A strengthening economy

A strengthening economy

February 7th, 2012 in Opinion Times

The latest report on declining joblessness and unemployment in January was unambiguously good news. The nation's unemployment level fell again, to 8.3 percent, marking a third straight month of decline, and dropping to the lowest point since January 2009. And the number of net new jobs rose to 243,000 after subtracting continuing job cuts by government at all levels. The job gain brought the total number of new jobs under the Obama administration to around 3.7 million.

Those are all good figures. The fact that they follow a generally rising trend in new jobs and a steadily declining level unemployment was even better because the figures came without the usual caveat that jobless levels masked another round of people dropping out of the work force in despair.

Indeed, the Labor Department's latest figures, including significant upward adjustments to the previously reported totals of new jobs in November and December, suggested that the rising economy is finally on a generally sustainable trend.

That said, the economy will not soon achieve what most economists, and probably most Americans, think of as full employment -- unemployment rates of about 4 percent, and the availability of jobs for people who really try to find work. Given rising population and demographic trends, that won't happen, at the current growth rate of just under 2 percent, for another six or seven years.

Thus the political take on job growth will remain combative throughout the coming presidential campaign season. President Obama can justifiably argue that his administration's job stimulus and job growth policies are on track, though they still need constant support. Mitt Romney, or whomever the GOP makes its presidential nominee, of course will continue to claim that it's Obama's fault that the economy has not grown fast enough to supply enough new jobs for all those who want them. It's hard to believe, however, that Republicans' policies for austerity -- more government job cuts, higher interest rates and slashing federal grants to states -- would not harm the economy and nip recovery in the bud.

The current unemployment dilemma demands more than the GOP recipe. The Labor Department reports that the total number of unemployed, though shrinking, remains at 12.8 million; 43 percent, or 5.5 million, have been out of work for more than six months. Underemployment as of January also leaves another 8.2 million people still working part-time when they actually want full-time jobs.

These numbers suggest a deep well of Americans who will find current unemployment intolerable until they can find decent jobs that fit their skills. Yet given current choices, more Americans now say they trust Obama's economic policies more than the Republicans' proposals. Obama's stimulus and job-growth plans would have performed better if Republicans had supported them rather than slashing and trashing them. Regardless, they did help stabilize the economy from the free-fall it was in -- i.e., 700,000 jobs were lost in a single month at the bottom of the trough that destroyed eight million jobs -- due to financial implosion when he took office.

Rebuilding from the Great Recession was destined to be a decade-long task. Intervening shocks -- the BP oil spill, the Japanese tsunami/nuclear crisis that disabled the supplier train of electronics and computer chips to western economies, the Greek bailout and ensuing crisis among American trade partners in the euro-zone economies -- have made recovery harder. So has the deadly drain of offshoring manufacturing and white collar jobs to Asia.

Given all these obstacles, plus Republican attempts to sabotage recovery for partisan reasons, the current progress is better that might have been expected. With fair support for a change, and no unexpected surprises overseas, progress toward a recovery actually could strengthen.