There has been plenty of evidence in the past month that job creation is the U.S. has restarted for the first time since the 2007 to 2009 recession. Now, it looks as though the optimism over better unemployment numbers was premature. The improvement in joblessness is, at the very least, sputtering.
According to new data from Gallup:
Job market conditions in the United States were flat in November, as Gallup’s Job Creation Index remained at +14, similar to the range seen since May. This is another indication that Friday’s sharp drop to 8.6% in the government’s U.S. unemployment rate may be overstated.
ADP data that the private sector added 206,000 workers seems to support that the economy added jobs last month.
The ability of American businesses to add large numbers of workers as they did after the 2001 recession remains undermined by the habit of large companies to retain cash rather than use if for expansion. Smaller businesses, the largest engine of new employment, have little access to the capital necessary to add workers. Government incentives for the addition of new employees are stuck in Washington’s political web.
Other habits that companies have developed include getting more out of existing workers and only adding workers who are part time. This allows firms to pay less for people because outside contract employees usually do not get benefits. Existing workers are worried that if they are not more productive that they will lose their jobs.
The jobs recovery that happened in November is a blip on the radar.
Methodology: For Gallup Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. The Gallup Job Creation Index results are based on a random sample of approximately 500 current full- and part-time employees each day.
Douglas A. McIntyre
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