Obama's Job Creation Record

The full chart can be seen at http://my.democrats.org/Jobs-Chart.

The Obama administration feels the President's jobs record is being distorted by his Republican opponents. The Democratic Party distributed this information to try to set the record straight. The data are from the U.S. Bureau of Labor Statistics (BLS), the government agency that calculates and publishes the official record of labor market activity.

Note that this graph is for private sector jobs. If you take a closer look at the monthly labor reports you will see that government employment has been decreasing during much of this period. In other words, if the number of federal government jobs were not decreasing, the employment situation would be even better.

There is a legitimate debate to be had about the extent to which current policies have helped or hindered economic recovery. The Congressional Budget Office (CBO), the government agency of professional economists who advise all members of Congress about the impact of proposed policies, has consistently reported that recent government stimulus spending has aided the economic recovery and has improved U.S. employment from what it would have been in the absence of such spending. It is not a popular message with the opponents of the President. But it is consistent with mainstream economic theory.

Employment Situation - January 2012

The latest Employment Situation news release has been posted on the BLS website at http://www.bls.gov/news.release/pdf/empsit.pdf and also archived at http://www.bls.gov/news.release/archives/empsit_02032012.pdf. Highlights are below.

Payroll employment rises 243,000 in January; unemployment rate decreases to 8.3%

02/03/2012

Nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent. Job growth was widespread, with large gains in professional and business services, leisure and hospitality, and manufacturing.

Employment Situation - December 2011

The latest Employment Situation news release has been posted on the BLS website at http://www.bls.gov/news.release/pdf/empsit.pdf

and also archived at

http://www.bls.gov/news.release/archives/empsit_01062012.pdf.

Highlights are below.

Payroll employment rises 200,000 in December; jobless rate (8.5%) continues to trend down.

Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

EMPLOYMENT SITUATION - July 2011

THE EMPLOYMENT SITUATION -- JULY 2011

Total nonfarm payroll employment rose by 117,000 in July, and the unemployment rate was little changed at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, retail trade, manufacturing, and mining. Government employment continued to trend down.

Household Survey Data

The number of unemployed persons (13.9 million) and the unemployment rate (9.1 percent) changed little in July. Since April, the unemployment rate has shown little definitive movement. The labor force, at 153.2 million, was little changed in July. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men(9.0 percent), adult women (7.9 percent), teenagers (25.0 percent), whites (8.1 percent), blacks (15.9 percent), and Hispanics (11.3 percent) showed little or no change in July. The jobless rate for Asians was 7.7 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of persons unemployed for less than 5 weeks declined by 387,000 in July, mostly offsetting an increase in the prior month. The number of long-term unemployed (those jobless for 27 weeks and over), at 6.2 million, changed little over the month and accounted for 44.4 percent of the unemployed. (See table A-12.)

The civilian labor force participation rate edged down in July to 63.9 percent, and the employment-population ratio was little changed at 58.1 percent. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was about unchanged in July at 8.4 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In July, 2.8 million persons were marginally attached to the labor force, little changed from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 1.1 million discouraged workers in July, about the same as a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in July had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment increased by 117,000 in July, following little growth over the prior 2 months. Total private employment rose by 154,000 over the month, reflecting job gains in several major industries, including health care, retail trade, manufacturing, and mining. Government employment continued to decline. (See table B-1.)

Health care employment grew by 31,000 in July. Ambulatory health care services and hospitals each added 14,000 jobs over the month. Over the past 12 months, health care employment has grown by 299,000.

Retail trade added 26,000 jobs in July. Employment in health and personal care stores rose by 9,000 over the month with small increases distributed among several other retail industries. Employment in retail trade has increased by 228,000 since a recent low in December 2009.

Manufacturing employment increased in July (+24,000); nearly all of the increase was in durable goods manufacturing. Within durable goods, the motor vehicles and parts industry had fewer seasonal layoffs than typical for July, contributing to a seasonally adjusted employment increase of 12,000. Manufacturing has added 289,000 jobs since its most recent trough in December 2009, and durable goods manufacturing added 327,000 jobs during this period.

In July, employment in mining rose by 9,000; virtually all of the gain (+8,000) occurred in support activities for mining. Employment in mining has increased by 140,000 since a recent low in October 2009.

Employment in professional and technical services continued to trend up in July (+18,000). This industry has added 246,000 jobs since a recent low in March 2010. Employment in temporary help services changed little over the month and has shown little movement on net so far this year.

Elsewhere in the private sector, employment in construction, transportation and warehousing, information, financial activities, and leisure and hospitality changed little over the month.

Government employment continued to trend down over the month

(-37,000). Employment in state government decreased by 23,000, almost entirely due to a partial shutdown of the Minnesota state government. Employment in local government continued to wane over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged over the month at 34.3 hours. The manufacturing workweek and factory overtime for all employees also were unchanged at 40.3 hours and 3.1 hours, respectively. In July, the average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.6 hours for the sixth consecutive month. (See tables B-2 and B-7.)

In July, average hourly earnings for all employees on private nonfarm payrolls increased by 10 cents, or 0.4 percent, to $23.13. Over the past 12 months, average hourly earnings have increased by 2.3 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 8 cents, or 0.4 percent, to $19.52. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for May was revised from +25,000 to +53,000, and the change for June was revised from +18,000 to +46,000.

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The Employment Situation for August is scheduled to be released on Friday, September 2, 2011, at 8:30 a.m. (EDT).

Republican cuts would cost 700,000 jobs

In the March 1, 2009 article "Republican cuts would cost 700,000 jobs: Report," Zachary Roth reports that Mark Zandi, a prominent economic forecaster, suggests that the budget cuts proposed by Republicans will slow economic growth and reduce the number of jobs. The logic is that a primary determinant of the number of jobs is the overall demand for newly produced goods and services, which economists refer to as aggregate demand (AD). And a key source of demand, especially in economic downturns and their recoveries, is government purchases. Less government spending translates into less aggregate demand and fewer jobs.

According to Roth:

A new report by a leading economic forecaster finds that budget cuts passed by the House of Representatives would cost 700,000 jobs over the next two years if enacted.

"The House Republicans' proposal would reduce 2011 real GDP growth by 0.5% and 2012 growth by 0.2%," according to the study, by Moody's Analytics chief economist Mark Zandi. "This would mean some 400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012."

Zandi is no left-wing ideologue. He was on the economic team for Sen. John McCain's 2008 presidential campaign, and has advised members of both political parties. His findings point in the same direction as those of an even more pessimistic Goldman Sachs report, leaked last week, which concluded that the proposed cuts would reduce second- and third-quarter growth in 2010 by 1.5 to 2 percentage points.

Although the economy has been growing of late, it's not adding jobs fast enough to start significantly bringing down the unemployment rate, which stands at 9 percent. Writes Zandi: "Imposing additional government spending cuts before this has happened, as House Republicans want, would be taking an unnecessary chance with the recovery."

America already faces a jobs crisis, having lost around 8 million jobs since the start of the recession in late 2007.

Zandi argues that the government does need to cut spending--but that it should wait to do so until unemployment has come down further. "Significant government spending restraint is vital," he writes, "but given the economy's halting recovery, it would be counterproductive for that restraint to begin until the U.S. is creating enough jobs to lower the unemployment rate."

The House proposal cuts spending by around $60 billion from 2010 levels. The Senate and the Obama administration will weigh in before any cuts become law.

How to Read the Current Job Market

The unemployment rate increased to 9.6% in August 2010, but that may be a good indicator for job prospects in the near future if you understand how the statistic is calculated. .In the September 3, 2010 U.S. News & World Report article "5 Key Lessons in August's Jobs Report," Liz Wolgemuth provides some insight into why an increase in the unemployment rate might be a good signal for economic recovery.

August's jobs report is shining a little light on the ploddingly dreary labor market. Private employers added more jobs than economists expected last month, and the Labor Department revised the data to show bigger private sector gains for June and July. In July, private employers added 107,000 jobs, rather than the 71,000 initially reported. The unemployment rate last month ticked up to 9.6 percent from 9.5 percent in July, reflecting an increase in the size of the labor force.

