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Over a million new jobs this year




With the October jobs data, we see that the two survey methods are now yielding about the same result: year to date, the U.S. economy has created between 1.1 and 1.4 million jobs (according to the establishment and household surveys, respectively). Prior to this the household survey had been registering about 1.8 million new jobs, significantly more than the establishment survey. I think it is safe to say that private sector jobs now are rising at the rate of about 1% per year. That's not enough to bring down the unemployment rate, of course, because the labor force tends to grow by about that much each year. But it is growth, and it is progress, however slow. It's even somewhat better than the recovery following the 2001 recession, when according to the establishment survey it took the economy two and a half years to create a million new jobs.


This next chart shows that the public sector workforce continues to shrink, having now shed about 350K jobs since the end of 2008. That's essentially unprecedented, but probably necessary given how much public sector bloat there had been in prior years.

If I were advising Fed Chairman Bernanke, I would be telling him that the QE2 program he recently announced—an unprecedented and potentially highly risky experiment in monetary stimulus—should be put on hold until evidence of a faltering economy and deflation actually become threatening. You don't drop money out of helicopters just because the economy isn't growing as fast as you'd like it to.

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