Good jobs data dominate the headlines this morning: Unemployment holding pretty much steady at long last; dramatic downward revision in last month’s number of lost jobs; average hours up.
Employers in the U.S. cut the fewest jobs in November since the recession began and the unemployment rate unexpectedly fell, signaling the recovery is lifting the labor market out of the worst slump since World War II.
“Shockingly good,” said NewsHour senior producer Murrey Jacobson on the phone to me about today’s numbers. And he wondered about the better-than-expected news in the context of the story we’ve been reporting on the plight of older workers. That story will debut later today on our newly revised Making Sen$e site. (The news today for older workers? Those 55 and older are in one of the two age categories that saw unemployment RISE in the latest numbers. The other category? Workers age 20-24.) But besides the fact that older workers are still being laid off, those already unemployed are out of work for a longer and longer period, today’s report said. Last month, over 50 percent of the older unemployed were out of work for at least 27 weeks — a new record. As Nigel Gault, chief domestic economist at IHS Global Insight, put it to the New York Times’ Javier Hernandez this morning:
“You create this class of people who essentially become permanently unemployed and can’t get back in….You have people who have lost contact with the labor market, whose skills are not relevant for jobs for the future, who employers regard with skepticism because they have been out of work for so long.”
One further point, though based more on anecdata than any hard numbers: Companies have cut their ranks so deeply, so steadily, that those who are left can’t work any harder. This would explain why “productivity” shot up a stunning 8 percent in the 3rd quarter of 2009, 13 percent in manufacturing. U.S. firms were making the same or more with less — less workers, that is. You can also understand why firms aren’t hiring: the warnings of another downturn as stimulus money slows; health care so expensive and new legislation concerning it not yet passed. But eventually, today’s data suggest, firms will have to start adding jobs. As to why the unemployment number went DOWN, while jobs shrank too? It’s the old story: people leaving the workforce “voluntarily.” Remember, if someone didn’t look for work in the past 12 months, s/he drops from the labor rolls entirely. With long-term unemployment making history, it should come as no surprise that the drop-out rate continues to rise as well.