Payroll Downtrend Stunning
The Labor Department’s much-ballyhooed Friday release of November’s unemployment data sent sobering messages to Washington about the intense level of distress on Main Street. With Congress mired in negotiations for unpaid tax cuts for the nation’s wealthiest citizens and unable to agree on unemployment benefit extensions for 2 million American families, the public is asking with more and more urgency “who is captaining the ship?”
Expectations were that 150,000 new jobs would have been created in November. Friday’s bleak non-farm report indicated that just 39,000 new jobs were created in November compared to 172,000 in October. The data sent the unemployment rate from 9.6 percent to 9.8 percent.
With real unemployment at 17 percent, Washington and the Obama Administration apparently lack the cooperative spirit needed to get jobs programs rolling. The private sector added 65,000 jobs in November, down from 160,000 in October. Most of these new jobs were in the service sector.
Manufacturing, Construction, Government and Retail turned in negative numbers despite an earlier report from ADP that these sectors were turning upwards. In one of the few bright spots in the Labor Department’s report, applications for initial unemployment benefits hit a two-year low in November.
Chief economist for Moody’s Analytics, Mark Zandri, said he expected the unemployment number to top 10 percent very soon. November marks the 19th consecutive month of unemployment greater than 9 percent. 15.1 Americans were unemployed last month. The report indicated that another 1.3 million Americans are termed “discouraged workers,” those workers who have stopped looking for work.
Deficit Vote Falls Short
The Simpson-Bowles Committee to balance the budget came up short of the 14 necessary votes to push the recommendations to the House. However, the initiative has enough support that it may still get to Congress with a protocol revision.
While there is much criticism of a very real approach to trimming the deficit by $4 trillion inn ten years, one of the provisions is gaining steam. That provision calls for a reduced payroll deduction as a means to encourage job growth.
The Simpson – Bowles report is gaining momentum and as analysts study the recommendation, it is a well-conceived plan to move forward. The problem is that there will be some pain involved. However, there is plenty of that on Main Street now.
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