The more important thing here is that the broad, long-term picture is dismal. The real unemployment rate is the broader U6 number, which includes everyone who would like to work, including those who have given up because of the bad jobs market and those who are underemployed. As such, the U6 number is not distorted by inaccurate and wild swings in the labor force because it factors in everything. It’s already baked into the cake.
The U6 number stands at 14.6%, the same as when Obama took office. It has remained high, and will continue to remain high until the economy grows and businesses begin to invest their capital. Yet, private investments have actually decreased by 1.3% in the third quarter of this year, most likely a result of Obamacare, Dodd-Frank, and EPA regulations, all of which are forcing companies to sit on their cash.
Even looking at this report in a narrow short-term lens, there is not much good to see. While 171k jobs would be an adequate number in normal economic times, it still woefully low for a recovery from such a deep recession. Remember that the working-age population grew by 211,000 in October, according to the Household Survey. So while 171k is better than most of the previous months, it is still barely keeping up with population growth, much less pulling us out of the nadir of the employment trench. It would take many more years, possibly more than a decade, of this growth rate on a monthly basis just to return to pre-recession employment levels. As AEI’s James Pethokoukis notes, all the jobs lost during the recession in the late 70s and early 80s were recovered in just 10 months.
Yeah. With Ronald Reagan as President.
We don’t have that advantage at the moment. Maybe we can fix that come next Tuesday, though.