Memory fades far too quickly. For nearly 16 million Americans, the November 2009 Unemployment report only partially told the story of how deeply the Great Recession had changed their lives. While economists looked at the November 2009 report showing a drop in unemployment from October’s 10.2% to 10%, that good news was not a Christmas message that brought much hope to the nation as a whole.
Fast forward a year later to December 2010 and the news was less encouraging. The official unemployment rate increased to 9.8% and the total jobs gained were 39,000, with 39,500 of those jobs being temporary. Yes, there were more temporary jobs created than the final tally of jobs.
In retrospect, the bad news of December 2010 might have led to the bi-partisan cooperation which led to the full extension of the Bush tax cuts, as well as agreement to extend unemployment benefits while enacting the Payroll Tax Holiday. This combination of fiscal stimulus is today at least partially credited for what became the 2011 December headline, “It’s a Christmas Miracle, Unemployment drops under 9% for the first time in 2 ½ years!”
The November 2011 report on unemployment at 8.6% showed a 0.4% decrease from 9% in October. American employers added a net 120,000 jobs in November, a significant improvement from the previous month’s gain of just 80,000.
Of course, even a year ago, our drop in unemployment did not bring all good news. It was noted the economy had added an average of 114,000 net jobs each month, barely enough to keep up with the population growth. With 14 million Americans out of work, the economy needed to add about 250,000 jobs a month to substantially bring down the unemployment rate even more, according to economists.
Which brings us quickly back to today’s announcement on the Unemployment rate for November 2012. There was little reason for surprise in today’s report. There was no “shocking increase or decrease” to be found. While there were the normal subtle differences between BLS’s Payroll Survey and ADP’s projections from their report on Wednesday, the differences were minimal.
What the November unemployment report does validate is that the nation’s recovery from the Great Recession remains tenuous at best. Coupled with last week’s release on 3rd quarter GDP growth of 2.7%, largely attributed to a spike in defense spending which accounted for nearly 1% of the total increase, America’s economy continues to largely stagnate.
The latest report on Unemployment combined with the 3rd quarter report on GDP will be used to support the president’s $200 billion combined request for further stimulus measures such as the Payroll Tax Holiday, extending unemployment benefits, Business Tax credits and a $50 billion infrastructure program.
Conversely, the opponents of further stimulus will note, “Does it make sense to raise taxes, propose additional stimulus spending and add another trillion to our deficit?”
No matter which side of this debate you find yourself on, the November unemployment results didn’t represent a Christmas miracle. America continues to have a long road ahead in producing the necessary economic demand to allow millions more of our fellow citizens to return to the work force.
What we can't forget is, for the 2,000,000+ Americans who did not have a job a year or two or three years ago being employed this Christmas season truly lends new meaning to the phrase Happy Holidays.