This report offers some important lessons to help understand the current job market and how it's measured. Here are some things to keep in mind:

The headline number often doesn't mean much. The number of jobs lost or gained for the month will always be the first thing reported, but the truth is that it's often a very misleading figure. Let's look at August. Non-farm payroll employment fell by 54,000 jobs--that's the headline figure, and it's negative. More job losses are certainly the last thing anyone wishes to see at this point in the recovery. But if you look deeper, you'll see that the government cut 114,000 temporary census jobs last month. At the same time, total private sector employment increased by 67,000 jobs. Private-sector employment is the real barometer, not the sum of short-term government jobs.

Job numbers are just differences. Often, job data is reported in a way that can be confusing. Let's say a news report says "private sector employers added 67,000 jobs last month." That can sound a bit like all the private businesses in the country made just 67,000 hires altogether last month. In truth, American businesses hired millions of people last month. Consider that in June alone (the most recent month for which there is data) U.S. public and private employers made nearly 4.3 million hires. Retailers alone made 593,000 hires in June. The problem is that people lose or leave jobs in similar volumes. Economists call this "churn," and there's a lot of it--every month.

The long-term unemployed are missing out on the churn. Last month, there were 6.2 million people who had been out of work for six months or more. You might ask, given the millions of hires employers make each month, why some people have been unemployed for a year or two--or more: Wouldn't they eventually get caught up in the churn? This is one of the most troubling aspects of this recession. There could be several reasons. Many of the people struggling with long-term unemployment have found that their skills aren't matching up with what employers are looking for. Also, in general, the longer people are unemployed, the harder it is for them to find work, whether it's because they become stigmatized or because they are gradually become less aggressive job seekers. One possible policy response would be a tax credit for employers that hire a person who has been out of work for six or months or more.

A higher unemployment rate can actually be a good thing. Yes, this sounds ridiculous. Last month, the unemployment rate ticked up 0.1 percentage point to 9.6 percent. "It's worth noting that this was entirely attributable to a spike in the labor force--the household survey actually showed employment up 290,000 in August," Morgan Stanley economists Ted Wieseman and David Greenlaw said in morning note.

Consider an economy that's really in the dumps, with employers unwilling to hire. Hopeless job seekers run out of benefits and give up their job search instead relying on the income of a spouse or family member or another form of support. The people quitting their job search drive down the number of officially unemployed and shrink the labor force--and that can drive down the unemployment rate. Consider the opposite: Previously hopeless job seekers begin to see a better local job market, the headlines sound more promising, and their friends are beginning to find jobs, so they head back into the labor market. They pick up the phone and call a contact about an opening they spotted, or they fire off their resume online. They officially move back into the job market, but they aren't employed just yet--they're looking. This can drive the unemployment rate up, but it's a very positive thing for the economy that people are participating in the labor market again.

Back to August: "The labor force increased by 500,000 indicating that people are more encouraged about the labor market and decided to look for work boosting the jobless rate to 9.6 percent from 9.5 percent," says Sung Won Sohn, an economist at California State University-Channel Islands.

Slow growth will have Washington seeking stimulus. This may be a better-than-expected jobs report, but the job growth is still very small. The economy needs to be adding hundreds of thousands of jobs every month to absorb new people entering the job market and put the unemployed back to work. So lawmakers may be looking for more stimulus. "There is a good chance that the Obama Administration will introduce a set of targeted economic stimulus programs," Sohn says. "Payroll tax relief to encourage new hiring for small businesses is a good possibility. State and local governments are laying off employees as revenue falls. Some assistance from Washington could stem job losses here." Shortly after the release of the August jobs report Friday, President Obama encouraged lawmakers to pass a $55 billion bill that would provide additional loans to small businesses. Housing stimulus may also be coming--along with more unemployment benefit extensions, Sohn says.

7.9 million jobs lost, many forever

In the July 2, 2010 CNNMoney article "7.9 million jobs lost, many forever," Chris Isidore reports that many of the jobs lost recently will not return.

Job market not growing fast enough for big rebound

In the July 2, 2010 article "Job market not growing fast enough for big rebound," Associated Press economics writers Jeannine Aversa and Christopher S. Rugaber report:

WASHINGTON – A second straight month of lackluster hiring by American businesses is sapping strength from the economic rebound.

The jobless rate fell to 9.5 percent in June, still far too high to signal a healthy economy. It came in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed.

The private sector added just 83,000 jobs for the month. Looked at from that angle or almost any other, from a teetering housing market to falling factory orders, the recovery is limping along as it enters the year's second half. And that is when the benefits of most of the government's stimulus spending will begin to wear off.

The fate of the economy will hinge on whether it can stand on its own. President Barack Obama acknowledged the slow pace of the recovery and used the new jobs figures to argue for more stimulus spending and extended unemployment benefits.

"We're not headed there fast enough for a lot of Americans," the president said. "We're not headed there fast enough for me, either."

Overall, the nation's total payroll actually shrank last month by 125,000, the first decline in six months, the Labor Department said Friday. The loss reflected the end of 225,000 temporary jobs helping the U.S. Census Bureau complete its 10-year head count.

The 83,000 jobs added by the private sector was a better performance than in May, when private job creation nearly stalled. But it fell far short of what the economy needs — at least 200,000 jobs a month — to bring down the unemployment rate.

Nobody, from Obama to Federal Reserve Chairman Ben Bernanke to private economists, expects that anytime soon. And the government has mostly exhausted its realistic options for nudging the economy along faster.

Benchmark interest rates, which at low levels can encourage borrowing to spur economic growth, are already near zero. Republicans in Congress object to additional stimulus spending.

Unemployment is expected to stay above 9 percent through the midterm elections in November. And the Fed predicts joblessness could still be as high as 7.5 percent two years from now. Normal is considered closer to 6 percent, and economists say it will probably take until the middle of this decade to achieve that.

The jobless rate did come down in June from 9.7 percent the month before. But that was mainly because 652,000 people abandoned their job searches.

Even among Americans with secure jobs, confidence is fading. One gauge of consumer confidence fell in June to about 53, down nearly 10 points in a single month. And it's well below the reading of 90 typically seen in a healthy economy.

Add to that jitters over Europe's debts, an edgy stock market and cautious consumer spending, and the result is an economy essentially moving sideways. It's no surprise that businesses are reviewing their orders and seeing no reason to add to payrolls.

Few big companies say they plan to step up hiring in the second half of the year. Most auto, airline and railroad companies, for example, say they expect little or no job growth, blaming weak demand.

One that does plan to hire, Chrysler Group LLC, expects to add engineers and other workers as it updates its aging line of cars and trucks. The company has announced 1,000 factory jobs in Detroit to meet demand for the new Jeep Grand Cherokee SUV.

But other companies, like American Airlines, have no plans to significantly boost hiring this year. And major railroads, which have furloughed thousands since the recession, say they have no plans to add employees in the coming months.

In June, manufacturers, the leisure and hospitality industries, temporary staffing agencies, and education and health services providers all added jobs. Retailers, construction firms and financial service providers cut payrolls. So did state and local governments, which are wrestling with budget shortfalls.

On Wall Street, stocks sagged yet again on the news. The Dow Jones industrial average finished down 46 points, its seventh consecutive losing session. The Dow lost more than 10 percent of its value in the second quarter.

Trying to put a positive outlook on the report, Obama said it showed that "we are headed in the right direction." At the same time, he acknowledged there is a "great deal of work to do to repair the economy and get the American people back to work."

His options are limited. Senate Republicans concerned about record budget deficits this week blocked his efforts to extend unemployment benefits for millions of out-of-work Americans.

"The two things that are growing fastest in this Democrat economy are the size of the federal government and the crushing burden of the national debt," said Senate Republican leader Mitch McConnell of Kentucky, who led opposition to the extension.

All told, 14.6 million people were unemployed in June. An additional 11.2 million have given up their job searches or are working part-time but would prefer full-time work. That adds up to nearly 26 million Americans, and an "underemployment" rate of 16.5 percent.

Among the 225,000 census workers who lost their temporary jobs in June are people who had been unemployed before and now are again. One of them is Michael Stein, who worked for the census in Phoenix on and off since April 2009, after losing his job with an architectural firm.

It all ended for good two weeks ago.

Jobless again, Stein, 49, at least feels better off with the census experience on his resume.

