Big buzz today over the jobs number. The unemployment rate declined from 8.7 percent to 8.5 percent, a number derived from the so-called "household" survey from the Bureau of Labor Statistics, while the "establishment" survey saw an increase of 200,000 jobs.

Good news? Meh.This looks to be in line with the reports we have seen, more or less, over the last year, and an indication that we genuinely are in the midst of an employment depression.

First of all, the unemployment number is a huge analytical problem. It depends on worker psychology -- you have to be unemployed but looking for work to count as "unemployed." Even the so-called broader "U-6" number, which includes marginally attached people, depends on worker psychology. Both these numbers depend on worker psychology in a potentially "perverse" way: as optimism about job prospects wanes, these numbers can improve as people drop out of the workforce and thus no longer count as unemployed. Indeed, that is why today's number is at 8.5 percent -- if workers were as bullish about the job market as they were in December 2007, the unemployment rate would be something like 11.5 percent!

In my opinion, the best metric to track the unemployment rate based off the household survey is the employment-population ratio, which simply measures the percentage of adults who have jobs. Psychology does not enter into it. It's pure economics.

And as you can see, that number has basically been unchanged all year.

This suggests that we have had no statistically significant improvement in the jobs situation this year -- put another way, in all of 2011 we have only added enough jobs to keep up with population growth.

And this is an enormous problem. Why? Well, take a gander at the 10-year trend on the employment-populaiton ratio.

This is what a depression looks like! This is a solid 10 years of a labor market that is performing off its peak. And the monthly humming-and-hawing over the latest jobs numbers sure does seem silly when we look at the picture from here, as it becomes clear that for two years we have merely been skipping across the bottom.

Now, as for the "establishment" survey, which showed an increase of 200,000 jobs, the numbers are strikingly similar insofar as once again we have created just enough jobs to keep up with employment, but not nearly enough to soak up the slack in the labor market. We add about 140,000 people every month to the potential labor force, and this month the economy created 200,000 jobs, at least technically. The problem is that if you dig into the data you see that about 40,000 of those jobs are from some quirk that happens around the holidays because of FedEx and UPS. So, we actually created about 160,000 jobs, barely enough to keep pace with population growth. And the average this year in terms of monthly job creation was right around 140,000.

In other words, the best we can say about the employment picture in 2011 was that it did not get worse. We cannot say that it got any better.

As for the politics of this, the White House should not be high-fiving over this report, for it really is in line with the other weak reports we have seen all year. In particular, the headline reduction in the unemployment rate is really a mirage. If we correct for depressed workers, it means we'd be looking at a real rate of about 11.5 percent. The White House surely knows this, and they also must surely know that the political gains they get from weak reports looking stronger than they are (such as this one) will be paid back if the reports actually do get stronger: if the labor market genuinely does improve, discouraged workers will return to the workforce, and the unemployment rate will rise, even as things are getting better.

But more broadly, all of us -- Republicans and Democrats, conservatives and liberals -- need to get our minds around a simple fact: The jobs market is in a depression, and it has been for 10 years. If this continues, it is ultimately going to shift our entire political discussion. Remember, the last 70 years of political debate in this country, from about the end of World War II onwards, has been conducted with an economy that was slowly bringing more people into the workplace. In other words, there has been a real expansion in activity. But over the last 10 years, controlling for population, we have actually seen a 10 percent decline, and the best we can say about 2010-2011 is that we seem to have found a bottom. But the bottom is a terrible one, far too weak to support the kind of social welfare state that policymakers in the 1950s-1990s built under the assumption of an ever-expanding economic pie. If we cannot get back to that kind of growth, and soon, the political debate in this country is going to shift, in ways that will have far greater implications than who wins this November. Indeed, that victory might ultimately turn out to be pyrrhic.

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