Unhappy new year

Last Updated: Mon, Dec 10, 2012 03:51 hrs

pEnjoy the rosier US jobs figures while they last The 146000 new positions added in November were more than expected while the 77 per cent unemployment rate is the lowest level since December 2008 But the labour force participation rate also sank to a 30-year low and fiscal austerity cliff-driven or otherwise looms That portends a workforce reversal of fortuneppThe latest report defied forecasts mainly because Hurricane Sandy turned out to have been less of a factor on employment than economists feared And while job creation for September and October was revised downward by a total of 49000 the decline was entirely accounted for by an unexpected drop in October government employment Private-sector job creation remained encouragingly healthierppBeyond the headlines though are bleaker signs The proportion of Americans working fell by 02 percentage point to 636 per cent The rate which has been sliding since the onset of the financial crisis is also the lowest since the end of 1981 If labour participation had remained at its 1990-2007 average of 665 per cent the current unemployment rate would be closer to 12 per cent Moreover the fall is greatest among the young Among 20 to 24-year-olds for example employment is 29 per cent lower over five years compared with an 186 per cent rise for those older than 55 This demographic shift doesn&rsquot augur well for US joblessnessppThere will also be significant fiscal matters with which to cope According to the Congressional Budget Office projections going over the so-called &ldquofiscal cliff&rdquo would cost 34 million jobs by the fourth quarter of 2013 thus pushing the unemployment rate over 9 per cent That estimate also overlooks the capital markets effects on jobs from slashing 500 billion from the budget And even if President Barack Obama and congressional leaders can achieve some sort of compromise eliminating the 2001-2003 tax cuts for incomes above 250000 alone would dent employment to the estimated tune of 11 million jobsppIt&rsquos nice to have a modicum of Christmas cheer when it comes to US employment Just be ready for the New Year&rsquos hangoverp

More from Sify: