Some good news lurks in today’s jobs numbers, but we’re still a long way away from a real recovery.
The new jobs numbers are out. Overall, 212,000 private sector jobs were created while 12,000 government jobs were lost, for a net total of 200,000 job gains. That loss, 12,000, is less than the average 23,000 government jobs that were lost per month in 2011, so it boosts the headline number. Yet 12,000 is still a lot to lose, especially when so many of those numbers come from education — at least 9,000 local-level education jobs were cut.
Where’s the good news? There were solid increases in weekly hours (+0.5%) and payroll (+0.7%), meaning employed people are getting more money in their pockets. With more money, they can spend more, which will employ other people and create a virtuous loop of spending and employment. This will help boost demand broadly and start to add some energy to a depressed economy. If sustained, it could help take the current jobs reports — which are good but not enough to end the unemployment crisis we currently have — and turn them into jobs numbers capable of bringing about a serious recovery.
But there’s also an apparent queue for who will get jobs first. Right now we are seeing most job gains go to men and to those with higher education. Men have been gaining jobs over women across industries and occupations throughout 2011 — and in the household survey women lost jobs last month. The employment-to-population ratio went down to 53 percent for women last month, bringing it to the lowest levels since 1988. The Roosevelt Institute will be doing additional research on this topic in 2012.
What’s on the horizon? Something needs to trigger these 200,000 jobs a month reports into the 250,000 to 400,000 range. At the current rate, we won’t see full employment until 2024. Something needs to kick in. One way this could happen is if household formation takes off in 2012. There’s a shadow household inventory of adults living with parents and adults living with other adults who, in better times, would have moved out. Household formations would take stress off the terrible housing market, but is it likely to take off itself without a boost? I’ll be following this argument throughout the year.
The other big way to put more gas in the economy’s engine is through expanded fiscal and monetary policy. There’s no sign from inflation or government borrowing rates that we’ve hit a danger zone in stimulating the economy, and there’s plenty of slack in the short-term to put idle resources to work.
Mike Konczal is a Fellow at the Roosevelt Institute.
The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.