The October 2010 jobs and unemployment report is out this morning. Mark Thoma nails my thoughts pretty well:
The BLS reports that unemployment was unchanged in October at 9.6%, and Nonfarm payroll employment increased by 151,000.
I’ve seen some people calling this a strong report. It’s certainly better than lower job growth numbers, so it could have been worse, but in past recoveries we’ve had job growth of hundreds of thousands, far more that this. So let’s try to put it in perspective. Many people estimate that 7.5 million jobs have been lost since the start of the recession (and some people estimate it’s even more than this). Suppose it takes 100,000 jobs per month to keep up with population growth. I think it’s a bit more than this, but let’s take an estimate that is generous in terms of making up lost ground. With a net gain of 50,000 jobs (rounding from 51,000), how long would it take to reemploy the 7.5 million who need jobs? The answer is (7.5 million)/(50,000) = 150 months = 12.5 years. That gives an indication of the strength of the report. Some of the 7.5 million might drop out of the labor force reducing the time a bit, but having people drop out of the labor force is not good news either.
The Report is better than it could have been, but we need more job growth than this. Let’s hope it picks up in coming months.
Unfortunately, “hope” is about all we have left. The new Congress does sound like it is going to do anything intelligent to improve employment prospects in the economy, although people with existing jobs paying more than $500,000 ought are probably ecstatic.
Calculated Risk shows just how bad the employment picture is. If you extrapolate this curve, you’ll figure we’re probably looking at another 4 years minimum till we recover the jobs we lost in this recession (assuming we ever get them back).