"I was told the State of Arizona is hiring again," he said. "Because of the people I met at the census, there's a possibility if they could find the right position, they'll put in a good word for me."

Eric Model, co-owner of Seal & Co., a shop in Summit, N.J., that sells accessories and toys, said he has not replaced the two back-office workers he let go two years ago. Not including a summer hire, Model has four employees, plus himself.

"It would be nice to get some support," Model said. "But I don't want to go out on a limb and hire somebody, anticipating things will improve. I would rather run with low expenses."

Those Americans who still have jobs drew smaller paychecks last month. Average hourly wages fell 2 cents to $22.53. Workers' hours were cut, too. Those factors could dampen consumer spending in the months ahead and further weaken the recovery.

It all threatens to perpetuate a vicious cycle for the economy.

"It is a Catch-22 situation," said Sung Won Sohn, professor at California State University, Channel Islands. "Businesses are reluctant to hire for fear of a 'double-dip' recession. Without jobs, people are watchful of their spending, a danger to the recovery."

Employment Situation News Release

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The latest Employment Situation news release (http://www.bls.gov/news.release/pdf/empsit.pdf) was issued today by the Bureau of Labor Statistics. Highlights are below.
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Nonfarm payroll employment rose by 290,000 in April, the unemployment rate edged up to 9.9 percent, and the labor force increased sharply. Job gains occurred in manufacturing, professional and business services, health care, and leisure and
hospitality. Federal government employment also rose, reflecting continued hiring of temporary workers for Census 2010.
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News releases archives:
http://www.bls.gov/schedule/archives/all_nr.htm
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Young war veterans returning home to unemployment

In the March 12, 2010 article "Young war veterans returning home to unemployment," Associated Press writer Kimberly Hefling reports:

WASHINGTON – The unemployment rate last year for young Iraq and Afghanistan veterans hit 21.1 percent, the Labor Department said Friday, reflecting a tough obstacle combat veterans face as they make the transition home from war.

The number was well above the 16.6 percent jobless rate for non-veterans of the same ages, 18 to 24.

As of last year, 1.9 million veterans had deployed for the wars since the Sept. 11, 2001, terrorist attacks. Some have struggled with mental health problems, addictions, and homelessness as they return home. Difficulty finding work can make the adjustment that much harder.

The just-released rate for young veterans was significantly higher than the unemployment rate of young veterans in that age group of 14.1 percent in 2008.

Many of the unemployed are members of the Guard and Reserves who have deployed multiple times, said Joseph Sharpe, director of the economic division at the American Legion. Sharpe said some come home to find their jobs have been eliminated because the company has downsized. Other companies may not want to hire someone who could deploy again or will have medical appointments because of war-related health problems, he said.

"It's a horrible environment because if you're a reservist and you're being deployed two or three times in a five-year period, you know you're less competitive," Sharpe said. "Many companies that are already hurting are reluctant to hire you and time kind of moves on once you're deployed."

One veteran looking for work is Dario DiBattista, 26, of Abingdon, Md., a graduate student who did two tours in Iraq in the Marine Reserves with a civil affairs unit. He said he's found that a lot of military skills don't readily transfer into the workplace, and in many cases, there aren't jobs to apply for even if companies want to hire veterans.

"If you don't have a strong family support system ... it's hard to get over the hump to make the decision of where you're going to live, what you do for work, where you're going to go to school, if you can even qualify to get into school," DiBattista said.

Justin Wilcox, a 30-year-old Iraq veteran who is participating in a work-study program at a vet center operated by the Veterans Affairs Department in Charleston, W.Va., said he hasn't just had problems finding jobs, but keeping them. He's done work as a coal miner, as a salesman selling drill bits and in other positions, but he said mental health problems stemming from the war with side effects such as anger and difficulty concentrating have made it difficult.

There's a lack of understanding about the needs some veterans have, said Wilcox, who is studying to become a teacher.

"Basically, it's been a real hard time for me. Because when I do get a job, it's not a real high paying job," Wilcox said. "I have a difficult time relating to people and ... one job that I had that paid really good, I couldn't comprehend what I was supposed to do and how I was supposed to do it."

For veterans of all ages from the recent wars, the unemployment rate in 2009 was 10.2 percent. Historically, younger veterans have had more difficulty than their older counterparts finding a job because they often have less training and job experience. Some joined the military right out of high school.

Lisa Rosser, an Army veteran and company owner who sits on the advisory board of the Call of Duty Endowment that funds projects focused on veterans employment issues, said she encourages veterans to emphasize to prospective employers what they learned about managing people in a stressful combat environment.

"If they talk about their general leadership skills and their ability to supervise and to manage people, especially at a very young age, that is a good sell ... because the average 24-year-old and 27-year-old in the military has similar supervisory and managerial experience as someone in their 30s on the civilian side," Rosser said.

One possible solution is to make it easier for veterans to transfer certifications they have for jobs they did in the military into the civilian workforce, Sharpe said.

The Labor and Veterans Affairs departments have a variety of programs addressing the problem, including one that educates employers about how to work with veterans with special needs. The hope is that another program, the Post-9/11 GI Bill rolled out last year, will be particularly effective. Under it, $78 billion is expected to be paid out in education benefits over the next decade for veterans of the recent wars to attend school.

The national unemployment rate last year was 9.3 percent, the highest since 1983.
____
On the Net:
Department of Labor: http://www.dol.gov/
Department of Veterans Affairs: http://www.va.gov/
Call of Duty Endowment: http://www.callofdutyendowment.org/
American Legion: http://www.legion.org/

Why Politicians Can't Create Real Jobs

In the February 16, 2010 U.S. News & World Report article "Why Politicians Can't Create Real Jobs," Rick Newman says "The history of recessions offers some unwelcome news for all those in Washington who think they have the power to boost hiring."

Jobs used to return quickly after recessions. After the downturn that ended in 1975, it took only two months for the unemployment rate to peak and then start falling. In 1982, unemployment peaked the very same month that the recession ended and then dropped as sharply as it had risen. That was when the U.S. economy was less globalized and more self-contained. Foreign companies found it difficult to compete with American ones. When recessions ended, things went back to normal and many employers simply rehired the people they had laid off.

That's not how it works anymore. After the 1991 recession, it took 15 months for the unemployment rate to peak and net job growth to resume. After the 2001 recession, it took 19 months. Technology is one reason; it allows firms to be more productive with fewer workers and put off hiring once a recovery begins. Globalization also allows firms to replace expensive American workers with cheaper ones overseas, and there's no better pretext for paring labor costs than a grueling recession.

Jobless recoveries are now the norm. And that's what we're in right now. The official arbiters haven't yet declared when (or if) the recession has technically ended, but many economists date the end of the recession to around August 2009. The economy is growing again, following the steepest decline since the Depression—but it's not adding new jobs. And the recent recession was obviously far worse than the fairly mild ones in 1991 and 2001. So the politicians are on the case, with plans to spend billions more to encourage firms to start hiring.

The general idea is that business-tax breaks specifically linked to new hires will lower the cost of adding employees, so more firms will boost their payrolls. To be fair, it might have some effect. Moody's Economy.com estimates that an aggressive jobs program could help create a maximum of 727,000 jobs, while a more modest effort could create up to 250,000 jobs. But even the most optimistic outcome would be a drop in an ocean of unemployed, amounting to less than 10 percent of the 8.4 million jobs lost since the recession began. And it could be much less effective than that, since job-based tax credits are uncommon and unproven.

One approach is to forgive $5,000 worth of payroll taxes for every new hire, which doesn't add up to much for a typical company. Think of it this way: If the average worker costs about $50,000 per year in pay and those ever costlier benefits, the tax credit would (temporarily) lower the payroll cost of a new employee by 10 percent. When was the last time a 10 percent discount persuaded you to buy something you wouldn't have purchased otherwise?

It's also worth reviewing the trillions that have already been spent to aid the economy—leaving unemployment close to 10 percent. The first stimulus package, now forgotten, was a $168 billion tax rebate President Bush signed in 2008. That was supposed to boost consumer spending, and thus jobs, by putting some extra cash into consumers' pockets. It ended up being as effective as an umbrella in a hurricane.

