It only took one month of job growth to change public perception about the labor markets and overall economy.
First, Harvard economist Jeff Frankel earlier this week proudly announced the recession’s over. Now, University of Oregon economics professor Mark Thoma reluctantly says he’s giving up on pushing policymakers to pass more aggressive fiscal policy to help labor markets. From Thoma:
I’ve been pushing hard for more help for labor markets for quite awhile — at times I’ve thought it was a bit repetitive, but necessary — but it’s probably time for me to give up and accept that we are going to have a slower recovery than we could have had with more aggressive fiscal policy. Unless there is a dramatic reversal of recent indications that we are at the beginning of a recovery, Congress is not going to provide anything more than token help from here forward.
He believes more stimulus funds devoted to creating jobs could help the economy return to full employment sooner rather than later. But with the economy already growing jobs, it looks like Congress may have missed its chance at passing additional fiscal policy.
“I’ll still complain – there’s no reason to let policymakers off the hook – but it’s time to give up the hope that anything more will be done to help the unemployed find jobs,” he says.
UC Berkeley economist Brad DeLong follows up on Thoma’s post and notes his frustration with Congress’ inability to pass a jobs-creation bill. From DeLong:
He is, of course, right. There is right now a stunning disconnect between an Obama administration that says that unemployment is and will for a long time remain unacceptably high and an Obama administration that is not pushing for policies to boost jobs on the scale needed in a continent-spanning economy.
It’s unfortunate that all of this comes after just one month of job growth. As Paul pointed out yesterday, it’s hard to get too excited about 162,000 additional jobs, especially considering its a drop in a bucket compared to the overall work force of 134 million.
With the unemployment rate perched at 9.7%, the broader underemployment rate at 16.9% and the long-term unemployed making up 44% of all the unemployed, this jobs recovery is destined to be sluggish, at best. And without any sort of jobs bills in the offing, expect years to pass before we get anywhere close to full employment.