Unemployment is Down, and Attitudes Are Too

The Unemployment Report for November 2023

By Frank Stricker | December 2023 | Online-only

The Bureau of Labor Statistics’ (BLS) report for the month of November was generally positive, especially after previous months when official unemployment (UE) crept up to 3.9% and seemed poised to go over 4%. Official UE fell to 3.7%. A more comprehensive unemployment number calculated by the National Jobs for All Network includes more people who want to work and part-timers who want full-time work. That Full-Count number fell from 9.4% to 9%, so it too is moving in the right direction. But it remains extremely high.

Other notable numbers. The number of part-timers who want full-time work but cannot find it fell by 295,000. And total non-farm jobs were up by 199,000. That is not spectacular, but it is a good number under conventional assumptions and because it is not so high as to fire up fears of a new round of high inflation at the Federal Reserve.

The total unemployment rate of 9% will never come down to 4 or 5% without special government programs that create millions of good jobs and address the inequities built into our class, gender, and ethnic hierarchies. Success here requires, for example, affirmative action, counseling, and training to assist people who face persistent and documented racism not only in the job search area, but in structural impediments and deficits that build up due to lousy schools, dangerous neighborhoods, poverty, discrimination, and very high rates of incarceration.

As it is now, actual UE rates for many groups are not well-known but they must be much higher than official rates. The official counts were 7.3% for the disabled and 5.8% for blacks. But there are hundreds of thousands, perhaps millions, in each group who are among the uncounted —for example, young black men who are in prison or with prison records or no prison contact but are just hopeless about finding half-way decent jobs and don’t bother trying.

Inflation and Our Terrible Economy

Job totals are growing, official UE is low, and inflation rates have come way down, from 9% in 2022 to 3% today. Real, after-inflation wages for average workers have finally begun to climb. Not by much—1.4% since November of 2022—but it is happening. Yet in many public opinion surveys, a majority of respondents say that the state of the economy is bad to very bad. And some of these respondents include people who are doing pretty well, believe that inflation rates will continue to fall, and are acting as though the economy is good. They are buying a lot of stuff, investing, starting new businesses, changing jobs, and going on strike without much fear that higher unemployment is just around the corner. What gives?

I am no Pollyanna—I belong to a group that tells you every month that unemployment is worse than government agencies say it is. But I wonder why there is so much negativity as the economy improves. I am no expert in this area. But with help from experts and talented journalists, I can offer possible explanations for pessimistic survey responses.

The inflation rate is way down, but many prices have not fallen back to where they were in January of 2020. And many won’t. I still get sticker-shock in the grocery store. Butter and bacon are still very high, and $7 seems like a lot for a jar of mayonnaise. Mortgage rates may be turning down, finally, but they are still almost prohibitive for many buyers. And on and on. So, yes, if you expected to see prices go back to pre-pandemic levels, you must be disappointed. And if your negativity is a precautionary measure—that is, you don’t want to get your hopes up—Ok.

But right now things could be much worse than they are. Inflation rates could be jumping up and economists would be pondering dangerous solutions. One way to bring prices down would be for our leaders to cause a big recession, or even a depression. (I believe in earlier times the term “deflation” was sometimes a synonym for “depression.”) Do people want that? Many of us—and Federal Reserve officials too—think we are fortunate that the Fed’s high-interest response to inflation did not cause a recession.

By the way, government officials should do more to take action against monopolistic pricing by large corporations. That’s a good idea all the time, but especially when prices seem extra high. It could actually help people and it would be popular with many voters.

So one reason for pessimistic opinions about the economy on the surveys is that while inflation rates are way down, many prices have not fallen very much. Another reason for pessimism is that the pre-pandemic flaws and injustices baked into our economy have not gone away. Some things have even gotten worse again after the ending of the mini-New Deal of the Biden administration’s response to the pandemic. Programs included relief on student loans and a big increase in subsidies for poor people with children. Much of this assistance is gone. And then there are those deep economic and social inequalities. So much income accrues to the rich, as one young respondent pointed out. True, totally true. Let’s tax the rich much, much more. We could have said the same thing in 2020 and 2005 and so on. These aren’t new concerns, but they are profoundly important. Yet such concerns are not the main thing driving negative opinions about the economy.

It turns out that a key motive behind negative opinions is partisanship. Members of the party that does not hold the presidency tend to be negative about the state of the economy, and this effect may be stronger for Republicans than Democrats. Today, in some opinion surveys, around 40% of Democrats are worried to some degree about the economy, but 80% of Republicans are. I am not sure if there is a good way to turn the latter number around.

Frank Stricker is a board member of the National Jobs for All Network, and the author of American Unemployment, Past, Present, and Future.

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