The Big Story Blog

Economy 'just treading water'?

Posted at 1:07 PM on December 2, 2011 by Paul Tosto
Filed under: Jobs and unemployment

The monthly Bureau of Labor Statistics report on employment is an economic Rorschach test. Everyone sees something a little different when they look at the numbers. A read through social media, news stories and economic reports today shows the divisions, coming four years exactly since the official start of the

At the White House, Alan B. Krueger, chair of the president's council of economic advisers writes:

Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007.

Some private sector analysts aren't nearly as sanguine.

Scott Brown, chief economist at Raymond James & Associates, calls the report another sign that "we're running in place or treading water in the employment market."

Click on the play button to listen to him on Bloomberg TV.

Brown and others note the while the 120,000 new jobs in November is enough to absorb the growth in the working age population, it's not enough to make up for the ground that was lost in the downturn." Economists, he added, would like to see those new job numbers come in it at 250,000 to 300,000 per month every month for a couple years. "I think we're a long way from that."

(Minnesota has similar issues. State officials say the state needs to grow about 2,000 jobs a month to keep pace with the working age population but they're forecasting only about 2,300 jobs a month for the next couple years.)

The liberal-leaning Economic Policy Institute also looks at the data and concludes that the job growth isn't strong enough "to cure sick labor market." It also warns:

At the end of this year, federally funded extended unemployment insurance (UI) benefits are set to expire. If they aren't renewed, 1.8 million workers will prematurely lose benefits in January.

Extending the federally funded unemployment insurance benefit extensions through the end of 2012 (when the unemployment rate is expected to be 8.5%) would not only extend a lifeline to the families of millions of long-term unemployed workers, it would also generate spending that would support well over half a million jobs. If this program is discontinued, the economy will lose these jobs.
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About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.