US jobs: A turning point for the world?
CHICAGO — It’s always the same drill.
On the first Friday of every month, at 8:30 a.m. Eastern Standard Time, a handful of numbers trickles out of Washington, D.C., and onto the news wires. Balding Wall Street analysts and well-coiffed CNBC anchors pore over the digits, divining clues and launching long-winded arguments about what the data portends. Meanwhile the vast majority of Americans yawn, and the rest of the world goes about its daily business.
But not this time.
In its monthly report released Friday, the U.S. Labor Department surprised almost everyone.
It said the U.S. unemployment rate fell to 10 percent in November from 10.2 percent in October. More dramatically, job losses in the world’s largest economy slowed sharply. Nonfarm payrolls — or what the rest of us call jobs — fell by 11,000 last month, a number 10 times smaller than October’s hemorrhage. While the economy is still shedding workers, it was the best jobs showing since the recession began two years ago.
"This is one of those game-changer reports that should fundamentally alter the perception regarding the economy," economist Stephen Stanley was quoted on the Wall Street Journal’s Real Time Economics blog.
"Wow! That is the only description I can make of the November jobs report," Naroff Economic Advisors gushed.
"The economy received an early holiday present in the November employment data, a big upside surprise and the best report in two years," added Joseph Brusuelas of Moody’s Economy.com.
Yes, 15.4 million Americans are still out of work, and almost 6 million have been looking for jobs for 18 month or longer. And, of course, one month of improvement is small potatoes in what has been the worst labor market in generations.
But after the nightmare that the U.S. economy has been through, this November 2009 jobs report is more than a number. It may end up being a turning point for the global economy.
That’s because unemployment is the key to recovery in the U.S. economy, where consumer spending makes up two-thirds of all economic activity. The logic is simple: If people don’t have jobs, they tend not to spend money. No jobs, no spending, no recovery.
And since the U.S. economy produces roughly 25 percent of global output, the world desperately needs Americans to find jobs, and to start spending again. So America needed this bit of good news. And so did the rest of the world.
The timing, too, was pretty good for President Barack Obama who on Thursday held a "jobs forum" at the White House with more than 100 CEOs, academics and other business and union leaders to seek ways to create more jobs.
Obama called Friday’s jobs report "modestly encouraging news," but his joy was tempered: "Good trends don’t pay the rent," the president added.
His chief economist was a bit more optimistic, at least for a professional dismal scientist.
"It is by far the closest we have been to stable employment since the recession began almost two years ago," said Christina Romer, chairwoman of the White House Council of Economic Advisers. But Romer also warned "not to read too much into any one monthly report, positive or negative."
Of course, she’s right. Huge problems remain in the economy, and there are many nasty factors that could derail the U.S. and global recoveries — a sudden dollar collapse, an oil price surge, panics in global financial markets or in the commercial real estate industry, a worsening of the swine flu pandemic, another war, a large-scale terrorist attack, and on and on. Moreover, it could take years before the U.S. unemployment rates get back to a more manageable 5 percent or so.
But at least for one day, and for one month, it felt good to have some hope — here in the United States and around the world — that the long night may indeed be ending. And when that moment does finally arrive you can be sure that it will be jobs leading us all back into the light.
So let’s hang onto that feeling, shall we? At least until Jan. 8 at about, say, 8:30 a.m. Eastern Standard Time.