Economy Alarm: 1.1 Million Americans Stop Looking for Jobs

1.1 Million Americans Stop Looking for Jobs

Financial Markets, Employers Nervous About Unstable Economy

Democrats Claim the Stimulus Has ‘Created or Saved’ Over a Million Jobs

“Vice President Joe Biden on Friday: The stimulus ‘is responsible for over 1 million jobs so far.’

“White House senior advisor Valerie Jarrett on Oct. 18: The stimulus ‘really staved off a disaster and we saved millions of jobs around the country.’

“White House release June 2: ‘Just over 100 days in, over 150,000 jobs have been created or saved.’

“White House senior advisor David Axelrod on June 7: ‘The stimulus itself has produced hundreds of thousands of jobs.'” (“Inconsistent messages on Obama’s stimulus package,” The Los Angeles Times, 10/31/2009)

Credibility Crash: Yet, 1.1. Million Americans Give Up Hope of Finding Employment

Employers unexpectedly cut 20,000 jobs in January, but the unemployment rate surprisingly fell to a five-month low of 9.7 percent, according to a government report on Friday that hinted at some labor market improvement starting to take root.

The Labor Department said the economy shed 150,000 jobs in December, compared to 85,000 previously reported, but November was revised to a gain of 64,000, up from 4,000. Annual benchmark revisions to payrolls data showed the economy has purged 8.4 million jobs since the start of the recession in December 2007.

Analysts polled by Reuters had forecast payrolls gaining 5,000 and the unemployment rate to edge up to 10.1 percent in January from 10 percent. Median estimates from the top 20 forecasters expected payrolls to be unchanged last month.

A sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of ‘discouraged job seekers’ rose to 1.1 million in January from 734,000 a year ago.

With Americans increasingly anxious about high unemployment, President Barack Obama has declared that job creation will be his top priority in 2010.

Obama’s fellow Democrats fear voters could punish them in November congressional elections if the administration fails to make headway in tackling the high jobless rate.

Financial markets have grown nervous about the prospect of unemployment in the United States remaining high for a long time. The economy resumed growth in the second half of 2009 and labor market healing is crucial for a self-sustaining economic recovery to take root.

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Last month, the services sector added 40,000 jobs after shedding 96,000 positions. The figure included a rise in federal government employment, partly as a result of the hiring of staff for the 2010 Census. Temporary help employment rose 52,000, maintaining a rising trend seen in the past month.  (“Payrolls fall in January, jobless rate at 5-month low,” Reuters, 1/05/2010)

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