The headlines will all scream about the drop in the unemployment rate to 9.4 percent. But job growth was a middling 103,000, powered by private sector hiring of 113,000. Those numbers are not enough to pull the unemployment rate lower, and certainly not to the extent that it dropped. So if hiring isn't bringing the unemployment rate down, what is?
There are 2.6 million people that are out of work, but not counted as such, including half of them that are too discouraged to even look for work. The number of discouraged workers increased by 42 percent in the past year! While we're headed in the right direction with job losses diminishing and hiring beginning to pick up, the job growth needs to kick into a higher gear before that is what actually brings the unemployment rate down.
There are still 6.4 million long-term unemployed -- those out of work more than six months -- and that number is not coming down. Any wonder the number of discouraged workers is increasing?!
Both November and October job growth were revised higher, with October having registered at 210,000, the type of number that if consistently delivered, will make a dent in the unemployment rate.
Finally, Federal Reserve Chairman Ben Bernanke speaks before the Senate Budget Committee this morning. It will be interesting to see how much bluster is devoted to the drop in the unemployment rate as opposed to discussing the need for more significant job growth.