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The December Jobless Figures Are No Joke

President Obama could not have looked more morose in reacting to the news that the December nonfarm payroll showed a further loss of 85,000 jobs, taking the unemployment rate to 10%. It’s really tough to put lipstick on this pig. Some 4.2 million have lost jobs on Obama’s watch, and 7.2 million since the recession began in December, 2007. Total unemployment now stands at 15.3 million, and 25 million if you used the U6 figure that includes discouraged workers. Some 661,000 dropped out of the workforce, the duration of unemployment lengthened, and what real hiring did occur, was only among temporary workers, who gained 47,000 jobs. These are not exactly the sort of numbers that are going to send you shooting out of the blocks in the sprint towards the midterm elections. It is screamingly obvious now that while big business has stopped large scale layoffs, they are just plain not hiring. Perhaps they see the same thing as me, the deadening impact of a slowdown in government spending, or worse, a double dip recession, that would kill them if they started adding overhead now. They have also probably figured out that starving, bankrupt consumers don’t buy much. Perversely, this means that productivity will keep soaring, as will corporate profits, which is how the stock market was able to hold its own today, despite the dismal figures. There is no doubt that the administration will take the message home that not only was the last Keynesian inspired stimulus package too small, another one is needed immediately. But you can bet the next one will be far more jobs focused than the last, which had more pork than a Chicago slaughterhouse. How about a new interstate system? That would be nice. Conservatives will be outraged, insisting that the only way to economic salvation is to put more money in consumers’ pockets though tax cuts. This will certainly mean bigger deficits, followed by more borrowing, and then higher taxes. It also makes the Fed’s public discussion about winding down quantitative easing a bit awkward. Expect zero interest rates to take on a new lease on life. To support the piece I wrote on January 7 claiming that job growth has been zero (click here for the story)for the last decade, check out the table below.