US jobs: US jobs will still be an issue for the next White House race. Even based on February’s better data, released on Friday, it will take 39 months to replace the rest of the nearly 9 million jobs lost in the recent downturn — and in that time the labour force will grow, too. Presidential candidates should reckon on joblessness still blighting the economy come, November 2012.
The nonfarm payroll employment increase of 192,000 was a welcome improvement on January’s originally reported 36,000, and even better than it looked — private-sector employment increased by 222,000 and previous months’ figures were revised up by 58,000 jobs.
That said, the edge downward in the unemployment rate to 8.9 per cent was somewhat artificial. The decline in the jobless rate since November, when it stood at 9.8 per cent, has been flattered by a shrinking labour force. Longer term, while the American population has increased by 5 million since 2008, the labour force has declined by one million. That means the participation rate has shrunk from 66 per cent to 64 per cent.
As far as the outlook goes, a continuation of the job creation seen in February would wipe out the remaining 7.5 million jobs lost since the pre-recession peak in January 2008 in a little over three years. However, with the adult population increasing by around 2 million a year — and assuming the workforce participation rate has also recovered to 2008 levels by that time — the unemployment rate might even be higher than it is today, because there could be 10 million more people needing employment.
In 18 months’ time, when election fever again grips America, the headline unemployment rate may have declined further, thanks to job creation outmatching workforce growth. But it looks unlikely to be low enough to take unemployment off the agenda. Unless job creation has accelerated dramatically by then, the number of long-term unemployed and other discouraged workers will still be abnormally high. That makes for both an important election issue and a painful reality.