RightChange: What Does 325K Jobs Added in December Foreshadow?

Most of the major news outlets are hailing the latest job creation survey by as a sign of economic growth to come in 2012, but unemployment is historically high and people are wrapping up their holiday gift returns.  These are two of many reasons why we may be experiencing a stagnant economy in 2012.

ADP, one of the largest payroll system providers, reported 325,000 private sector jobs created in December 2011. They also reported government weekly jobless claims fell 15,000 to 372,000, but keep in mind that the private sector employs 90% of the workforce.  The manufacturing sector also saw a small improvement:

“Goods-producing businesses created 176,000 positions in the month, according to ADP's payrolls count, while the goods-producing sector rose 52,000 and manufacturing increased 22,000.”

The “jobs added” numbers are of course inflated because of the strong seasonal hiring and the tax incentives employers have for keeping people on the payroll through the year.  Paul Ashworth, chief US economist at Capital Economics in London, said:

“Some employers have an incentive to keep everybody on the payroll list for tax purposes through the year, even if they are no longer being paid. Firms then purge their payrolls at the end of the year, which creates a very strong seasonal effect."

Jobless claims are down and jobs added may be up, but that is because so many people have dropped out of the labor force altogether which means they are not included in these numbers.  In November 2011, 315,000 Americans dropped out of the labor force and stopped looking for work all together – in one month alone!

Take this tidbit from the report as well.  In 2011 there were 402,638 new jobs announced while 606,028 layoffs occurred.  That means we were negative 17,110 jobs.  This phrase is overplayed but it is the reality of the situation we’re in: the economy is not adding enough jobs to grow the economy.

These numbers are fudged and benefit nobody but Obama and the Democrats.  They use these figures to say that the job situation is improving so that they can demand more time for people to be on unemployment.  If jobs were slowly being added, we wouldn’t need to extend unemployment benefits.  Our economy is shrinking as a result of Obama and the Democrats’ deficit spending.   We’re borrowing 42 cents of every dollar we spend for a stagnant economy – and that is simply irresponsible.

Back To Blog