Uncertainty over ‘fiscal cliff’ is restraining business growth and jobs
by Don McKee
December 14, 2012 01:27 AM | 1464 views | 1 1 comments | 7 7 recommendations | email to a friend | print
Don McKee
Don McKee
As our country edges closer to the dreaded fiscal cliff, sluggish job growth adds to the troubling outlook.

Although applications for jobless benefits dropped by 29,000 last week, a two-month low, the Bureau of Labor Statistics quickly pointed out that most of the decline came because there was an earlier spike in claims after Superstorm Sandy. Businesses added only 146,000 jobs in November, roughly the same as the average monthly gain of 150,000 in the past year.

The unemployment rate slid to a four-year low of 7.7 percent, down from 7.9 percent in October, but again this is deceptive because the reality is that the rate went down mainly because of unemployed people giving up on job hunting. In the world of Washington employment statistics, you are not counted as unemployed if you were not actively trying to find a job four weeks before the BLS survey.

The number of unemployed nationally was pegged at 12 million for last month, about the same as October. Among teens the rate was 23.5 percent and among blacks 13.2 percent for November. The long-term unemployed, out of work for 27 weeks or longer, was static at 4.8 million, or 40 percent of the total unemployed.

Add to that 2.5 “involuntary part-time workers,” essentially the same as a year earlier. But these people are not in the official “labor force” even though they “wanted and were available for work and had looked for a job some time in the prior 12 months.” Officially, they are not unemployed because they had not tried to find work in the four weeks preceding the survey. No doubt they feel better by knowing that officially they are not unemployed.

Add to that nearly one million “discouraged workers,” defined as people not looking for work because they believe there are no jobs available for them. So when you add up the unemployed, discouraged and under-employed, the figure jumps up by millions more and the real unemployment-underemployed rate tops 14 percent.

Georgia’s unemployment rate for November hasn’t been released yet, but in October there were 36,000 jobs added, pushing the rate down from 9 percent to 8.7 percent. Unlike the national situation, the decline did not result from fewer people looking for jobs, according to Labor Commissioner Mark Butler. Most of the new jobs were in retail, education, health care, and professional and business services, and the good news is that Butler sees Georgia’s labor force getting “stronger and stronger.”

Cobb’s jobless rate declined in October to 7.5 percent, down from 7.7 percent in September, and Commission Chairman Tim Lee said the county’s economy “is inching upward,” as the Journal recently reported. But the problem, as economist Dr. Roger Tutterow explained, is that jobs are being added “at a lower rate than what would be considered a healthy economy.”

And that’s because many businesses are not going to add jobs until they know whether Washington is going to send us all over that fiscal cliff.


Comments-icon Post a Comment
December 14, 2012
From Bloomberg yesterday:

CEOs’ Letter

Business executives are stepping up their efforts to push for a deal. In a letter yesterday, more than 150 chief executive officers, including JPMorgan Chase & Co.’s Jamie Dimon and Goldman Sachs Group Inc.’s Lloyd Blankfein, called on Obama and House Speaker John Boehner of Ohio to compromise on a deficit- reducing budget agreement that would include new tax revenue and spending cuts.

*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, and spam will also be rejected. Please read our terms of service for full guides