The issue: This time, the good news isn’t diluted by statistical caveats
The unemployment rate fell to 7 percent in November, its lowest in five years, down from 7.3 percent in October, a fairly steep drop as these things are measured.
THIS TIME, the good news was not diluted by the usual statistical caveats — the work force is shrinking, workers have given up looking and thus aren’t reflected in the figures, what little growth there is has been in low-wage jobs, the decline only looks good because the rest of the economy is flat.
The economy added 203,000 jobs last month, for a four-month average of 204,000 August through November. The 200,000 level is where the employment situation begins making real progress. The rate was 159,000 a month April through July.
One positive sign was that high-paying industries added more jobs — 27,000 in manufacturing and 17,000 in construction. Those well-paid jobs are vital to the recovery because the people who hold them tend to spend more and in our consumer-driven economy more spending means faster growth.
But, as the Associated Press noted, “Roughly half the jobs that were added in the past six months through October were in four low-wage industries: retail; hotels, restaurants and entertainment; temp jobs; and home health care workers.
Labor organizers and fast-food workers have orchestrated a drive to raise the federal minimum wage from $7.25 an hour to, ideally, $15 an hour, but the drive seems to have gained little traction and, further, faces opposition in the House of Representatives.
Robust economic growth might change that equation and the economy did grow at a healthy 3.6 percent in the July-to-September quarter but it wasn’t matched by an accompanying growth in consumer spending, which grew at its slowest pace since 2009.
AT THE OTHER END of the economic scale, Wall Street is anxious for some indication of how long the Fed will keep up its $85 billion a month bond-buying program, a stimulus measure in effect since September 2012.
Outgoing Fed chairman Ben Bernanke has said the Fed would end the purchases once the unemployment rate hit 7 percent; other members of the central bank would hold out until the rate reached 6.5 percent. In either case, the Fed seems in no hurry to make a decision, although it could begin tapering off its purchases after it meets later this month.
However we got there, that 7 percent figure has been a long time coming. Perhaps a rate in the 6 percent range won’t take as long. Maybe in the new year.