The following year came the $787 billion Obama stimulus plan, which aimed to create or save 3.5 million jobs through a combination of tax cuts and government spending. The White House says it has nearly accomplished that, though others think the claim is wildly inflated. Whatever the number of jobs, they may disappear anyway once the stimulus money runs out. Many are teaching, public-service, or construction jobs funded by state governments, and states are in desperate shape; as federal aid recedes, they'll be forced to cut.

Then there were the bank bailouts and other measures meant to stabilize the financial markets, stimulate lending, and … create jobs. They did help stabilize the markets, but the buck stopped there. Lending remains far from normal—one of the biggest drags on economic growth—and firms that can't get loans aren't likely to hire.

There's also a misperception that Washington can somehow control the overall direction of the economy through a few tweaks in the tax code. Not even close. For the economy to get back on track, hiring needs to resume in the industries with the most jobs, and many of them—such as housing, construction, real estate, retail, and even financial services—seem to be in the midst of long-term contraction. No business is going to ramp up hiring if revenue is falling and there's no pickup in sight, regardless of the tax savings.

Other industries are subject to transformative forces far stronger than any counterforces the government can mount. The manufacturing sector has lost 2.2 million jobs since 2007, for example, and many of those are probably gone for good, outsourced to cheaper countries or replaced by technology, producing corporate savings that far outstrip any tax credit.

Obama also wants to keep investing government money in futuristic fields like clean energy and green technology, which is probably smart, but the payoff will be relatively modest. "These industries are too small to create the millions of jobs that are needed right away," write James Manyika and Byron Auguste of the McKinsey Global Institute. They point out that the clean-tech industry—things like wind turbines and solar panels—accounts for just 0.6 percent of the U.S. workforce. Two other high-wage industries targeted for growth—semiconductors and biotech—add up to less than 1 percent of the workforce. Growth in those industries does generate a collateral gain elsewhere in the economy but not nearly enough to correct a massive unemployment problem.

Obama tacitly acknowledges that there's not much more the government can do about jobs. The president's 2010 economic report contains dreadful projections about the labor market, predicting that the unemployment rate will average 10 percent this year, 9.2 percent in 2011, and 8.2 percent in 2012. That portends a stark, sustained drop in living standards for many Americans. And, hope being audacious, every White House leans toward rosy economic projections. Moody's Economy.com predicts that unemployment will peak at close to 11 percent this year, and some economists see it going higher than that. The politicians might get credit for trying, if they're lucky, but they're just about out of tricks.

U.S. economy loses 85,000 jobs in December; unemployment rate remains at 10%

In the January 8, 2010 article "Economy loses 85K jobs, unemployment rate steady," Associated Press economics writer Christopher Rugaber summarizes the U.S. Bureau of Labor Statistic's employment situation report for December 2009. The BLS publishes its Employment Situation Summary on the first Friday of each month. It also provides other extensive U.S. labor market data.

WASHINGTON – Lack of confidence in the economic recovery led employers to shed a more-than-expected 85,000 jobs in December even as the unemployment rate held at 10 percent. The rate would have been higher if more people had been looking for work instead of leaving the labor force because they can't find jobs.

The sharp drop in the work force — 661,000 fewer people — showed that more of the jobless are giving up on their search for work. Once people stop looking for jobs, they are no longer counted among the unemployed.

When discouraged workers and part-time workers who would prefer full-time jobs are included, the so-called "underemployment" rate in December rose to 17.3 percent, from 17.2 percent in November. That's just below a revised figure of 17.4 percent in October, the highest on records dating from 1994.

Many analysts had hoped Friday's report would show the economy gained jobs for the first time in two years. While the revised figures found an increase in November, it was tiny. Job openings remain far too few.

"One word sums it up: Disappointment," said Jonathan Basile, an economist at Credit Suisse.

Referring to the drop in the labor force, Basile said, "that tells me that Main Street doesn't believe there's a recovery yet, because they're not out looking for jobs yet."

Revisions to the previous two months' data showed the economy actually generated 4,000 jobs in November, the first gain in nearly two years. But the revisions showed it also lost 16,000 more jobs than previously estimated in October.

The report caps a disastrous year for U.S. workers. Employers cut 4.2 million jobs in 2009. And the unemployment rate averaged 9.3 percent. That compares with an average of 5.8 percent in 2008 and 4.6 percent in 2007. Nearly 15.3 million people are unemployed, an increase of 3.9 million during 2009.

"The economy is in a rough situation," Labor Secretary Hilda Solis acknowledged in an interview with The Associated Press. She said she thinks companies are reluctant to ramp up hiring because they're waiting to see what new stimulative steps the government might take to provide relief.

The economy has lost more than 8 million jobs since the recession began in December 2007. And while layoffs have slowed, they haven't ended. UPS said Friday it will cut 1,800 jobs. And defense contractor Lockheed Martin Corp. said this week it is cutting 1,200 workers.

Most economists worry that 2010 won't be much better. Federal Reserve officials, in a meeting last month, expressed concern that unemployment will decline "only gradually," according to minutes of the meeting released earlier this week.

If jobs remain scarce, consumer confidence and spending could flag, potentially slowing the economic recovery. Many analysts estimate the economy grew by 4 percent or more at an annual rate in the October-December quarter, after 2.2 percent growth in the third quarter.

But the economy will need to grow faster than that to bring down the unemployment rate. And economists worry that much of the recovery stems from temporary factors, such as government stimulus efforts and businesses rebuilding inventories.

Debra Winchell has been seeking work since last January, when she lost her job as an administrative assistant at the health insurance company. Winchell, 50, of Latham, N.Y., said she's seen an uptick in online job postings, giving her some hope. But they're for jobs paying as little as $10. And she's still not getting any callbacks when she does apply.

With her unemployment benefits set to run out this spring, Winchell, who is single, said she will reluctantly sign up for temporary work.

"I'll be lucky if it pays the bills," she said.

Still, some economists said a recent trend of improvement remains in place. The economy lost an average of nearly 700,000 jobs in the first three months of last year, a figure that dropped to 69,000 in the fourth quarter.

And the private service sector added jobs for the second straight month, said Nigel Gault, chief U.S. economist at Global Insight, though the gains have been concentrated in temporary workers.

"Firms are still being very cautious, so the first thing they are turning to aren't full-time employees, but temps," he said. Companies have added about 166,000 temp workers since July.

The average work week remained unchanged at 33.2 hours, near October's record low of 33. Most economists hoped that would increase, as employers are likely to add hours for their current employees before hiring new workers.

Job losses remained widespread: manufacturing lost 27,000 jobs and construction shed 53,000, while retailers, the leisure and hospitality industries and government also cut workers.

High Unemployment is Associated with Increases in Crimes - Such as Cattle Rustling

In the January 3, 2009 article "Rustlers ride wideopen range of Great Basin," Associated Press writer Jeff Barnard reports:

FRENCHGLEN, Ore. – Cruising down a two-lane blacktop where the Catlow Rim drops down into a broad valley of sagebrush and bunchgrass, ranch manager Stacy Davies pulls his pickup over to let pass a herd of young bulls being trailed along the road by a couple of his buckaroos, as ranch hands are called here.

Arriving at the corrals at Three Mile Creek, Davies opens the tailgate on the gooseneck trailer hitched to his pickup, leads his horse into the cold hard sunshine, and swings up into the saddle to cut out cattle destined for shipment to market.

Two springs ago, Davies pulled up to these same corrals to find that dozens of weaned calves were gone, rustled, with truck tracks half-stomped by the remaining cattle the only clue to what had happened.

Out of pride and a reluctance to point a finger at neighbors, ranchers in the vast Great Basin outback where Oregon, Idaho and Nevada come together have been slow to admit that someone in their midst, perhaps even someone they know from barbecues and brandings, has been stealing cattle. Just who is doing it, and how they have gotten away with it for at least three years, remains a mystery.

"There's a lot of men who have worked these various ranches, moved from ranch to ranch and know this country well, who would be capable of such activity," said Davies, manager of Roaring Springs Ranch, which covers 1.1 million acres of private and federal range. "They know when we are at ballgames, they know when we're at church. They know where the animals are at."

Last summer, pushed by Jordan Valley rancher Bob Skinner, a past president of the Oregon Cattlemen's Association, ranchers overcame their reluctance to talk and started sharing information with law enforcement and each other. It quickly became clear that more than 1,200 cattle worth about $1 million had disappeared, far more than could be accounted for by the bones that dot this harsh country, or strays joining a neighbor's herd.

