Little job growth, falling unemployment rate: What does it mean?
Little job growth, falling unemployment rate: What does it mean?
TEXT OF STORY
STEVE CHIOTAKIS: The nation’s economy created 36,000 jobs last month. That’s not even enough to keep up with population growth, let alone jump start the economy. And yet the unemployment rate fell almost half a percent in January, to 9 percent. The lowest rate in almost two years.
Let’s try and make sense of these mixed labor signals. Jill Schlesinger is editor at large at CBS/MoneyWatch. She’s with us live from New York, as she is every Friday. Good morning Jill.
JILL SCHLESINGER: Good morning.
CHIOTAKIS: All right, still, these few jobs being created — 36,000 — lack luster number again. But the unemployment rate fell almost half a percent. What’s going on here?
SCHLESINGER: Well you know these are two different surveys. When we talk about jobs added, it’s a survey of businesses. When we talk about the unemployment rate, that’s a survey from households. And so, really what happens is sometimes these numbers get distorted because if people just stop looking for work, they’re not included in the labor pool and that can push down the unemployment rate, but not for the right reason.
CHIOTAKIS: All right. This is like watching a glacier, thought. I’ve got to admit. Why is this taking so long to turn the corner on jobs?
SCHLESINGER: I think the biggest issue here is that while we have seen growth over the past 18 months, it has been so inconsistent. And when you look back over almost any three month period, you can’t find three consecutive months where we’ve had robust growth, where we’ve seen great demand from consumers and from businesses. So as a business owner, you ask yourself, “Well why am I going to take the risk of adding a new job when I don’t know if next month’s the bad month or the beginning of the next leg down.” So I think we need consistent growth. That would go a long way into making employers feel more comfortable adding to their payroll.
CHIOTAKIS: Consistency’s the key, eh?
SCHLESINGER: Absolutely.
CHIOTAKIS: Jill Schlesinger have a great weekend.
SCHLESINGER: You too.
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