Yesterday, the Department of Labor reported that the unemployment rate dropped to 10 percent in November, and the U.S. economy lost a much lower than expected 11,000 jobs last month, which is the fewest since the recession began in December 2007. The wider measure of underemployment also fell to 17.2 percent, from 17.5 percent.
Everyone (aside from the Republican National Committee, which still used the new numbers to bash the Obama administration) seems to be looking at the report with cautious optimism. But CNBC’s Trish Regan concluded that the report means the government should cancel the rest of the American Recovery and Reinvestment Act (i.e. the stimulus package) because we are now on “the road to recovery”:
The first thing that went through my head was, number one, wow! I mean, it was a tremendous surprise to, I think, everyone, certainly here at the New York Stock Exchange, one of the reasons the market’s doing so well this morning. But the second thing was, do we really need more stimulus given that we seem to be very much now on the road to recovery?…Why spend any more money? We haven’t spent all the stimulus money thus far, why not maybe hang onto that?
While the jobs report is certainly encouraging, I wouldn’t be celebrating a recovery just yet. 7 million jobs have still been lost in this recession, while “the typical unemployed worker has been searching for work for 20.1 weeks, and the share of the unemployed who have been out of work and searching for a job for at least six months rose to a record high of 38.3 percent.” Its particularly foolhardy to suggest canceling the stimulus on the same week that the Congressional Budget Office found that it has created or saved 600,000 to 1.6 million jobs, with plenty of punch still to come.
We’re definitely not out of the woods, which is why it’s encouraging that Democrats in Congress are working to craft a new jobs package. “I think we’re at a moment now where we’re beginning to see the positive benefits of the stimulus, but if we take our foot off the accelerator, we could relapse into a very, very slow recovery,” said Sen. Jack Reed (D-RI) yesterday.
The Wall Street Journal reported that Democrats are looking at a $170 billion effort — funded at least in part by TARP money that has been repaid to Treasury by banks — inclusive of $100 billion in safety net provisions and $70 billion in infrastructure investments and aid to states.
President Barack Obama, meanwhile, will lay out his own vision for a jobs bill on Tuesday, and Congress isn’t expected to unveil its final legislation until after Obama’s speech. According to White House Press Secretary Robert Gibbs, Obama is likely to endorse using TARP funds for the jobs bill. Republicans, meanwhile, are opposed, with House Minority Leader John Boehner (R-OH) calling it “the worst idea I’ve ever heard of.”