Welcome news came on the unemployment front this morning. The Department of Labor reported that the unemployment rate in the U.S. fell to the lowest level in four years, dropping to 7.7 percent. With job creation at 236,000 jobs last month, America is approaching employment growth levels that could make a real dent in unemployment. Several more months at close to 250,000 and the economy may well be on it’s way.
But don’t break out the fireworks yet. Disturbingly, black and Latino unemployment remains frighteningly high. This fact pushes me to point out two giant yellow caution signs flashing before the February jobs report.
The first is that we’ve been at “good news” points before. Remember “green shoots” and “recovery summer” and the other economic cheerleading platitudes which never materialized? The bottom line is that one month’s bump doesn’t equal a trend.
Just last year, the economy seemed poised to take off. In the 3rd quarter of last year economic growth for example shot up to 3.1 percent into clear recovery territory. But the next quarter it fell back to earth, barely eking out any growth at all. Why’s that? The answer lays in Washington.
Political gridlock in Washington prevents the economy from getting any traction. The House GOP’s commitment to preserve a special place for the wealthy through tax cuts financed by budget cuts is creating enormous uncertainty. The schizophrenia in Washington is showing up in herky-jerky economic data.
Moreover the policies that DC ends up agreeing to also halts any forward momentum we might have.
As part of the fiscal cliff deal last month, the White House and Congress agreed to allow payroll taxes—which hit middle and low wage earners the most—to rise by $125 billion. This increase is forecast to shave growth in 2013.
And the downdraft of uncertainty and off-beat policies doesn’t end there.
With almost a million job cuts looming as a result of sequestration—alongside impending budget battles on keeping the government running for the rest of the year and raising the nation’s debt ceiling—who know’s what the true employment outlook for the rest of the year might be?
The other cautionary sign flashing is that black and Latino unemployment remain at economic-depression levels. One of out of seven blacks and one of out 10 Latinos is out of work. If this trend holds, it’s a worrying sign.
Blacks and Latinos falling behind as the rest of the economy falls forward is not where we need to be. With black and Latino wealth in the tank, the lack of jobs is a double blow. It could mean that the divide between black and brown communities and the rest of America becomes that much greater.
As I have long advocated, that’s why we need race-specific policies. Why? Because black and brown unemployment has race-specific dimensions that need targeted remedies.
Until Washington gets its act together and gets back on the side of average Americans, our jobless numbers—like all other economic indicators—are likely to be up and down.