Friday, December 4, 2009

A Glimmer of Hope?

Like everyone else, I hope that today's modest decline in the unemployment rate — in raw numbers, it's the smallest decline since the recession began two years ago — means that the seemingly endless monthly six–digit job losses we've seen for more than a year are finally over.

But I don't have a crystal ball — and neither does anyone else. So, until there is evidence that we're adding jobs, I will be wary. Such evidence is accumulated over a period of time, not in a single month.

Even so, the symbolism of this news — coming at the start of the Christmas season — was not lost on the president. "This is good news," Barack Obama said, "just in time for the season of hope."

Internally, he may have been doing cartwheels. Externally, he said the report was "modestly encouraging." I'm glad he tempered his enthusiasm.

Until an actual trend can be identified, it's best for everyone, not just the president, to avoid getting carried away.

As I have often mentioned, I am not an economist, but it seems to me that, while a drop in the job losses is welcome news during the holidays, I wonder how much of an influence seasonal hiring may have on the numbers. Let's wait and see what the numbers look like in January and February.

I am also mindful of the fact that we've been down this road before. The June jobs report was not as severe as expected, and there was much rejoicing — until the next month, when job losses were worse than expected.

Then, in August, we were told the unemployment rate actually had gone down, and, again, there was much rejoicing. But I was aware of what we had been through earlier in the summer, and I urged people not to get carried away.

Sure enough, by Labor Day, the unemployment rate hit a 26–year high, and we were back in the doldrums.

Something is happening, but with these monthly fluctuations, it is hard to tell precisely what. And, in case you hadn't noticed, we're still losing jobs — far fewer than we've been losing, but it's still a negative. And, even when we start adding jobs again, we need to add several million jobs to be where we need to be. Most of the economists I've heard say it will take at least three to five years to reach that point — and that is the overly optimistic appraisal of the situation.

I want to believe that today's report is a sign that things are clearly getting better. Hebrews 11:1 tells us that "faith is the substance of things hoped for, the evidence of things not seen."

That may be appropriate for spiritual matters, but, when the topic is jobs, I prefer something I can see.

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