The issue: It’s a measure of the recession that 8.9% is good news
In what has so far largely been a jobless recovery, economic growth is finally beginning to produce jobs and make serious inroads on unemployment.
ALL OF THIS is good news for President Barack Obama’s re-election hopes, which more than any other factor are tied to the economy. It is an axiom of American politics that the president gets way too much credit for the economy when it is good and way too much blame when it is bad.
And the economy is clearly improving.
The February unemployment rate fell to 8.9 percent from 9 percent. That may be only a difference of 0.1 percent, but politically it’s a big symbolic difference.
That 8.9 percent rate is the lowest since April 2009, and the fall from November’s 9.8 percent is the steepest three-month decline since 1983.
The Fed expects the rate to hover in the high 8.8 to 9 percent range for the rest of the year and then drop to the 7.5 percent to 8 percent range in 2012, in time for the election. Those numbers aren’t particularly inspiring but what matters politically is their direction. And the Fed expects the rate to continue falling to the 5 to 6 percent range three years from now.
THERE WERE OTHER good numbers out of February as well. The private sector, which counts for 70 percent of the workforce, added 220,000 jobs, more than making up for the 30,000 shed by state and local governments, for a healthy net of 192,000 jobs.
In the all-important battle of expectations, both the rate and the number were better than Wall Street had forecast. And the government’s revised numbers showed that January actually added 63,000 jobs instead of the 36,000 reported.
Further, the underemployment rate, which counts part-time workers who can’t get full-time work and discouraged workers who have given up looking, fell to 15.9 percent, the lowest in two years. All told, 13.7 million Americans are out of work.
SERIOUS PROBLEMS remain: 43.9 percent of the unemployed have been out of work six months or more, 30.4 percent a year or more, and the longer one is out of a job the harder it is to find one. And joblessness in California continues to be higher than in most other states.
Still, it’s a measure of how hard the recession that 8.9 percent looks like — and is — good news.