Today the Labor Department announced that the unemployment rate has declined to 7.8 percent. It’s the first time the rate has fallen below 8 percent since President Obama was inaugurated in January 2009.
Unfortunately, the economy only created 114,000 new jobs last month, which is just about that number of new workers who enter the job market every month. Although the reported jobs creation number was small, the unemployment rate dropped sharply — from 8.1 percent to 7.8 percent — because the number of people who said they were employed rose by 873,000.
It being the middle of an election campaign, you’d expect the statistics to become a political football, and that’s exactly what has happened. President Obama says the report shows the economy is on the right track and we shouldn’t turn back. Mitt Romney says the economy isn’t producing enough jobs and that our current economy isn’t what a real recovery looks like.
I’m happy that the unemployment rate has fallen below 7.8 percent, but I’m more inclined to agree with Mitt Romney than the President on the import of the numbers. An economy that creates 114,000 jobs is basically treading water, and a 7.8 percent unemployment rate is unacceptably high and nothing to strut about. And, not being a government statistician or economist, it’s hard for me to reconcile the report that only 114,000 jobs were created with a surprising, 873,000-person increase in the ranks of the employed. Is the difference people who are working at home, or working part-time, or something else?
I can only go with what I am seeing here in central Ohio, and I’m not seeing signs of a budding recovery, significant hiring, or great optimism on the part of my fellow citizens. I hope I’m missing those signs — but until I see them I’m going to reserve judgment and see if we get more information about where those 873,000 newly employed people came from.