Last Friday provided good news for the US labor market. Unemployment edged down to 8.6% in November, the first time for three years that the rate fell below 9%.
Not everything is rosy, though. Half of the fall in the unemployment rate is due to discouraged jobseekers leaving the labour force. This people typically face higher hurdles for re-entry should the economic situation improve.
Looking forward, more difficult times can be expected. The help-wanted index online, provided by the Conference Board, indicate a further drop in job openings in November:
Also, long-term unemployment remains elevated, with people out of employment for more than 6 months finding it increasingly difficult to find alternative employment opportunities.
In this environment, further stimulus is the only thing that helps. Cutting down on government programs now is not helping a quick turnaround in job creation. That doesn't mean the current programs should not be carefully examined and spending re-oriented towards activation measures (rather than having unemployment idly sitting around at home). But an austerity-led job recovery simply does not exist.