The news we all have been waiting for...a decline in the jobless rate...surely that's good reason for a celebration. Whoa cowboy, maybe you should slow that horse down a minute. Why? Well the classic adage comes to mind, "...there are lies, lies and then there are statistics..." So lets take a look at the statistics that are fueling the embellished headlines cheering for this mysterious job growth.
Fundamentally speaking real job growth is directly related to hiring not the reduction of firing or job losses. Perhaps, that is why you hear so much focus on the jobless rate versus hiring, since the jobless rate figures can be altered to suit ones cause. For example, what you aren't hearing or which is otherwise buried deep in an article somewhere is that the primary factors that have lead to the so called decrease in the jobless rate are the following.
1.) A whooping increase of 266,000 job seekers who have given up on their job search
2.) The November upward revision to 64,000 jobs was largely due to seasonal/temporary/part-time hiring
3.) The national foreclosure rate is raging higher thus still out of control
What should really be jumping off the page right now is that more and more job seekers simply aren't being counted in the unemployment rate figures as unemployment benefits are exhausted and job seekers give up. With the way things are going, don't expect the Feds to extend unemployment benefits again. Why? Why should they, it only adds to their black eye about the struggling economy. In essence, if they extend unemployment benefits again that would acknowledge that the economy is still struggling which in turn would increase scrutiny of the current state of the economy. As for the home foreclosure rate, this is absolutely ridiculous. People don't get their homes foreclosed on because they have good paying jobs and CAN pay their mortgage. Quite the opposite is true. In fact, the only state East of the Mississippi to have higher foreclosure fillings than Georgia in December 2009 is Illinois. That isn't saying much about Georgia since Illinois has a population that is nearly three times that of Georgia but only 5,000 more foreclosure filings.
Sure everyone is more than anxious to hear the economy is showing real signs of improvement but the data as presented is just misleading at best. I'm from the school of thought that if you want to see real tried and true economic growth than two things will help -- government purchase orders and government regulations. Let's face it, history shows us that some of the most notable periods of economic growth were fueled by government purchasing (versus stimulus spending) and long overdue government regulations like say on the Big Banks that used credit default swaps to create the current Great Recession. So while the statistical decline in the jobless rate is good to hear, until you can show the hiring it hardly calls for celebration. 