jobs-killing” Affordable Care Act.
Speaking of the opposition party, its members are doing their best to downplay the report. Kevin Brady, a GOP congressman from Texas and vice chairman of the Joint Economic Committe, says:
“we still have a long way back to where we were before the last recession… I find it incredible that the Obama administration is attributing this all too slow increase in payroll jobs to its policies… A more accurate description of the economic news is that, any improvement that we are seeing is the result of the hard work of the American people and the resilience of the American economy, not from the administration’s policies, but in spite of them.”
Taking note of this quote, Dartmouth economist Andrew Samwick quips on his blog
“Shorter version? You are making inadequate progress getting us out of the hole we dug for you despite our opposition to every program you propose.”
One final though: For the last year, a persistent drag on the economy has been downsizing in the public sector. Once money from the Recovery Act dried up, local and state governments started laying off workers, which in addition to reducing the availability and quality of public services removed jobs from the economy even as the private sector was adding them. That seems finally to have ended. As Business Insiderobserves, state and local governments actually added 1,000 jobs last month.
It’s nothing compared to the number of public sector jobs that vanished in the last year. And, as Yahoo’s Dan Gross points out, public sector jobs account for a slightly smaller percentage of the workforce than they did at the beginning of Obama’s presidency. But something tells me that won’t stop Republicans from screaming about socialism. [Copyright 2012 The New Republic]