That would make this the rustling hotspot of the nation, said Rick Wahlert, Colorado state brand commissioner and secretary of the International Livestock Identification Association. The group's members in 20 states and three Canadian provinces have reported about 500 cattle thefts a year the past two years, up from 150 a year.

The association believes the jump in rustling is apparently spurred by the hard economic times, he said.

Rancher Skinner urged an aggressive new attitude among his far-flung neighbors, and he organized regular meetings to raise the profile on rustling. Once the cattlemen began admitting their losses, the numbers snowballed. The county sheriffs realized for the first time they had a major problem.

"Cattle theft — rustling — is not just something you read about in old Western magazines or watch in the Western movies you see," said Ed Kilgore, sheriff of Nevada's Humboldt County. "I really believe it's going on with people riding horses like in the old days, gathering cattle and taking them to a place they can load them up on transport."

With cows worth as much as $1,200 apiece, and calves $650, the losses mounted quickly, Skinner said. Despite struggling with their losses and the recession, ranchers have kicked in close to $60,000 in reward money to back a wanted poster circulating with the brands of stolen cattle.

Ranchers are keeping closer watch on their cattle, even with hidden cameras, and taking counts every time a herd moves through a gate, so they can report a theft sooner.

"The worst thing we can do is just to not say anything and hope they show up, then four or five or who knows how many months later go, 'Oh my gosh, I'm missing a bunch,' and by then there's no more smoking trail," Skinner said.

Once the stolen cattle are loaded on a truck, there is no telling where they might end up. They could be driven in a matter of hours to be sold in a state like Kansas with no brand laws, said Wahlert.

Or they could be hidden out in a remote pasture to produce their calves year after year, which could easily be branded and sold, said Idaho brand inspector Larry Hayhurst.

"There are a lot of ways to beat the system," he said.

This high desert country has fed cows since the early 1870s, when California cattle barons who struck it rich feeding gold miners first trailed their herds here. Even today, cattle outnumber people 1,000 to one, and it can take 40 acres to feed one cow and its calf for a month.

Buckaroos, a corruption of the Spanish word vaquero, follow many of the Old California traditions, braiding their own bridles and hackamores, and throwing long ropes that give them more room to slow a calf without hurting their horse.

Bred cows are turned loose on rangeland far from home and left on their own for months at a time. The only good count of what the weather, predators, disease, poisonous weeds and now rustlers have left comes at the fall gather.

Kilgore said they have established the rustling is real, but have little hard evidence to target any suspects.

The Roaring Springs theft from corrals next to a paved highway was the exception. Most cattle have disappeared from remote valleys where no one lays eyes on them for months at a time.

Jordan Valley ranchers Rand and Jane Collins swim their cows across the Owyhee River to get them to their federal allotment in February, and don't see them again until June or July, when they brand the new calves.

Rand Collins figures about 90 mother cows were stolen in the spring of 2007, though it was fall before he could be sure they weren't just lost. All carried the box-slash brand — a square with a diagonal line inside. The fact the cows had yet to drop their calves made them easier to handle on the long drive _three to five days — to a gravel road where they could be loaded on trucks. And it gave the rustlers 90 calves with no brands.

"It's not the kind of thing you like to admit," Rand Collins said. "There's always the chance as the season goes along that the cattle will turn up, and then you look like a fool for crying wolf."

Malheur County Sheriff Andrew Bentz figures the rustlers are a small group, more like a family than a gang, with the horseback skills to drive a herd hundreds of miles in rough country to read a road good enough to handle a cattle truck.

Chances of catching them in the act are slim in this wide-open country, he said.

"It's a long and methodical process of following money and the animals themselves," he said. "When the rustlers are named the people who are arrested will be no surprise to anybody. Nobody falls in out of Mars and takes care of this business."

When the fall gather came in this year, the losses appeared to be down, leading several ranchers to figure the rustlers are feeling the heat and laying low.

"We catch guys stealing stuff all the time. Those are onesy-twosy guys," said Idaho Brand Inspector Larry Hayhurst. "This is something different.

"They have a system down to beat this system. They have it figured out. We've just got to figure out what they're doing. Sooner or later we'll find out."

Even as economy mends, a jobless decade may loom

In the December 26, 2009 article "Even as economy mends, a jobless decade may loom," Associated Press economics writer Jeannine Aversa reports the United States could have high unemployment rates until at least 2015. Last year I cautioned that whoever won the 2008 U.S. Presidential election would endure a prolonged economic slowdown and would probably receive more blame than he or she deserves. We will see.

WASHINGTON (AP) -- Call it the Terrible Teens.

The decade ahead could be a brutal one for America's unemployed -- and for people with jobs hoping for pay raises.

At best, it could take until the middle of the decade for the nation to generate enough jobs to drive down the unemployment rate to a normal 5 or 6 percent and keep it there. At worst, that won't happen until much later -- perhaps not until the next decade.

The deepest and most enduring recession since the 1930s has battered America's work force.

The unemployed number 15.4 million. The jobless rate is 10 percent. More than 7 million jobs have vanished. People out of work at least six months number a record 5.9 million. And household income, adjusted for inflation, has shrunk in the past decade.

Most economists say it could take at least until 2015 for the unemployment rate to drop down to a historically more normal 5.5 percent. And with the job market likely to stay weak, some also foresee another decade of wage stagnation.

Even though the economy will likely keep growing, the pace is expected to be plodding. That will make employers reluctant to hire. Further contributing to high unemployment is the likelihood of more people competing for jobs, baby boomers delaying retirement and interest rates edging higher.

All this would come after a decade that created relatively few jobs: a net total of just 464,000. By contrast, 21.7 million new jobs were generated between 1989 and 1999.

Economist David Levy, chairman of the Jerome Levy Forecasting Center, says the country faces a new era of chronically high unemployment, averaging 8 percent or more over the next decade.

The "New Abnormal," he calls it.

Levy thinks the New Abnormal also means average pay will dwindle, along with consumer prices. That would make it harder for households to pay down debt, he warns.

By the Federal Reserve's reckoning, the jobless rate could remain as high as 7.6 percent in 2012. And it would take two or three years after that for the job market to return to normal, the Fed says.

It's possible jobs won't return to pre-recession levels at any point over the next 10 years, Levy says.

That's mainly because the economy's recovery, sluggish by historical standards, isn't expected to regain its vigor over the next few years. As a result, companies will be in no rush to ramp up hiring.

Other analysts think the economy will recover the jobs wiped out by the recession by 2013 or 2014 but that the unemployment rate will stay high. They note that the healing economy will cause more people to stream back into the labor force, vying for too-few jobs.

In addition, baby boomers whose retirement accounts have shrunk could put off retiring and stay in the work force longer. That would leave fewer positions available for the unemployed.

Other contributing forces -- businesses squeezing more work from employees they still have and relying more on part-time and overseas help -- have intensified. And record-high federal budget deficits and the threat of inflation could drive up interest rates, which could hobble growth and restrict job creation.

All those factors could combine to keep unemployment high.

"It will be the mother of all jobless recoveries," predicts economic historian John Steel Gordon.

On the other hand, it's possible some technological innovation not yet envisioned could generate a wave of jobs. Yet at the moment, most economists aren't betting that any such breakthroughs will rescue the labor market.

The last time the jobless rate reached double digits, in the early 1980s, it took six years to bring it down to normal levels.

Unemployment hit a post-World War II high of 10.8 percent at the end of 1982 as the country was emerging from a severe recession. The rate fell to around 5 percent in 1988. It took less than two years for the number of jobs to return to its pre-recession level.

In this recovery, the economy is far more fragile.

Hard-to-get credit is exerting a drag. Wounds from the banking system's worst crisis since the Great Depression will take years to fully heal. People and companies, scarred by the crisis, are likely to restrain borrowing, spending and investing.

Some analysts think the jobless rate might have already peaked at 10.2 percent in October. But most economists predict the rate will peak at around 10.5 percent by the middle of next year.

"We are digging out of a very deep hole," says Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego and chief economist for the National Association for Business Economics.

Reaser estimates it will take until 2015 for the unemployment rate to drop to 5.5 percent.

