Just-released data shows that the unemployment rate has dropped
to 10.0% from 10.2% last month, seasonally adjusted. It also shows that
employers cut 11,000 jobs, far less than the 100,000-plus expected.
Everyone agrees the report is good news, but warning abound of the
political and economic downside. The consensus: Thing are looking up,
but we're not out of the woods yet. President Obama is making
employment a top domestic initiative in December, and is discussing
jobs in Allentown, Pennsylvania, at 11:45am today. Can Obama look
forward to more good news, or is this just temporary relief?
Questions Remain The Atlantic's Megan McArdle warns
that though it's "basically unalloyed good news" for the economy,
"That's not to say that we're out of the woods yet. Presumably we got a
little boost as seasonal hiring ramped up--and whlle the numbers are
seasonally adjusted, the adjustments are never perfect. We also face a
lot of unknowns, like what will happen as commercial real estate starts
to unravel and foreclosures ramp up again. Even larger questions, such
as 'when will the Fed start getting serious pressure to tighten?' are
even harder to answer."
Obama's Not Celebrating The Atlantic's Marc Ambinder writes,
"Don't expect too much celebrating from the White House today." He
explains, "the White House has jumped the gun on trumpeting the
green shoots before...when those shoots turned out to be bacterial
outgrowths from the existing infection."
- Worse Before It Gets Better Reuter's Felix Salmon calls
the report "genuinely encouraging" on several fronts, but says it won't
likely last. "[I]t's still more likely than not that unemployment is
going to top out
well above the 10.2% rate from which it fell this month. It’s great to
have a little bit of holiday cheer in the last payrolls report of 2009.
But winter still hasn’t started yet."
Don't Over-Credit Stimulus The National Review's Samuel R. Staley says
the "shift in momentum" isn't due to government spending. "If the
economy is recovering, it probably has a lot more to do with
effective monetary policy than the spending side of the stimulus
package. Only 30 percent of the stimulus funds have been allocated, so
federal spending really can't claim much in the way of economic
success." He adds, "meaningful job creation will require jump starting
that adds real economic value. That's not a matter of redistributing
dollars and spending in the economy. It's about re-aligning investment
- Understanding The Stats Time's Justin Fox notes that the month-to-month numbers are only estimates. "These numbers are subject to revision. Last month's payroll job loss
number of -190,000 has been revised down to 111,000. September's nasty
-263,000, which had me wonderingif
the job market had started getting worse again, has been revised
down to -139,000. So this month's good news could be revised upward
into really good news or downward into disappointment," he writes. "The
unemployment rate doesn't get revised but tends to jump around a lot."
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