Question #5 for 2012: EmploymentOne of the tragedies of the "too small to succeed" stimulus of 2009 was that it didn't include enough money covering a long enough period to prevent the massive firing of state and local public workers including teachers, police, firement, etc. The Republicans have been intransigent on stimulating the economy because for them "job #1" was hurting the economy to prevent Obama being re-elected. They weren't interested in helping the 99% who are suffering from the greatest unemployment since the Great Depression or the ten million homes that were repossessed by the banks throwing people out onto the street. Their only concern is to make sure that the top 0.01% continue to make the multi-million incomes and hold on to the hundreds of millions and billions in wealth.
Earlier I posted some questions for next year: Ten Economic Questions for 2012. I'm trying to add some thoughts, and a few predictions for each question.
5) Employment: The U.S. economy added 1.64 million total non-farm jobs or just 137 thousand per month in 2011. There were 1.92 million private sector jobs added in 2011, or about 160 thousand per month. Although this was an improvement from 2010, this was still weak payroll growth for a recovery. How many payroll jobs will be added in 2012?
First a little "good" news. It appears that most of the state and local government job cuts will be over by mid year 2012. Just eliminating the employment drag from these job cuts will help.
from: Calculated Risk
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Here is a graph of the annual change in government payrolls since 1970. Over the last 3 year government employment has decreased significantly (this is a combination of Federal, State and local government). It appears job cuts will slow in the first half of 2012, and government employment might be neutral in the 2nd half of this year.
For 2011, the BLS reported 280 thousand government jobs lost, and my guess is this will slow to around 100 thousand in 2012 and most of the jobs lost will be in the first half of the year.
As predicted a year ago, construction employment increased in 2011. Although the increase was small - just 46 thousand jobs - this was the first increase for construction employment since 2006, and the first increase for residential construction employment since 2005.
I expect construction employment to increase at a faster rate in 2012 - not a boom - but better than in 2011. Unfortunately employment growth will probably slow in some other sectors. As an example, although auto sales will probably continue to increase in 2012, the rate of increase will slow since most of the recovery in auto sales has already happened. This suggests that private job creation will probably be about the same in 2012 as in 2011, even with some pickup in construction.
Private Payroll JobsHere is a graph of the annual change in private payrolls since 1970.
From: Calculated Risk
Click to Enlarge
Last year was disappointing given the high level of unemployment, but it was still the 2nd best year for private job creation since the 1990s.
My guess is private employment will increase around 150 to 200 thousand per month on average in 2012; about the same rate as in 2011.
With over 13 million unemployed workers - and 5.6 million unemployed for more than 26 weeks - adding 2 million private sector jobs will not seem like much of job recovery for many Americans. Hopefully I'm too pessimistic.
The only economic stimulus the Republicans believe in is the trickle down effect of activites such as the new boom in super-sized yachts. The only "jobs" that the ultra-rich want to hand on to are those personal service jobs where people "service" the rich for meagre wages while all the good wages, the middle class wages, disappear in the "new economy" that trickle down Reaganism has delivered over the last 30 years.