The unemployment rate has fallen from 10 percent to 9.7 percent. But, like the fourth quarter growth number of 5.7 percent, it is hard to get excited about this number. Obviously it's good to have rising growth and falling unemployment. Yet the positive macro-economic numbers do not mesh with the everyday realities of many workers (and voters), who see a stagnant economy and a comatose job market. For instance, the percentage of people who have been out of work for 27 weeks or more rose to 41.2 percent in January. A record high.
Ed Morrissey notes that temporary help services (52,000), the retail trade sector (42,000), and the federal government (33,000) added the most jobs in January. David Leonhardt knows hope, but also cautions that "the job market is still a long ways from being so healthy." Paul Krugman just seems puzzled. And Keith Hennessey makes a salient point in an unrelated post:
Based entirely on numbers from the President’s just released budget, America will see the following results if all of his policies are implemented as proposed and work as projected:
- an average unemployment rate this year of 10.0 percent;
- an average unemployment rate in 2012 of 8.2 percent;
- a budget deficit this year of 8.3% of GDP;
- a budget deficit that at no point in the next decade dips below 3.6% of GDP;
- debt/GDP increasing from 64% now to 77% in ten years;
- the size of government, measured by both spending and taxes, climbing to historically high shares of GDP;
- three problems identified by the President (I do not necessarily agree that each of these is a problem):
- continuing the expensive Medicare drug program without paying for it;
- continuing the efforts in Iraq and expanding them in Afghanistan without paying for it;
- continuing much of the Bush tax relief without paying for it; and
- not measurably slowing the long-term growth of the major entitlement programs.
These are the results if the President’s policy program is successfully implemented.
Caveat to all economic commentary: It's important to recognize the limits of prediction. No one expected the unemployment rate to decline last month--but that did not stop it from doing so!
As long as unemployment is less than its peak (so far) of 10.2 percent by November 2012, the White House will be able to unfurl the "Morning in America" banners kept in cold storage at the National Archive.