Tags: Reich | Jobs | Economy | Trouble

Reich: Jobs Data Show Economy Still in Trouble

Friday, 02 Dec 2011 02:43 PM

The unemployment rate may be dropping and the economy adding workers, but the November jobs report depicts an economy that is not out of the woods yet, says economist and former Labor Secretary Robert Reich.

The November unemployment rate fell to 8.6 percent in November, a two-year low and down from 9 percent in October, according to the Bureau of Labor Statistics.

The decrease was not due to a surge in hiring but rather, due to more people quitting their job search and bolting from the labor force, which means the economy is far from fully on the road to recovery.
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The economy added a net 120,000 nonfarm payrolls in November, and September and October saw their figures revised upwards.

That is arguably good news, but the rate is well above the 4.7 percent figure reported in November of 2007.

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Robert Reich
(Associated Press photo)
"We are not out of the woods but at least we have seen the possibly of some daylight. The trend is in the right direction," Reich tells CNBC.

However, a good chunk of the new jobs added to the economy were in the retail sector, which aren't the kinds of jobs the country really needs.

"About a third of the new jobs in the private sector were retail jobs. Those retail jobs tend to be not terribly permanent jobs,” says Reich, who served in three national administrations and was a secretary of labor under President Bill Clinton. “They tend to be very low-paying jobs, so this is not a fabulous report by any stretch of the imagination," says Reich, now a professor of public policy at the University of California at Berkeley.

In limbo

Other experts agree the numbers aren't bad but aren't good either, leaving the United States economy stuck in limbo.

"The economy is continuing to head in the right direction," says Millan Mulraine, senior macro strategist at TD Securities in New York, according to Reuters.

"However, the ultimate test of the sustainability of the recovery is for the economy to create a sufficient number of jobs to sustain a consumer-led rebound in activity," Mulraine said.

"On this measure, this report falls short."

Many who have managed to land work are still finding it hard enjoy the financial lifestyle they had before the recession set in.

A study conducted by the John J. Heldrich Center for Workforce Development at Rutgers University finds that only 7 percent of those who lost jobs after the financial crisis have returned to or exceeded their previous financial position and maintained their lifestyles.

"The news is strikingly bad," Cliff Zukin, a professor of public policy and political science at Rutgers who compiled the study, tells The New York Times, adding it's "a tremendous impression of dislocation and pain and wasted talent."

Others point out it will take years before the job market fully recovers — many years.

The economy must create enough jobs to absorb not only everyone looking, but enough to hire those who have quit looking and later decide to jump back in.

"At this pace of job growth, it will be more than two decades before we get back down to the pre-recession unemployment rate. Moreover, a shrinking labor force is not the way we want to see unemployment drop," says Heidi Shierholz, an economist at the Economic Policy Institute, according to CNBC.

"At this rate of growth we are looking at a long, long schlep before our sick labor market recovers."

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The unemployment rate may be dropping and the economy adding workers, but the November jobs report depicts an economy that is not out of the woods yet, says economist and former Labor Secretary Robert Reich. The November unemployment rate fell to 8.6 percent in November, a...
Reich,Jobs,Economy,Trouble
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2011-43-02
Friday, 02 Dec 2011 02:43 PM
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