Yesterday’s September jobs report was a welcome surprise, a signal that another recession may be averted. With 103,000 new jobs in the month and an upward revision of 99,000 for July and August, the jobs picture looks less bleak than it did a month ago. More Americans also started looking for work and the labor force expanded by 423,000, according to the Labor Department’s household survey.
Steve Moore on the jobs report. Plus, studies show more Americans receiving government benefits and paying no federal income tax.
However, the unemployment rate held steady at 9.1%, some 6.2 million Americans have been unemployed for more than six months, and the economy is producing far fewer jobs than you’d expect in a typical recovery from recession. Over the past six months the U.S. economy has created an average of 72,000 jobs a month, roughly half the pace needed to chip away at the jobless rate. The hardest hit have been minority workers, with the jobless rate for blacks still 16%, Hispanics 11.3%, and teens 24.6%.
As it happens, the biggest one-month jobs gain in American history was at exactly this juncture of the Reagan Presidency, after another deep recession. In September 1983, coming out of the 1981-82 downturn, American employers added 1.1 million workers to their payrolls, the acceleration point for a seven-year expansion that created some 17 million new jobs.
The difference between then and now isn’t the magnitude of the recessions but the policies the U.S. pursued to restore growth. In the Reagan expansion, spending and tax rates were cut, regulations were eased, and government was in retreat. Today, we’ve had a spending and regulatory boom, the threat of higher tax rates, and a general antibusiness political climate. Policies have consequences.