The American economy posted solid employment gains in January, although worries persist about the extent and the sustainability of the nation’s belated “recovery,”cloud the long-term employment picture.
Nonetheless, the U.S. economy created 243,000 jobs last month according to statistics released on Friday by the U.S. Department of Labor. That was good enough to drop the nation’s jobless rate from 8.5 to 8.3 percent. Meanwhile the underemployment rate – a broader, more accurate measure of joblessness – edged down from 15.2 to 15.1 percent.
While those declines are good news for U.S. President Barack Obama – who has earned poor marks for his handling of the economy through the first three years of his administration – storm clouds remain on the horizon. In fact earlier this week the Congressional Budget Office projected that unemployment would climb back up to 8.9 percent by the end of 2012 and up to 9.3 percent by the end of 2013.
Also, within the existing declines are some troubling undercurrents.
For example of the 12.8 million Americans who are currently unemployed – 43 percent of them have been that way for more than six months. Back in June 2009 that figure was below 30 percent. Moreover, the number of working age Americans who are not part of the labor force shot up by 1.2 million in January – evidence that lots of people are simply giving up their search for gainful employment.
More importantly for Obama’s political future, January marked the 35th consecutive month in which the unemployment rate has remained above 8 percent – which is a mark that Obama’s economic advisers said the rate wouldn’t exceed after the passage of the so-called “stimulus” three years ago.
Don’t get us wrong, positive numbers are, well … positive. Our only concern is that the fundamentals for sustained employment growth are simply not there.