A sputtering job market carries other consequences. One is flat wages. When many people compete for few jobs, employers have no incentive to raise pay.

The economic shocks of the past decade already have cut into Americans' incomes. That's among the reasons why people feel they're standing still economically.

Median household income, adjusted for inflation, fell to $50,303 in 2008, according to the U.S. Census. That gauge combines wages and salaries, investment income and government benefit payments like Social Security. It's down 4 percent from a peak of $52,587 in 1999, when incomes were bolstered by stock gains from the dot-com boom.

That bubble burst in 2000. Since then, workers have seen meager wage gains. Adjusted for inflation, wages grew about 13 percent in the past 10 years -- the slowest pace in five decades, according to calculations made by Scott Hoyt of Moody's Economy.com.

That trend is predicted to continue.

"There will be a continued hollowing-out of the middle class," says H.W. Brands, a historian at the University of Texas.

He points to productivity growth, which has let companies produce more with leaner work forces, the offshoring of service-sector jobs and the shrinking of factory jobs.

That's why Vicki Adriano, 51, who works at a General Motors plant in Lordstown, Ohio, looks ahead to the coming decade with trepidation.

The economic wreckage of the past year means she'll probably have to work longer than she had expected at the factory-- at least seven more years. She frets about the loss of economic security.

"Everything you worked for all those years can be gone in a minute," she says.

Geithner: Job growth should resume by springtime

According to the December 23, 2009 article "Geithner: Job growth should resume by springtime":

WASHINGTON – Treasury Secretary Timothy Geithner says he believes it's reasonable to expect "positive job growth" by spring and that people should have confidence about an improving economic climate.

In an interview broadcast on ABC's "Good Morning America," Geithner (GYT'-nur) also said he believes many banks around the country still have work ahead of them to regain the public's faith. He said, "They need to work very hard to shore it up" and said he wasn't certain that "all banks get it."

Geithner's stewardship of the Treasury has come in for criticism on occasion. He said Wednesday, "I think most people would say the economy actually is strengthening now going into the end of the year," but that the key is to regain lost jobs.

The Real Jobless Rate

In the December 21, 2009 TIME magazine article "The Real Jobless Rate," Justin Fox explains why the unemployment rate may not be the best measure of labor market conditions.

At 8:30 on the morning of the first Friday in December, the Bureau of Labor Statistics (BLS) reported that the unemployment rate had fallen to 10% in November from 10.2% the month before. Hooray! Headlines heralded the unexpected drop. Stock prices surged. Enthused White House press secretary Robert Gibbs: "We're moving in the right direction."

By late morning, though, stocks were slumping. Commentators began to focus on concerns with the numbers. By the following Monday, Federal Reserve Chairman Ben Bernanke was warning that "we still have some way to go before we can be assured that the recovery will be self-sustaining."

So much for that fall in unemployment, huh? It was a telling reaction, indicative of the still gloomy national mood, the perceived fickleness of monthly economic indicators — and the diminished status of the unemployment rate as a statistic. Once the indispensable, largely unquestioned measure of the state of the job market, it is now treated with suspicion and disdain. With good reason, because the unemployment rate fails to accurately reflect just how bad things are out there.

Each month, interviewers contact 60,000 households — most by phone, some in person — and ask about the employment status of household members age 16 and over. Those who don't have jobs but have looked in the past four weeks are classified as unemployed. After some statistical adjustments to extrapolate the data from those 60,000 households to the total U.S. population, the number of unemployed is divided by the size of the labor force (employed plus unemployed), and there's your rate. Measured that way, unemployment still isn't as bad as it was at the lowest point of the 1981-82 recession, when it hit 10.8%. And it's nowhere near what it was in 1933, when the rate peaked somewhere around 25%.

This method of calculating unemployment was pioneered by the head of the Massachusetts Bureau of Statistics of Labor in 1878, and it has its merits. It's simple. It's straightforward. And it provides a pretty accurate count of those who really, really want jobs. But it also misses millions of people who may not be actively looking for a job but would happily take one if offered. Those ranks surely swell in a deep recession or during a time of economic turmoil that destroys entire job categories (like autoworker). The government's statisticians are aware of this, and since the 1970s the BLS has published broader measures of unemployment that include at least some of these people. In 1994 the broadest measure — which counts as unemployed those who have looked for work in the past year but not the past four weeks, plus part-time workers who would rather be working full time — was dubbed U-6 unemployment. During this recession, it has gotten far more attention than ever before. U-6 unemployment was at 17.2% in November, down from 17.5% the month before and up from 8.4% two years ago. These figures aren't strictly comparable with those from before 1994, but the New York Times has taken a stab at recalculating the earlier numbers — with help from the BLS — and estimates that U-6 unemployment peaked in December 1982 at 17.1%. Meaning this recession is worse.

Even these figures leave out people who say they want a job but haven't looked in the past year. Economist and gadfly John Williams, whose online newsletter Shadow Government Statistics has gained a big following lately, adds them in, makes a few tweaks and gets to 21.8% unemployment in November, down from 22.1% in October.

Such measures still rely on people's own assessment of whether they want to work. A BLS study a decade ago found that these self-assessments aren't all that reliable. So how about the simplest possible job-market measure, the employment-to-population ratio? Among Americans ages 25 to 54, it was at 75.1% in November, down from 80.3% in early 2007 and — with the exception of October's 75% — the lowest it's been since 1984. Because of the entry of women into the workforce, the ratio trended upward from the 1960s through the 1990s. If you look just at men ages 25 to 54, the picture is much more dire. Their employment-to-population ratio of 80.6% in November is the lowest since the BLS began keeping track in 1948. It's 4 percentage points lower than it was in the depths of the early-1980s downturn.

There are certainly other factors at play here besides just a tough job market — more stay-at-home dads, more rich loafers, more prison inmates. But it also may be a sign that these are in fact the worst times for American workers since the 1930s. Which helps explain why there was so little excitement about that drop in the unemployment rate to 10%.

Drop in Unemployment Rate May Reflect More Discouraged Workers Rather than Increased Employment

Photo by Scott Olson/Getty Images.

In the December 18, 2009 article "Fewer States Add Jobs As Recovery Sputters Along," Associated Press business writer Daniel Wagner reports that recent declines in the unemployment rate may reflect an increase in discouraged workers who have stopped looking for jobs rather than a significant increase in employment.

WASHINGTON -- In a reversal of earlier gains, more states lost jobs than added them in November, signaling that hiring is occurring only sporadically around the country.

Unemployment rates dropped in 36 states and the District of Columbia, but that trend appeared to reflect more people leaving the work force. Unemployed people who stop looking for jobs out of frustration aren't counted in the labor force.

Friday's Labor Department report underscored that employers have yet to ramp up hiring, and many Americans can't find work. The number of people jobless for at least six months rose last month to 5.9 million, according to a separate report released earlier this month. And the average length of unemployment exceeds 28 weeks, the longest on records dating to 1948.

It was the first time since April that more states' unemployment rates fell than rose. But two states, South Carolina and Florida, saw joblessness reach its highest point in 25 years. And economists say most states' unemployment rates will rise as the stimulus programs wind down and seasonal jobs taper off.

"Even though things are getting better, they're not getting better fast enough to keep unemployment from rising in the next six to nine months," said Mark Vitner, senior economist at Wells Fargo & Co.

Vitner said he expects unemployment nationally and in most states to continue inching up before cresting in about nine months. He predicts it will be six more months before there are any consistent job gains.

In all, 19 states added jobs in November, down from 28 in October. Thirty-one states and the District of Columbia suffered a net loss of jobs.

Labor said there were statistically important employment changes in four states. All four showed job losses. They are Michigan, Nevada, Mississippi and Hawaii.

The states that reported the largest jobs gains were Texas, Ohio, Georgia, Arizona and Iowa. Those shifts were not considered statistically important as a proportion of those states' large work forces.

Signs emerged in some states of people rejoining the work force to seek jobs as the economy slowly improves. Of the eight states where unemployment rose, five added jobs. All but one saw their work forces grow, indicating more people were looking for work.

The states that saw their labor forces grow faster than they could add jobs were Ohio, South Carolina, Georgia and Idaho.

