The deceptively positive unemployment number released earlier today raises a serious question about why the nation obsesses over a single piece of information that actually tells us very little about the health of the job market. Though the December Employment Situation Report showed an unemployment rate of 6.7 percent, the best number in years, what's behind the data reveals an economy that is anemic and a labor market that is in shambles. Dramatic action needs to be taken this year if any of it is to change.
Though the Department of Labor's statistics put out this morning exhibited the lowest jobless rate in six years, lower than at any point since the Great Recession of 2009, the reality is that merely 74,000 jobs were created last month. That's twice below the number needed to keep with up population growth and brings the average number of jobs created last year to just 30,000 a month above what's needed to keep real job growth above zero. Not surprisingly, Black unemployment was still in the critical double digits with Latino jobless finally leaving that red zone but still higher than the national average.
But that's not the real news.
The reason why the unemployment rate seems to be the best since 2008 is that so many Americans have given up looking for work. In December the number of "discouraged workers" surged by 155,000. Discouraged workers are those who want employment but have given up the search believing that there are no jobs for them.
Since the official unemployment rate measures only individuals who both want work and are actively seeking it, the exit of over a hundred thousand people from the labor market causes the unemployment rate to fall and for things to look better than they actually are in fact.
The below-the-headline data in the report is so bad that Wall Street economist Guy Berger told The New York Times that it was simply "ugly."
The alarming jobs picture was put out just one day after President Obama announced his Promise Zones which will boost federal aid to combat joblessness and poverty in distressed rural and urban communities across the country. Five zones were announced on Thursday with the number rising to fifteen by the end of the president's term in 2016.
Yet given the wrecked nature of the nation's labor market, it appears that the country as a whole has a promise to fulfill to desperate job seekers that it's finding difficult to fulfill.