TEXT OF INTERVIEW
STEVE CHIOTAKIS: Tomorrow, the Labor Department will release its all important January employment report. The stock market’s climbing, retail sales and consumer confidence are up as well. What many Americans are waiting for now is for the labor market to catch up.
Marketplace’s Mitchell Hartman has been following the employment story for the past few years. And he’s with us now. Good morning Mitchell.
MITCHELL HARTMAN: Good morning Steve.
CHIOTAKIS: So what should we expect? This is the first employment snapshot of 2011, right?
HARTMAN: Right, and economists think we probably another 125,000 jobs in January. That’s pretty respectable. And it would also be a nice improvement from December; the number in December barely scraped 100,000. The unemployment rate, though, probably edged up to 9.5 percent. Look, it’s a lot better than when the economy started recovering from the Great Recession — it was completely jobless at that point. Now we’ve been adding jobs every month for more than a year.
CHIOTAKIS: All right, more than 100,000 jobs month after month. That sounds like solid job growth. But you say the unemployment rate could actually go up? Why is that?
HARTMAN: One reason is a kind of a good news leads to bad news scenario. So jobs are finally being created again, and that news trickles back to people who had given up looking. So they come out of the woodwork and unemployment actually gets worse for a while. Here’s Heidi Sherholtz of the Economic Policy Institute.
HEIDI SHERHOLTZ: That pool of missing workers numbers around 4.4 million right now. That’s going to put upward pressure on the unemployment rate, because the minute a discouraged worker submits their first new application for a job, they have just entered the labor force as an unemployed person.
CHIOTAKIS: All right Mitchell Hartman, but you’ve been saying we are getting decent steady job growth now. Can’t that pick up the slack?
HARTMAN: The short answer is no. Let me run the numbers for you: economists say we need a little more than 100,000 new jobs a month. And that’s just to keep up with new entrants to the workforce, and that’s about where we are right now. Well that’s not absorbing the millions of Americans who lost their jobs in the recession — those people are still unemployed. Economists think it could take a decade to get back down to what’s considered normal unemployment — about 5 percent. And that’s even if the economy starts growing faster again. And I should say, some economists don’t even think we can back to such a low unemployment rate. That’s because of structural changes in the economy: you know, higher productivity, employers hire temps and contractors — all of that could leave more people chronically unemployed than before the recession.
CHIOTAKIS: Marketplace’s Mitchell Hartman joining us this morning. Mitchell, thank you.
HARTMAN: You’re welcome.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.