"Now that the economy is stabilizing, we're seeing more people come back into the work force and looking for jobs," Vitner said. "The net effect of that is to push unemployment up."

The figures for jobs and unemployment don't always match because they come from separate reports. The unemployment rate is calculated from a survey of households. The jobs count reflects a survey of businesses.

Similarly, unemployment rates can drop when people give up looking for jobs. Of the seven states with statistically important drops in unemployment rates, five saw their labor forces shrink. They were Connecticut, Kansas, Kentucky, New York and Pennsylvania.

In Nebraska and Texas, unemployment fell even while people entered the labor force, a sign of relatively robust job markets.

In Texas, hiring was even across many sectors, including finance, professional and business services, education and health, hospitality and government. The only areas to lose jobs were construction; manufacturing; and trade, transportation and utilities.

Nebraska saw job growth in every sector except finance and hospitality, which declined slightly.

Florida was the only state whose unemployment rate rose significantly, to 11.5 percent from 11.3 percent. Vitner said the state's construction industry experienced a short-term boost over the summer due to a tax credit for first-time homebuyers that was set to expire in November. Congress extended the program, but people who had feared it would expire closed on their houses before November. Many related jobs have since dried up.

Since November 2008, all 50 states have seen a net loss of jobs and a rise in their unemployment rates.

November's jobs picture is bleaker than October's, in part because last month's gains were driven by a rise in temporary employment, economists said. Temporary hiring often is a sign that employers are gearing up to add full-time jobs.

But economists cautioned that October's gains might not be sustainable. They were driven by temporary demand in the auto sector to replace inventories depleted by the Cash for Clunkers rebate program.

November's falling unemployment rates are due in part to the Thanksgiving holiday. Because Thanksgiving came early this year, Vitner said, more holiday hiring than usual took place in November.

Still, the U.S. unemployment rate dropped to 10 percent November from 10.2 percent in October. It was the first unemployment decline since July. Economists called it a hopeful sign that the economy is on the mend, however slowly.

White House economists see jobs growth by spring

In the December 13, 2009 article "White House economists see jobs growth by spring," Caren Bohan reports

WASHINGTON (Reuters) – Senior White House economists on Sunday predicted the U.S. economy will start creating jobs by spring and said that boosting employment will be at the top of President Barack Obama's agenda next year.

Growing public frustration with the still-sluggish economy and double-digit unemployment has weighed on Obama's popularity and may put his fellow Democrats at risk in the 2010 congressional elections.

But Obama's aides and many private economists were encouraged by a better-than-expected employment report for November that showed that the jobless rate inched down to 10 percent from October's 10.2 percent.

"I believe that, as do most professional forecasters, that by spring, employment growth will start to be turning positive," Lawrence Summers, director of the White House National Economic Council, said on ABC's "This Week."

In November, the pace of job losses slowed to 11,000 in November after a decline of 111,000 in October, marking a major improvement from the beginning of the year when the country was seeing jobs disappear at a rate of 700,000 a month.

Christina Romer, chairwoman of the White House Council of Economic Advisers, told NBC's "Meet the Press" that there could be job increases in the first quarter of next year.

But Romer also said that even if payrolls begin to grow, the unemployment rate could go up again before it goes down as better prospects for employment attract more job seekers to the market.

Romer said the numbers "certainly do bounce around. I would anticipate some bumps in the road as we go ahead."

DILEMMA OVER DEFICITS

Exploding U.S. budget deficits have created a dilemma for Obama, who is facing pressure from Democrats in Congress to back aggressive job-creation measures such as a big ramp-up in infrastructure spending and more aid to cash-strapped cities and states while at the same time trying to put some restraint on federal spending.

"For next year or two, priority number one -- certainly this year -- priority number one has be to job creation," Summers told CNN.

Obama on Monday will meet with top executives from 12 major U.S. banks, including Citigroup, Goldman Sachs and J.P. Morgan Chase & Co. to talk to them about financial regulatory reform proposals and ways to increase lending to small businesses.

"He's going to have a serious talk with the bankers," Summers said on ABC. He added that the bankers "have obligations to the country" to restart lending after benefiting from the government's $700 billion bailout of the financial industry.

While agreeing that job growth was lagging the recovery in the broader economy, Summers and Romer offered differing perspectives on whether the recession was over.

"Everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be," Summers said.

But Romer said that for many Americans, it feels as if the downturn is lingering.

She acknowledged that the United States may have turned the corner under the official definition of recession, because growth in gross domestic product has returned.

"But what the president has always said, and I firmly believe: you're not recovered until all those people that want to work are back to work," Romer said.

Senate Republican Leader Mitch McConnell seemed to lean toward Romer's view, telling CBS's "Face the Nation," that the 10 percent of Americans without jobs don't think the recession is over.

Can the Federal Government Really Create Jobs?

In the December 7, 2009 TIME article "Can the Federal Government Really Create Jobs?," Barbara Kiviat outlines four ways the government might reduce unemployment in the short run.

The Obama Administration is out to create jobs. Let's not get our hopes up.

The day before the Labor Department announced a second month of 10%-plus unemployment last week, the White House hosted a get-together to hear from executives, labor leaders and academics about how the federal government might jolt job growth. "We're looking for fresh perspectives," the President said. "I am open to every demonstrably good idea."

That may sound promising, but the truth is, drumming up new jobs on short notice isn't exactly in the government's wheelhouse. In the long term, what the government does and doesn't do is incredibly important to the health of the labor market. Trade policy, corporate tax rates, the structure of health care — these things all have a real impact on economic growth. But Washington's toolkit doesn't work nearly as well in the short run. Right now companies aren't hiring for a very specific reason: there's not as much demand for their products and services. Callous as it may sound, high unemployment at the front end of an economic recovery is perfectly normal.

Of course, for the 15 million people out of work, that's little consolation. So the government is poised to act. Here's a rundown of four sorts of ideas being bandied about, and how much we can realistically expect from each.

Target an Industry and Stimulate Demand

Cash for Clunkers — the program that paid people $4,500 to turn in their old cars and buy new ones — is one of the most demonstrably successful federal efforts at stimulating the economy so far. Over the summer, General Motors and other car companies ramped up production — adding shifts and running plants on overtime — to meet the increase in demand. Now policymakers are talking about Cash for Caulkers, a program that would give homeowners an incentive to better weatherize their houses. The goal would be to create work for a construction industry that still hasn't found its feet in the wake of the real estate bust, while also pushing through a bit of the Administration's green agenda.

Such a targeted type of program has a good shot at doing what it sets out to do. The downside: intervening in the economy in such a precise way is almost by definition not expandable. Cash for Caulkers would give building contractors a boost, but they represent a small slice of the economy. To next help out, say, bakers, policymakers would have to design a brand-new program. Plus, if such a program had an expiration date, we'd feel not just a rise in demand, but a fall later on as well. Car manufacturers and the people who work for them certainly did after the Cash for Clunkers discounts ended.

Pay Companies to Hire People

If we want firms to go out and hire, why not give them an economic incentive to do so? This could be done by flat-out paying companies to hire, or by reducing their share of payroll taxes (the money that gets withheld from workers' paychecks to pay for Social Security and Medicare). Either way, adding a new worker becomes cheaper. We last tried this in the 1970s — the mechanism was a tax credit for hiring — and the results weren't particularly remarkable, though part of that could have had something to do with the structure of the credit.

The goal of this sort of approach is to accelerate the way an economy naturally comes out of recession. Since there has been less demand for goods and services, firms hesitate to add workers. Instead, companies squeeze more productivity out of their current ones. This is a trend we've been seeing. Paying companies to hire would ostensibly push them into the next phase of recovery: adding more employees.

But there are reasons to question how effective and efficient such a program would be. First of all, it is misleading to imply that companies aren't hiring because workers aren't cheap enough. As Dale Mortensen, a professor of economics at Northwestern University, points out, workers are a real bargain right now. Unit labor costs — how much a company has to pay people to produce a unit of whatever it is that the company makes — have been flat or falling for all of 2009. Between the second and third quarters, labor costs dropped at an annual rate of 2.5%. "If you just look at the cost side, this should be a labor boom," says Mortensen.

