Economic Outlook Remains Depressing

Every month at this time when the jobs report comes out, we get reminders not to put too much stock in any one month's numbers. This is wise counsel, first because there's some inherent volatility in month-to-month movements—for instance, December numbers may have been affected by bad weather—and second because these figures often get revised later as more data come in. So the pretty bleak numbers from December don't, in and of themselves, tell us much about how the recovery is going.

But those numbers are indeed pretty bleak. Only 74,000 new jobs were created in December, compared to a monthly average of 182,000 for the year. The unemployment rate fell to 6.7 percent, but that's because so many people dropped out of the labor force. The labor force participation rate is now 62.8 percent, its lowest rate since 1978. Some of that is a long-term decline due to an aging population, but most of it comes from people deciding there's no point in looking for work.

So let's look at the big picture. Heidi Shierholz of the Economic Policy Institute has a comprehensive roundup of the trends, and each graph is more depressing than the last. I'll just give you one:

As Shierholz explains, we're still short 1.3 million jobs from where we were at the recession's trough, but because of the population's steady growth, we would need another 6.6 million jobs to keep up with the growth in the potential labor force.

But maybe most depressing of all is that there's so little prospect for things getting much better any time soon. On one side you have Republicans offering the same trickle-down solutions that they've advocated for decades, which we know wouldn't do any good and would probably just increase income inequality. Their fantasy scenario seems to look something like Texas, where you have healthy job growth, but many of the jobs are at low wages with no benefits and no legal protections, so a thoroughly exploited workforce can feed the wealth of a small class of plutocrats.

On the other side, Democrats know that the things that might make a difference, like a large infusion of infrastructure spending, are never going to get through a Congress in which Republicans control one house. So they offer a combination of proposals to mitigate the misery like extending unemployment insurance and raising the minimum wage; small-bore initiatives like "promise zones" which, even if they work better than anyone expects, will have little meaningful impact on the national picture; and vague ideas (worker retraining!) that get repeated year after year but never amount to much of anything.

Sorry if I sound cynical, but is there any proposal out there about which you might say, "If we just did X, then this economy would get moving," such that X is something that might happen? I can't see it.

You may also like