The November Employment Report: A Wake-up Call
Awful. That’s the best one can say about the November employment report. The headline — that unemployment jumped to 9.8 percent — is not really the bad news. If and when the economy does catch fire, droves of discouraged workers will flood back into the labor market and the rate will easily exceed 10 percent. So a rising unemployment rate is not really the main concern.
No, the main concern is that there were only 50,000 private-sector jobs created, not nearly enough to make a dent in the employment woes. And that was the bright spot. For blue-collar workers — “production and nonsupervisory employees” — aggregate hours fell, aggregate payrolls fell, average weekly hours fell, average hourly earnings fell, and average weekly earnings fell. In the household survey, employment actually declined.
Unlike the recent past months, this report offers less of a mixed reading and more plain bad news.
It’s also a bit mysterious. The other data for November showed considerably more promise, and the ADP Employment Report on Wednesday pointed to large job gains. We should expect the data nerds to tear apart the seasonal adjustment of the numbers — always tricky for the holiday season — and see if something fishy turns up.
But mostly this is an alarm bell for the lame-duck Congress. No more games — extend all the tax cuts for two years, patch the AMT, and turn to cutting spending and tax reform.
Going forward, Congress has lost the luxury of extended debate on boutique social issues. All focus should be on growth. Every policy should be evaluated for its impact on growth. Wake up.
This originally appeared on National Review Online on December 3, 2010.