Ball State economist Michael Hicks says that while the economy added 157,000 new jobs last month, it’s still too few to make a significant dent in the unemployment rate.
The U.S. Department of Labor announced this morning that the unemployment rate edged higher to 7.9 percent. The organization also revised recent hiring trends, estimating an average of roughly 180,000 jobs were created per month in 2012 and 2011, up from previous estimates of about 150,000.
“Job creation numbers remain too low to absorb jobs lost in the recession, which is a familiar and sad story,” says Hicks, director of the Center for Business and Economic Research (CBER) at Ball State. “More troubling is the big spike in those unemployed for less than three months. Almost 300,000 more jobless workers have been unemployed for a short period, which suggests a large recent spike in joblessness. About half the growth in employment last month can be attributed to part-time workers who cannot find full-time work.”
He believes America is saddled with a very week job market and nation has yet to feel the full impact of the January payroll tax increase, which will shrink the demand for workers in the coming months.
“Moreover, the good news on income last month was a mirage as incomes spiked because so many firms paid dividends in advance of the fiscal cliff,” Hicks says. “All around, only the stabilization of the housing market offers any real good news for the U.S. economy.”