Friday, December 2, 2011

Good News, Bad News

The Lehmann Letter (SM)

“The unemployment rate fell by 0.4 percentage point to 8.6 percent in November, and nonfarm payroll employment rose by 120,000, the U.S. Bureau of Labor Statistics reported today.”

That’s the first sentence from today’s Bureau of Labor Statistics employment report:

The unemployment rate fell as discouraged workers left the labor force, even though employment grew by 120,000. As this letter has said many times: Job growth must be twice as great, month after month for several years, before full-employment is restored. How will that happen?

Job Growth

(Click on chart to enlarge)

(Recessions shaded)

The chart illustrates current events as well as past success. Notice today’s plateau forming around 100,000 and earlier periods growing at over 200,000. This is just another inadequate plateau, similar to others we have seen develop across the data: Residential construction, auto sales, industrial activity and so on. We need a boost. From where will it arise?

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© 2011 Michael B. Lehmann

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