The jobs report issued by the Labor Department today showed the unemployment rate at 6.7 percent and job gains of 74,000. Despite the decline in the unemployment rate, the report does not bode well for the economy. It is a signal that Congress and President Obama need to change course and focus on economic growth and jobs.
If December’s 6.7 percent unemployment rate were not due to Americans dropping out of the labor force, it would be good news. But 347,000 people left the labor force in December. With natural population growth, that means another 525,000 more Americans are classified as out of the labor force.
The Department’s broadest measure of the unemployment rate, U-6, remained unchanged at 13.1 percent. The percent of the unemployed out of work for 27 weeks or longer, classified as long-term unemployed, rose to 37.7 percent from 37.4 percent.
The number of jobs created, 74,000, masked a shrinkage of hours worked by production workers. The aggregate index of weekly hours shrank by three tenths of a percent, and the index of aggregate weekly payrolls declined by one tenth of a percent.
Our government is doing all it can to prevent job growth in America. We have the highest corporate tax rate in the world. Our financial regulations are driving multinationals to locate overseas, in London and Tokyo. Our environmental regulations are slowing energy production. The Affordable Care Act penalizes firms who want to hire new full-time workers. It is time to take a serious look at what our economic policies are doing to job creation—and make changes.