It is also misleading to imply that companies aren't hiring. They are — about 4 million workers a month. There is always a lot of churn in the American labor market and that doesn't stop during a recession. (We don't particularly feel the hiring right now because companies are letting workers go at a higher rate.) In a best-case scenario — if using tax dollars to subsidize corporate hiring works exactly as it should — we'd wind up paying for 4 million hires a month that we would have otherwise gotten for free.

Hire More People to Work for the Government

Perhaps the easiest way for the government to create jobs is for it to create government jobs. The example quoted most often: the federal Works Progress Administration (WPA), which during the late 1930s employed more than 8 million people. The jobs were project-based and largely in construction — we got a lot of highways and airports out of it — but also occasionally in professional fields such as teaching, nursing and writing.

Do we want the federal government deciding which jobs should be created in our economy? In capitalism, the answer to this question in the long term is no. However, in the short term, there is a different economic argument that could plausibly take over.

Coming out of a recession is a tricky thing. Companies feel like it might be time to start ramping production back up, but demand hasn't fully returned, so they hesitate to hire. The conundrum: demand in the United States is overwhelmingly consumer-driven and people need to have jobs to feel like it's once again safe to spend money. It's classic chicken-or-the-egg matter. Direct hiring by the government could, theoretically, sidestep the impasse. The question then becomes whether or not such a program creates more economic benefit than it does economic inefficiency by having the government dictate job creation. Consider that one criticism of the WPA was that it prevented people from moving to jobs where they would have been more economically productive — and actually slowed down the post-Depression recovery.

Boost Access to Credit for Growing Businesses

Small businesses — or, to be more precise, young businesses — create a disproportionate share of new jobs. To do that, they need to grow, and to do that, they often need access to credit. While the ability of large firms to borrow has pretty much returned to normal, many smaller firms are still struggling to get the money they need from banks. It's a problem even Federal Reserve Chairman Ben Bernanke has talked about in recent weeks. The seeming solution: help get small, growing companies loans and the jobs will follow.

The government has already taken a number of steps in this realm, largely through the Small Business Administration. The issue with increasing access to credit, though, is that easy money was one of the main reasons we wound up on the brink of economic calamity in the first place. Taken as a group, new businesses may be job creators, but any sort of average masks the fact that many young companies completely combust. Lending to them is risky, and while it may be desirable to lend more in an attempt to create jobs, there is a flip side to the coin. There is a reason banks right now are hesitating to lend too readily — they've recently learned a lesson about where that can lead.

If it seems like there are few obvious steps for a government looking to create jobs, that's because there are, in fact, few obvious steps. Governmental programs that would have the clearest impact are, by their nature, limited in scale. Broad-based programs come with caveats and knock-on effects.

At the end of the day, the thing the government may be best at doing job-creation-wise is sticking to the thing it is in more of a position to control: long-term strategy. With major legislation taking shape on a range of issues, from health care to climate change, it is not at all clear what the business landscape will look like in coming months and years. "There's a lot of evidence that suggests uncertainty right now is enormous," says John Haltiwanger, a professor of economics at the University of Maryland. "If some of these things were resolved, businesses might be able to get a clearer map of what things will look like in the future." Including, perhaps, how much they'll want to have some new workers on board.

Unexpected drop in jobless rate sparks optimism

In the December 4, 2009 article "Unexpected drop in jobless rate sparks optimism," Associated Press economics writers Jeannine Aversa and Christopher S. Rugaber suggest the lower than expected unemployment rate for November may be a sign that the economy is improving.

WASHINGTON – Two years of steep job cuts all but ended last month, unexpectedly pulling down the unemployment rate and raising hopes for a lasting economic recovery.

Federal figures released Friday showed that the rate fell from 10.2 percent in October to 10 percent as employers shed the fewest number of jobs since the recession began two years ago. The government also said far fewer jobs were lost in September and October than first reported.

And the so-called underemployment rate, counting part-time workers who want full-time jobs and laid-off workers who have given up their job hunt, also fell, from 17.5 percent in October to 17.2 percent.

The better-than-expected figures provided a rare dose of good news for the economy, but the respite may be temporary. Job creation is still so weak that more than 15 million out-of-work Americans face fierce competition for few openings.

"We will need very substantial job growth to get unemployment lower, especially when the labor force ... starts growing again," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.

Even counting last month's decline, the unemployment rate has more than doubled from 4.9 percent when the recession began.

The report showed how hard it remains to find work. The number of people jobless for at least six months rose last month to 5.9 million. And the average length of unemployment has risen to more than 28 weeks, the longest on record dating to 1948.

Carolyn Malone of Milwaukee had not looked for work in decades — until she was laid off from her customer-service job in May.

Malone, 62, laughed when asked Friday how many jobs she had applied for. She can't remember. But she does recall how many landed her an interview: One. It didn't lead to a job.

"I just want to get my toe in the door," she said, scrolling through her e-mail at a hiring center.

Still, economists and investors drew hope from Friday's Labor Department report. Employers sliced just 11,000 jobs in November, compared with a loss of 111,000 jobs in October. It was the best reading since December 2007 — the last time the economy added jobs and the start of the worst recession since the 1930s.

The unemployment rate had not fallen since July, when it declined from 9.5 percent to 9.4 percent.

Factories, retailers, construction companies — hardest hit by the recession — all slowed the pace of layoffs in November. So did transportation companies and those in leisure and hospitality.

Job gains were produced in education, health care and professional and business services, which mostly reflected temporary hiring. The government added workers, too. Those included states and localities, mainly reflecting the hiring of teachers.

President Barack Obama welcomed the news but lamented that too many Americans "have felt the gut punch of a pink slip."

Facing the prospect of high unemployment well into the 2012 presidential election year, Obama is drafting a proposal to try to stimulate hiring.

"We need to grow jobs and get America back to work as quickly as we can," he said.

Just a month ago, an unexpected spike in the unemployment rate caused some economists to predict it could climb as high as 11 percent. But Friday's report lessened that pessimism, and economists doubted the rate would reach that point.

Still, the jobless rate is expected to resume moving higher, perhaps to 10.5 percent or more by the middle of next year, before drifting down. That's because the recovery is likely to be too weak to spur the job creation needed to quickly drive down the unemployment rate.

The Federal Reserve has estimated that the rate could remain as high as 7.6 percent in 2012.

"The economic storm destroyed more than 7 million jobs over the last two years, and it will take more than two years to get them back," said Bill Cheney, chief economist at John Hancock. "The economy is still weak."

Competition for jobs is so intense that Marla Goldman of Spring Hill, Tenn., has heard back from only six prospective employers out of 100 she's applied to since losing her job with an electronics systems company in October.

She made it to a fifth interview with a company, which booked her a plane ticket to Florida and even sent her an itinerary. But two days later, the company decided to wait on the job until after Jan. 1.

"There are just far more candidates for every job than there are jobs," said Goldman, 50.

To rev up hiring, Obama plans to send Congress a list of ideas, including new tax breaks for small businesses that hire, some new spending on roads, bridges and other construction and grants to state and local governments to avoid layoffs, according to an official who spoke on condition of anonymity because the package was still being crafted.

Congress is not likely to take up a job-creation package until after New Year's.

The administration credits its $787 billion package of tax cuts and increased government spending with improving employment, though Republicans argue it did not help much. The Fed's record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

Most economists said they did not think the better-than-expected jobs news would cause the Fed to raise rates sooner. That's because they predict the jobless rate will remain high and job creation too sluggish. Most analysts do not expect the economy to add jobs consistently each month until spring.

Until employers gain confidence in the recovery, they will be reluctant to ramp up hiring. The few industries creating jobs will probably include health care, education, legal services, data processing, transportation, high-tech manufacturing, electrical power generation and jobs involved in making homes and buildings more energy-efficient, according to Labor Secretary Hilda Solis and private economists.

But November's report suggested that the worst of the job losses are past. And figures out Friday showed that job losses in September and October were not nearly as deep as previously estimated.

The government said 159,000 few jobs were cut in those two months combined. Such revisions are based on more complete information the government gets from companies it surveys. From January through March, the economy lost at least 600,000 jobs each month.

Employment has improved more in some other countries. Canada, for instance, said Friday that its economy added 79,000 jobs last month, reducing its jobless rate to 8.5 percent from 8.6 percent. Canada did not suffer the type of housing meltdown and financial crisis that slammed the U.S. economy last year.