For the first time in more than eight years the nation’s unemployment rate dropped below 5%.
The Bureau of Labor Statistics reported that 151,000 jobs were created in January bringing the unemployment rate to 4.9%, with jobs being created in retail trade, food services and drinking places, health care, and manufacturing.
President Obama expectedly jumped at the news and issued a statement, “After reaching 10 percent in 2009, the unemployment rate has now fallen to 4.9 percent — even as more Americans joined the job market last month. So this is the first time that the unemployment rate has dipped below 5 percent in almost eight years. Americans are working.”
The president went so far as to chide Republicans, “So, as I said at my State of the Union address, the United States of America, right now, has the strongest, most durable economy in the world. I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire. I guess you cannot please everybody.”
He forgot to include former Secretary of State Hillary Clinton who stated that the economy is not working for most Americans.
The other positive aspect of the report is that hourly wages went up 12 cents to $25.39.
Before the president can take a victory lap, there were some disturbing parts of the report. First, the labor participation rate remained unchanged from the previous month and remained stuck at the historical low of 62.7%, the lowest it has been since 1978.
In the report the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed.
The labor report also showed that the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.0 million in January but was down by 796,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.
Again, before any victory laps can be taken, one also has to understand that if the unemployment rate is at an eight year low, why are more people on public assistance, and in poverty then at the beginning of 2009.
Jobs are being created, but they are not the high wage jobs the nation enjoyed before the recession began.
The Stock Market reacted negatively to the report as a combination of weak earnings and as Market Watch mentioned that the smaller-than-expected increase could add to growing worries about a weakening U.S. economy and even the possibility of recession. U.S. stocks fell in early Friday trading.
Before anyone takes a victory lap the economy is still on shaky ground