The U.S. economy added a modest number of new jobs last month, and the nation’s unemployment fell slightly, to its lowest level since April.
Unemployment remains a pernicious problem for the country, despite October’s modicum of good news, and attention is turning once more to the impending cut-off of unemployment benefits for millions of out-of-work Americans.
The nation added a net 80,000 new jobs in October, according to statistics reported by the federal government on Friday. The U.S. unemployment rate dropped to 9 percent, from 9.1 percent. The number of new new jobs created in October is well below the numbers required to start to seriously reduce the current high level of unemployment.
Long-term unemployment remains a particular concern, which in turn, brings new urgency to the expiration of emergency unemployment insurance benefits at the end of the year. That will cut millions of jobless Americans off from funds they rely on to keep their heads above water.
“Today’s employment report shows that jobs remain scarce, especially for the long-term unemployed. More than two-fifths of the unemployed have been looking for a job for more than six months — and, according to a recent Pew Economic Policy Group Report, nearly a third of the unemployed have been looking for a job for more than a year,” Chad Stone, chief economist at the Center for Budget and Policy Priorities, an independent Washington think tank, says in a statement Friday. “Under these conditions, policymakers would be both heartless and economically unwise to let federal emergency unemployment insurance (UI) benefits expire at the end of this year.”
Economic forecasters project unemployment to remain high for several years to come, expecting thats the unemployment rate will range from 7.8 to 8.2 percent in 2013 and from 6.8 to 7.7 percent in 2014.
President Obama’s American Jobs Act includes an extension of federal emergency unemployment benefits for another year, but congressional Republicans thus far have blocked any further action on the jobs bill.
Allowing unemployment insurance to expire would impose further hardship on long-term unemployed workers who are already hard-pressed to find a job, Stone says. It would also remove a valuable tool for strengthening the recovery; the Congressional Budget Office (CBO) and other analysts rank unemployment benefits as one of the most effective means to support economic activity in a weak economy, he says.
“Congress has never let federal emergency UI benefits expire when the unemployment rate was higher than 7.2 percent — a far cry from today’s 9 percent,” Stone adds.
Although Congress has devoted much of the year to addressing the long-term federal budget deficit, policymakers should not let that concern eclipse efforts to address the immediate problem of a huge jobs deficit, Stone says. He notes that both Federal Reserve Chairman Ben Bernanke and CBO Director Douglas Elmendorf have testified that there is no contradiction between implementing policies to boost economic growth now and implementing policies to impose fiscal restraint that take effect several years from now, when the economy is stronger.
Scott Nance is the editor and publisher of the news site The Washington Current. He has covered Congress and the federal government for more than a decade.