Friday’s employment report from the Labor Department brought bad news for economists as well as for America. Economists thought that the January unemployment rate would rise from 9.4 percent to 9.5 percent–it fell to 9 percent. They thought that the economy would create 148,000 jobs in December, whereas the number announced Friday is 36,000. One reason the unemployment rate fell is that the civilian labor force declined by half a million last month as discouraged workers left the labor force. With fewer workers in the labor force, the unemployment rate is lower. The labor force participation rate continued its downward trend, from 64.3 percent in December to 64.2 percent in January, and is now at the lowest level since March 1984. The Labor Department’s broadest measure of unemployment, which includes discouraged workers and those working part-time when they want full-time jobs, stands at 16.1 percent.
The administration and Congress needs to focus on job creation. This means reducing government spending and doing away with burdensome regulation, such as the Environmental Protection Agency’s plans to regulate carbon and the Labor Department’s plans to impose additional burdens on employers.
With the tension in the Middle East, how about resuming the issuance of permits for oil drilling in the Gulf, which is causing the loss of thousands of jobs in Gulf states?
Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.
