Political India: Engaging America

The United States Bureau of Labour Statistics has announced that in December non-farm payroll employment rose by 200,000 and the unemployment rate dropped to 8.5 per cent in a sustained if slow downward trend. The news is likely to bring cheer to Democrats and the White House in an election year focused on the economy. 

Noting that the end of 2011 saw the economy gain jobs in transportation and warehousing, retail trade, manufacturing, health care, and mining, the BLS said in its monthly report on Friday that unemployment rate declined by 0.6 percentage points since August.

However, it cautioned that the labour market conditions for the long-term unemployed, those jobless for 27 weeks or more, did not change significantly remaining at 5.6 million, or 42.5 per cent of the total number of those unemployed.

Unlike previous months in 2011 though, there was little change in the civilian labour-force participation rate at 64 per cent and the employment-population ratio at 58.5 per cent, suggesting that the drop in the unemployment rate was due to new hires and was a sign of improving labour market health.

Despite this positive trend the BLS statistics indicated that a bulk of individuals considered “marginally attached to the labour force” in December was scarcely different from a year earlier at nearly 2.5 million.

These individuals, who the BLS does not count as participating in the current labour force, were those who wanted and were available for work, and had looked for a job sometime in the prior 12 months but had not searched for work in the four weeks preceding the survey for reasons such as school attendance or family responsibilities.

Within this group marginally attached individuals is a subsection of those labelled “discouraged workers” and they numbered 945,000 in December. These were persons not currently looking for work because they believe no jobs are available for them.

Sectors that made a major contribution to December’s job gains included transportation and warehousing, where employment rose “sharply”, adding 50,000 new positions, the BLS said.

Retail trade was said to have continued to add jobs, with a gain of 28,000 and manufacturing employment expanded by 23,000. The health care sector similarly expanded in December with an upward tick of 23,000 jobs and leisure and hospitality, employment in food services and drinking places added 24,000.

However suggesting continuing downward pressure from deep budget cuts in federal and state governments, which have affected public sector employment, the BLS noted that government employment changed little in December but was down by 280,000 over the year. Job losses in 2011 occurred in local government; state government, excluding education; and the U.S. Postal Service, the report said.

Observers generally agree that the trends in these statistics between now and November, the month of the next presidential election, will be one of the top factors influencing voter behaviour in that election.

President Obama has continued to keep the economy in his sights in his campaigns this year, winning a major victory last month when House Speaker and Republican John Boehner agreed to the White House plan for extending the payroll tax cut for middle class Americans.