Unemployment rate drop misleading

Obama, Democrats and The Washington Post
will be highlighting the headline that the unemployment rate dropped to 9.4
percent in December, and it is certainly good news that the economy created
297,000 new jobs for the month.

However, what isn’t being reported as widely is that a majority of the .4
percent unemployment rate drop can be credited to the 434,000 people who left
the workforce in December. If the number of people in the workforce had
remained unchanged, the rate would have dropped, but by a much more modest .2
percent.

Additionally, the 6.4 million people who have been unemployed for more than 27
months remained essentially unchanged — meaning the job growth did not help
those who have been looking for an extended period of time.

It is also disturbing that the 8.9 million people who are in part-time jobs for
economic reasons — meaning they want full-time employment — likewise remained
unchanged.

So while it is great news that our economy created new jobs in December, the
underlying unemployment situation remains extremely dire — as even with the
good news, December marks the 19th month in a row that the unemployment rate has
been at 9.4 percent or higher, the longest sustained time period where it has
been this high since the Great Depression.

In the months ahead, our nation’s economic pump will be primed with
approximately $1.5 trillion in new stimulus due to the just-passed tax legislation
and the FEDS QE2 money-printing plan, which hopefully will continue the
private-sector job growth.

Hopefully this will give the new Congress the breathing room to resist new
spending schemes, and take on the really hard work of rapidly getting our
nation’s fiscal house on a path to solvency. Unless Congress cuts the size and
scope of government spending, our nation may have to get used to having around
15 million people unemployed as the new norm.

Rick Manning is the communications director of Americans for
Limited Government, and the former public affairs chief of staff at the U.S.
Department of Labor under Secretary Elaine L. Chao. Follow Rick on Twitter @rmanning957.