Today’s jobs report was worse than many analysts anticipated, with the unemployment rate rising a bit, to 9.8 percent, and employers shedding 263,000 jobs in September. The broader U6 measure of underemployment is now at 17 percent. Not surprisingly, manufacturing and construction were the hardest hit sectors (with 53,000 government jobs also going up in smoke). While a far cry from the 700,000 jobs that were being lost each month at the beginning of the year, as Bloomberg reported, these numbers are “calling into question the sustainability of the economic recovery.”
One of the biggest problems is the amount of time that active job-searchers are staying unemployed. Planet Money noted that, “as of September, job searchers could expect to spend 26.2 weeks on the hunt — the longest average on record since the BLS started keep records back in 1948.” That amount of time will discourage many a job-seeker, keeping underemployment high.
While it would be nice for the economic recovery to be smooth and fast, in reality, fits and starts like this are to be expected. But the number does call into question whether enough is being done to support the job market. As Nobel Prize-winning economist Paul Krugman wrote today, “all indications are that unless the government does much more than is currently planned to help the economy recover, the job market…will remain terrible for years to come.” Former Labor Secretary Robert Reich agreed, writing that “the federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some.”
But part of this is trying to find patience regarding the effects of the stimulus. As Gov. Arnold Schwarzenegger (R-CA) said yesterday, “the fact of the matter is, in California, it has had a great impact…And remember, every single job that you create is one less person that is out of work.” “I think this has really been a — a terrific success. And I hope they’re going to continue this,” he added. There is still a significant amount of stimulus money waiting to go out, which is a fact that shouldn’t be forgotten.
Plus, while it may make sense economically, I wouldn’t hold my breath for more spending, since Republicans feel that canceling the stimulus and paying down debt will be good for the economy. And it doesn’t help that certain media outlets are claiming that almost ten times as many Americans are unemployed than actually are, making the problem seem insurmountable.