Whatever politicians from either side of the aisle try to tell us, the improvement now beginning to evidence itself in national employment numbers are not their doing. Those hopeful signs are the direct result of capitalism at work. For a year we as a nation have watched and wondered about lagging employment as we listened to experts talk about improving core factors in the economy. During the same period, government stimuli set about to stabilize the economic ship, largely through bail outs and protecting the jobs of government workers. Those efforts may have helped to keep the economic ship from sinking entirely, but the ship could not be righted until private enterprise regained its rightful role.
Today the Labor Department reports that the American economy created 290,000 jobs in April. That follows significant job creation in March. But it’s what is inside the numbers that matters. Of the 290,000 new jobs, 66,000 were census workers, a number lower than expected. The remaining almost quarter of a million were predominantly private sector, including 45,000 new manufacturing jobs. Other good news includes a reduction to 27,000 in new jobs from temp agencies, meaning more of the new jobs are permanent.
And the work week numbers are up to 34.4. That’s the number of hours worked per week by the average employee. An increase in that number indicates that private employers see a need for more work hours, and, as the work week statistics saturate, those employers will need to move beyond expanding the work week to new hires.
Even the number that appears to be negative on its face represents good news. The unemployment rate increased from 9.7% to 9.9% despite rising employment. To understand how that can be good news requires knowing how the unemployment rate is calculated. It is not, as some believe, a percentage of total unemployed. It is a percentage of those in the active work force, i.e. looking for work. The increase to 9.9% means that people, now hopeful of finding work, are returning to the active labor force in numbers greater than the job creation numbers. While not quantifiable, that phenomenon indicates a positive mood change in the job seeking population that bodes well going forward.
This is not to say that the seas will be calm and the wind always brisk. Long term unemployment, those out of work more than six months, remains intractably high. There will be rogue waves like yesterday’s stock market fall. Consumers remain wary, though spending and confidence are picking up. Individual savings and investment rates are still too low for sustained aggressive growth. Debt capital formation remains difficult to obtain, and excessive government borrowing exacerbates the problem. Segments of the economy related to real estate and construction continue to lag. But there are serious signs of hope now.
Today the politicians will try to make political hay of these numbers. Those on one side will laud the new hire numbers and try to take credit. Others will criticize the raw unemployment percentage and try to cast blame. Don’t buy into it. This isn’t political genius or sloth; it’s capitalism at work. We have reached a point where private enterprise has returned to the picture in a positive and forceful way. Whatever good or ill has been wrought by political policy in the past year or two, the time has come for government to step aside and let the true engine of our economy retake the reins.
Cross posted at Elijah’s Sweete Spot, where COMMENTS DISCUSSION are Disqus™ enabled.
Contributor, aka tidbits. Retired attorney in complex litigation, death penalty defense and constitutional law. Former Nat’l Board Chair: Alzheimer’s Association. Served on multiple political campaigns, including two for U.S. Senator Mark O. Hatfield (R-OR). Contributing author to three legal books and multiple legal publications.