Great news on the economy. The unemployment rate is now just 9.8%. See, the stimulus worked!
Oh, wait. Unemployment actually increased? Well, whatdayaknow, maybe the Republicans were right when they said the stimulus wouldn’t work. Who knew that $787 billion in giveaways to states, pork barrel projects, and phony tax “cuts” wouldn’t create jobs?
To be fair, the private sector created jobs in November. Just not many. The unemployment rate increase was in part due to government cutbacks and discouraged people rejoining the labor force 9looking for jobs again). Still, this increase in the unemployment rate was not expected.
Here are the details, from CNBC:
U.S. employment barely grew in November and the jobless rate unexpectedly jumped to a seven-month high, hardening views the Federal Reserve would stick to its $600 billion plan to shore up the fragile recovery.
Nonfarm payrolls rose 39,000, with private hiring gaining only 50,000, the Labor Department said on Friday. However, overall employment for September and October was revised to show 38,000 more jobs gained than previously estimated.
The unemployment rate was bumped up in November to 9.8 percent partly because discouraged workers rejoined the labor force. However, the survey of households from which the jobless rate is derived also showed a decline in employment.
Economists had expected payrolls to increase 140,000 last month and the unemployment rate to be unchanged at 9.6 percent.
“This points to not necessarily a turning point in the data, but maybe a reflection of how uneven the economic data is likely to be,” said Jeff Kleintop, chief market strategist at LPL Financial in Boston.
So basically this isn’t THAT big of a deal, but still, things are much worse than many would hope. The government’s anti-recession policies didn’t exactly save the day like everyone hoped. The messiah, as some have called Obama, can’t walk on water after all.
Meanwhile, as Obama plays ball with his homeboys (although to be fair, he’s in Afghanistan today), the ADULTS in Washington are cleaning up his mess. Today, after hearing the news about the unemployment rate increasing, Republicans made the case that ALL of the Bush tax cuts must be extended.
Of course, Democrats will claim that this is just another case of Republicans putting the rich before everyone else, but last time I checked, most economists feel that raising taxes on ANYONE during a recession/fragile recovery is a bad idea. Then again, since when did policymakers listen to economists?
Here are the details about the political dimension on the unemployment figures, from Fox News:
Republicans said the uptick shows the need to immediately extend all the Bush tax cuts before their Dec. 31 expiration. Democrats argued the weak employment picture underscores the need to extend the cuts for the middle class and to extend the long-term unemployment benefits which started to expire earlier this week.
“The best way to inject demand into our economy right now is to put money in the pockets of those that need it most and will spend it fastest – America’s middle class,” House Speaker Nancy Pelosi said in a written statement, urging Republicans to reinstate the aid and “stop holding middle-class tax cuts hostage.”
But Republicans, who assailed Democrats for pushing a middle-class tax cuts-only bill Thursday in the House, said the report shows it’s time to get serious and spare everyone from a tax hike.
The middle-class tax cut bill that cleared the House is not expected to stand a chance in the Senate, even though Senate Majority Leader Harry Reid has scheduled votes on two Democratic proposals for Saturday.
House Republican Leader John Boehner urged Democrats to stop “wasting time with meaningless votes” and avert all tax hikes.
Sen. Lindsey Graham, R-S.C., told Fox News the “devastating” report shows it would be bad policy to raise taxes on anybody.
“That’s ill-advised when it comes to job creation,” he told Fox News.
Many economists had predicted the addition of nearly 150,000 jobs in November. But the Labor Department report showed employers added just 39,000, a sharp decline from the 172,000 created in October. The weakness was widespread. Retailers, factories, construction companies, financial firms and the government all cut jobs last month.
As a result, the jobless rate which has been stuck at 9.6 percent for three months crept once again toward 10 percent. The jobless rate has now topped 9 percent for 19 straight months, the longest stretch on record.
The economy has recently flashed signs of gaining momentum with busier factories, rising auto sales and a good start to the holiday shopping season. But that didn’t translate into mass hiring in November.
In fact, private companies — the backbone of the economy — created 50,000 jobs. That was down significantly from the 160,000 private-sector jobs created in October and was the smallest gain since January.
Let’s hope Congress acts soon, before it’s too late.