Podcast: The November Employment Report and What it Means for the Economy
I’m Michelle Bazie. Today, the Labor Department issued employment data for the month of November. We’re here with Chad Stone, the Center’s Chief Economist.
1. Chad, let’s start with the numbers. What does the November report tell us?
A: This is a much better jobs report than we’ve seen in awhile. Job losses were only 11,000 in November and they’ve averaged just 104,000 per month over the past three months. That’s a major change from losses averaging 645,000 jobs per month during the period of maximum job loss from November 2008 to April 2009. The other headline number, the unemployment rate, stood at 10 percent in November. That’s down from 10.2 percent the month before. But most analysts think that the unemployment rate is still going to climb higher before it starts to decline permanently. And keep in mind that at the start of the recession the unemployment rate was at 4.9 percent. In addition, some other details in the report remain troubling.
2. Some might have thought that this report was the first sign of the light at the end of the proverbial tunnel. What about the report do you find to be troubling?
A: Well, Michelle, jobs are still extremely scarce for those who have been looking for work for a long time. The number of people who have been unemployed for 27 weeks or more continued to climb in November. Nearly 40 percent of the 15.4 million people who are looking for work are in this category of long-term unemployed. That’s the highest percentage on record in data that go back to 1948.
3. Are the long-term unemployed still able to qualify for unemployment insurance?
A: Unemployed workers typically qualify for up to 26 weeks of regular unemployment insurance benefits. In normal times, a high percentage of the unemployed find a job before exhausting those benefits – but these are not normal times, with the economy in a deep hole and barely beginning to climb out of it. That is why the economic recovery legislation that the Administration and the Congress enacted earlier this year included additional weeks of unemployment insurance and other assistance for unemployed workers.
4. How well have these measures worked?
A: Very well. Not only have the additional weeks of unemployment insurance and other assistance in the Recovery Act helped relieve the hardship faced by unemployed workers and their families, but they have also provided a valuable boost to economic activity and job creation.
Unfortunately, these measures are scheduled to expire in less than a month. It is critical that policymakers looking for ways to create jobs recognize how valuable unemployment insurance benefits are and extend them into next year. Helping unemployed workers isn’t an alternative to preserving and creating jobs; it’s one of the most effective ways to preserve and create jobs.
5. Earlier you mentioned that job losses have slowed dramatically. How does this affect the labor market?
A: Slowing layoffs is one part of the job loss picture. But getting a labor market recovery that puts unemployed workers back to work requires faster growth in demand and a much greater pace of new hires than we have seen so far. The economy must also overcome another significant barrier: the tightening of state budgets. We estimate that without additional federal assistance, state actions to close their projected budget deficits could cost the economy 900,000 jobs next year.
So, this additional state fiscal relief, coupled with extending unemployment insurance benefits into next year should be a “no-brainer” for policymakers. These measures consistently rank very high in economists’ assessments of bang-for-the-buck impact in boosting demand and creating jobs.
Thanks for joining me, Chad.