Rest easy everyone, the noted economist Felix Salmon has pronounced the “employment emergency” over.
This is the US unemployment rate, from Calculated Risk. Today’s jobs report was a very positive one: not only did job creation exceed all expectations, but unemployment fell too, to 7.7%. For the first time, the unemployment rate is lower than it was when Barack Obama took office, in January 2009.
The employment recovery is now 33 months old, and as strong as it’s ever been. We’re still a long way from achieving pre-recession levels of employment, but the fact is that it’s hard to maintain a sense of crisis and emergency for this much time: if you live with anything for more than a couple of years it becomes normal. (Which is one reason why Europe, which has a structurally much higher unemployment rate than the US, doesn’t consider itself to be in a permanent jobs crisis.)
Now, I happen to be a big Felix fan – read his posts religiously – but sometimes his Progressive sympathies do get in the way of objective analysis. With the election having passed I thought his rah-rah posts might have vanished as well but I suppose the rush of victory still burns within.
Somehow I don’t think that the middle-aged manager that went from a high five figure salary to trying to make ends meet on a 12 buck an hour job in a call center and most likely a second job as well feels all that good about how well things are going in the jobs market. Nor does the two income household that is down to one income because the available jobs don’t justify the child care and commuting expenses probably feel all that sanguine about things. Maybe their particular emergencies are passed but I doubt just hanging on is what they had planned for life. Felix may be feeling like his new normal is OK but I doubt that the millions of Americans who have experienced a permanent downward adjustment are particularly excited or, hopefully not ready to so willingly accept this state.
Now if you would like a sense of what economists had to say about today’s report check out the WSJ Real Time Economics blog. Here is a taste:
There is a very good chance the November print gets revised down as a more complete data set materializes. The household survey indicated that those not at work due to “weather” jumped by 369k, about 300k above average for the month. So, there was a big weather effect on the household survey, it just didn’t fully translate into payrolls in November. –Eric Green, TD Securities
The good news is not that the labor market is improving rapidly – it isn’t – but that employment growth is holding up despite all the fears over the fiscal cliff. That suggests that if we can successfully negotiate the cliff without a prolonged crisis and without too much fiscal tightening up front (far from a sure thing, admittedly), employment growth should accelerate in 2013. –Nigel Gault, IHS Global Insight
Yeah, things are slowly improving but there’s a lot of permanent damage out there. Emergencies of the economic sort are usually declared by politicians in order to justify their floundering about in order to preserve their jobs. Having spent inordinate amounts of money largely solving nothing they declare the emergency over and move on to the next crisis du jour. Those in pain, however, remain so.