Drop In Jobs Report Slight, But Still Good News

For the first time in more than a year, the percentage of Americans who are unemployed dropped — slightly. Guest host Daniel Zwerdling discusses the latest jobs report and other developments in the economy with David Leonhardt, an economics columnist for The New York Times.

DANIEL ZWERDLING, host:

This is WEEKEND EDITION from NPR News. I'm Daniel Zwerdling.

We got some good news yesterday about the economy - well, it wasn't exactly good news, but it was less bad than economists expected. For the first time in more than a year, the percentage of Americans who are unemployed dropped slightly. The Labor Department said the official unemployment rate fell last month to 9.4 percent.

David Leonhardt writes about economics for the New York Times. He joins us on the phone now. David, good morning.

Mr. DAVID LEONHARDT (New York Times): Good morning, Daniel.

ZWERDLING: So how are you reacting to this news? A little more upbeat? What?

Mr. LEONHARDT: Definitely. Let's set aside the fall in the unemployment rate, which is actually a little bit of a statistical mirage and a technical issue. The real issue here is that the pace of job loss has really slowed. We lost about 250,000 jobs last month, which is obviously still not good at all. But we were losing 700,000 jobs a month in December and January.

And this is a real, real slowdown in job loss. It was better than economists expected. And in order for things to get good, they first have to get less bad, and that's certainly what this report showed.

ZWERDLING: So when you're bleeding less than you were, you're happy.

Mr. LEONHARDT: That's right. That's right, particularly when, I guess, the pace of bleeding trails off even more quickly than you might think. So this is definitely, definitely good news. The job market is still terrible - and the unemployment rate is likely to continue rising.

In fact, the technical issue that I referred to is the fact that the reason the unemployment rate fell is that more people stopped looking for work and thus weren't counted as officially unemployed.

ZWERDLING: So what we do we do about that? I mean, that's a huge problem.

Mr. LEONHARDT: It is a huge problem. And if we look at a broader measure of unemployment that includes some of those people as well as people who are working part-time and want to be working full-time, the unemployment rate is up around 16 percent.

ZWERDLING: Yikes.

Mr. LEONHARDT: Rate of under and unemployment is up around 16 percent. But even that makes the point, 'cause that rate hasn't budged in the last two months, whereas a year ago it was 10 percent and it rose very sharply to 16 and sort of held steady for the last two months.

ZWERDLING: So I guess here's one of the big questions about all this: Is this improvement, this slight improvement in unemployment, is it because of the Obama administration's stimulus plan?

Mr. LEONHARDT: It is in part because of it. I think that is giving credit too narrowly. So I would say the stimulus plan has made a difference. The stimulus plan is flawed. It could've spent money more quickly. It could've done things a number of ways better. But the stimulus plan, at its root, is really doing some good.

I mean, two separate research firms estimate that it's already saved 500,000 jobs. Kristie Roamer, a top economist for President Obama, was able to point out this week that countries that had smaller stimulus plans, like France, have done worse this year.

But I would say that probably leading the list is the Federal Reserve. The Fed's actions here have been incredibly aggressive. And then we should also remember that it's not just the stimulus plan. There have also been efforts by the Treasury Department and we should remember that economies have normal cycles.

And so the fact that we're starting to see some recovery is in part simply due to the normal cycles. But I think policy deserves a lot of credit here.

ZWERDLING: And David, remind us how much have they spent on the stimulus already and how much is left to spend that might affect the economy even more.

Mr. LEONHARDT: The stimulus package is about 780 billion, but really 80 billion of that is just stuff they would've done anyway. So call it 700 billion. They've spent close to 150 now. And so what that means is they still have 550 to go and we should expect that the stimulus plan continues to support the jobs market for pretty much the next year or so.

ZWERDLING: David Leonhardt writes about the economy for the New York Times. David, thanks so much for joining us today.

Mr. LEONHARDT: Thanks for having me.

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