Friday’s jobs report was great . . . or the headline was great, that unemployment dropped from 9.5% to 9.4%. Also, over 700 thousand workers were losing their jobs in January, compared to “only” 244 thousand last month. Still, how can the rate of unemployment decrease when 244 thousand workers lost their jobs?? Simply, hundreds of thousands of people have quit looking for work. They have gone to part-time work, gone back to school, gone home to live with Mom & Dad, given up, or whatever. If all those people are added in, the total “under-employment rate” is a staggering 16.3%.
Certainly, the financial markets are suggesting the recession is over, but whatever happened to the “toxic assets” . . . remember those? We may have “ring-fenced” them, but they are still a problem. Also, have we made the derivatives market transparent yet, which was the other primary cause of this collapse? There is still work to do, much work!