More on the Nov. Unemployment Report

Because of traveling, I did not have a chance to write much about the Nov. jobs report other than to state that it was disappointing.

As is usually the case, Alan Abelson of Barron's has an interesting perspective on the issue:

Abelson, Alan, 2010. Volker versus the shills. Barron's, Dec. 4.

From the article, this is an important observation:

"The increase in the unemployment rate came via job losses, rather than from a larger labor pool; Philippa and Doug point out that new entrants and re-entrants were down. The household survey, moreover, was noticeably weaker than the payroll report, tallying 173,000 lost slots last month."

Further, U-6 continues at about 17%. This is the broadest measure of unemployment and includes those working part-time who would like a full time job.

Abelson notes that firms are increasingly using part-time employment as a substitute for full-time positions.

Unfortunately, the high unemployment rates are expected to continue for some time. This will place downward pressure on US economic growth.

In conclusion, Mr. Abelson provides some quotes from Paul Volker,

"... Paul Volcker warned that this fair land is caught up 'in the most difficult economic circumstances of the post-World War II era and so is almost all the developed world.'"

I very much agree with this statement.

Another statement by Mr. Volker,

"The time is long gone, he said, when the 'U.S. could lay claim as the putative world superpower, with both unchallenged economic and military might…Instead, we are faced with broken financial markets, underperformance of our economy and a fractious political climate.' And, he points out, 'The growing question as to whether the exceptional role of the dollar can be maintained is one symptom of the problem.'"

I am not in complete agreement with this statement because the world still looks to the US for leadership in many different areas. However, a prolonged financial crisis could change America's role in the world.

It is important to manage the current lingering economic weakness so that it does not become a structural economic problem.