Curb Your Economic Enthusiasm

The November unemployment numbers released this morning showed 146,000 new non-farm payroll jobs being added and the unemployment rate dropping to 7.7 percent. It’s a sign of the times — and how anesthetized we are to our current economic torpor — that this number feels good despite the fact that it’s still objectively miserable (if you want to see this trend on steroids, look no further than here in California, where champagne glasses have been clinking over the fact that unemployment went down to 10.1 percent in October).

But there’s a hitch. There’s always a hitch. Per Keith Hall, Senior Research Fellow at the Mercatus Center at George Mason University:

Disengagement from the labor force does continue to be a problem as participation dropped from 63.8% to 63.6%. Participation remains at a very low level and has dropped by 0.4 percentage point so far this year. Labor force dropouts were entirely responsible for the November decline in the unemployment rate to 7.7%. This widespread disengagement plus the fact that 40% of unemployed have been job hunting for over six months will make for a very, very long road to full labor market recovery.

I guess when you consider that we have an administration whose foreign policy is defined by “leading from behind,” it makes it slightly less surreal that their economic policy is defined by growth through contraction.