January 11, 2010 - Unemployment numbers in December remained high and the economy continued to shed jobs. On a seasonally adjusted basis, there were somewhere between 85,000 and 589,000 fewer jobs available in December than in the previous month. And although the mainstream press has stuck with the 85,000 number based on government's payroll survey, the number is unrealistically optimistic if you believe the numbers that came out of a completely separate government survey. This even with the many temporary jobs that are created each holiday season. As bad as these numbers appear, they are not the only bad news on the jobs front. The Associated Press has now released an analysis of stimulus spending on road construction. They found that this type of spending has done nothing to stimulate job growth.
The unemployment numbers released last Friday were significantly worse than anticipated. Some economists had actually expected to see job growth in December. The payroll survey is the most widely used but probably the least accurate. It includes seasonal adjustment figures which are typically designed to smooth out large increases or decreases in any particular month. The Household Survey does not include these adjustments. Based on it, 589,000 people lost their jobs in December.
As the news was released, Congress was considering a $75 Billion stimulus bill for road construction. The Obama administration and Congress have both pushed this type of "shovel ready project", making it central to job creation and economic recovery. But an analysis just released by the Associated Press shows that these types of projects - which have already received Billions of dollars of taxpayer money from the first stimulus bill - have had no effect on the creation of new jobs.
At present, the official unemployment rate stands at 10%. Once underemployed and discouraged workers are included in the number, unemployment rises to 17.3% according to government numbers. But according to John Williams' website Shadow Government Statistics, the actual unemployment rate stands at 21.9%. Williams bases his claim on the fact that the way the government measures unemployment actually changed under the Clinton administration. According to Williams, using the methodology that was in effect prior to President Clinton, 21.9% is the accurate number. If so, unemployment rates today are approaching the same levels as they did in the deepest, darkest days of the Great Depression.
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