As the saying goes, numbers don’t lie. Yet, as we’re often reminded in an election season, they don’t always tell the truth, either.
Republican presidential nominee Mitt Romney says an unemployment rate that hovers near 8 percent is masking the big picture and actually underestimates the weak state of our labor market. Democratic incumbent President Barack Obama agrees, but claims that things could be much worse, and that the jobless rate is trending in the right direction.
If you’re an HR professional with a hand in recruiting and staffing, you’ve probably scratched your head once or twice in recent months and wondered who has a better grasp on the situation. This is, in part, why we started SHRM’s Jobs Blog a year ago this month. Like you, we are trying to make sense of this complicated, slow-growth recovery of the country’s labor market and economy.
As discussed November 2011, there is no magic bullet to reducing the nation’s high unemployment rate. It’s clear that weakened demand is still holding down any large-scale job creation, but in certain markets there remains a mismatch between job openings and job candidates’ skills.
It has been difficult to quantify the skills gap’s effect on actual unemployment, but SHRM members in a variety of industries will strongly attest to its existence.
Now, we’re not going to ask you if you’re better off now than you were a year ago when The Jobs Blog debuted, but let’s compare last year with a few key employment indicators from September 2012. (Note: All data are from the most recent report available from the U.S. Bureau of Labor Statistics).
The unemployment rate was 7.8 percent in September, down from 9 percent in September 2011. The number of “long-term unemployed,” or those without work for at least 27 weeks, was 4.8 million in September, down sharply from 6.2 million in September 2011.
There were 8.6 million people employed part-time for economic reasons in September 2012, which means they could not find full-time work or encountered “unfavorable business conditions.” That’s down from 9.1 million in September 2011.
Elsewhere, the number of “discouraged workers”—defined as marginally attached to the labor force and not currently looking for work—has dropped by more than 400,000 in the past two years.
These are all good signs, but not necessarily cause for celebration. Let’s keep this in mind: Progress may be slow, but it’s still progress, and perspective remains paramount. The country is still recovering from the worst economic contraction since the Great Depression; productivity statistics from the Great Recession of 2007-2009 reinforce this. Subsequent revisions show that the nation’s gross domestic product (GDP) fell 8.9 percent in the fourth quarter of 2008, and another 5.2 percent in the first quarter of 2009. This represents a collective six-month decline of 7.1 percent, or the “deepest six-month contraction of GDP in 50 years,” says Gene Sperling, director of the National Economic Council.
“We knew we were in a serious recession, but we didn’t have the numbers to be aware of how deep a recession it was,” Sperling told members of the National Association of Business Economics in October 2012. “But there have been signs of healing recently across the board. It’s nowhere good enough, but there are signs.”
For more information, please visit SHRM’s Labor Market and Economic Data page.
Joseph Coombs is a workplace trends and forecasting specialist at SHRM.
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