October Unemployment Rate Jumps Upward ==> 10.2%! November 6, 2009

Posted by geoff in News

UPDATE: November numbers are here

The economic for October predictions were 175,000 non-farm jobs lost, and an unemployment rate at or just below 10%. Just based on initial unemployment filings, I think you’d have had to count on people continuing to drop out of the system to get numbers that low.

So what actually happened? As of this morning, the Bureau of Labor Statistics tells us that we lost 190,000 non-farm jobs, and that the unemployment rate has risen to 10.2%. So let’s have a gander at where that puts us on the “OMG Christine Romer and Jared Bernstein Are Teh Suck” chart:

That’s pretty startling. The reason, though, is that fewer people dropped out of the labor force last month. As I’ve mentioned ad nauseam in past posts, the labor market is responding sort of oddly in this recession, with millions of people simply dropping out of the labor force. They’re not counted among job seekers or even discouraged workers – they’re gone completely from the statistics. So a more useful number, I believe, is the number of jobs remaining in the country. Here’s that graph:





A Side Note on the Administration’s Defense of the Stimulus. The President and his economic team have claimed that the plan is working as intended, that they’re on track to save the original goal of 3.6 million jobs, but somehow, despite practically drowning in success, we’re going to have to live with high unemployment for years to come. Oh, and that everything is still Bush’s fault.

These claims have been debunked by a variety of sources, including the AP (and here), the Chicago Tribune, the Denver Post, USA Today, the Wall Street Journal, and blogs such as Political Math (H/T d3ft punk).

But forget the quantitative treatment for a moment and consider what the Obama team’s graph said on a qualitative level. The graph says that within a couple of quarters, the stimulus package will stop the increase in unemployment and reverse the employment trend. That was the real mission of the stimulus. Stop job loss. Get the private sector hiring again.

So no matter how convoluted and fanciful the “jobs created or saved” numbers get, we just have to remember what the point used to be, and realize how far short we’ve fallen. And whose fault that really is.

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