Today, the Bureau of Labor Statistics released a sobering update of the nation’s unemployment situation. Just 39,000 jobs were created last month — after economists predicted 145,000 — and the unemployment rate edged up to 9.8 percent. This level of job creation isn’t even enough to keep up with the growth of those joining the labor force, never mind bring down the unemployment rate. The wider U-6 measure of underemployment stands at 17 percent. Here’s the chart from Calculated Risk:
One of the most distressing stats is that 41.9 percent of the unemployed have been out of work for at least six months. Even with that many people in the ranks of the long-term unemployed, Congress has been unable to extend unemployment benefits, meaning millions of Americans will fall through the last strands of the social safety net in the midst of the holiday season. The expiration of benefits will also reduce economic growth, possibly by as much as one percentage point.
The prospects for additional job creation measures is also very dim, unless a few tax provisions squeak through as part of an unseemly “compromise” that also extends all of the Bush-era tax rates. But the jobs crisis has gotten so bad, that even the Federal Reserve — which has embarked on its own series of steps to boost economic growth, after sitting on its hands for months — is pleading for more fiscal stimulus. First, Chairman Ben Bernanke:
The Federal Reserve is nonpartisan and does not make recommendations regarding specific tax and spending programs. However, in general terms, a fiscal program that combines near-term measures to enhance growth with strong, confidence-inducing steps to reduce longer-term structural deficits would be an important complement to the policies of the Federal Reserve.
We need, and I believe there is scope for, an approach to fiscal policy that puts in place a well-timed and credible plan to bring deficits down to sustainable levels over the medium and long terms while also addressing the economy’s short-term needs.
Instead, Congress is consumed with figuring out for how long the richest two percent of Americans should receive a tax cut above and beyond those received by everyone else.
Felix Salmon has more:
[T]he elected branches of government are making things worse rather than better: 2 million of the long-term unemployed lost their federal emergency unemployment aid on Tuesday, and Republicans in Congress are much more interested in a $700 billion scheme to extend tax cuts for people earning more than $250,000 a year than they are in providing some kind of social safety net for people who have been out of work for more than six months.