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Atlanta, GA | Posted: February 11, 2011
Kari White
Summary Sentence:
Dr. Boston live on CNN with Suzanne Malveaux discusses January Jobs Report.
Full Summary:
"Disappointing." That's how economists describe the January jobs report out today. The economy added just 36,000 jobs, and that's a lot fewer than expected. But the unemployment rate fell to 9 percent. That's down from 9.4 percent the month before. Georgia Tech economics professor Thomas "Danny" Boston, he's here to help us break down these numbers. And I guess the big question is, you know, the unemployment rate, it went down by a lot, but the job numbers really -- very disappointing.
Dr. Thomas "Danny" Boston"Disappointing." That's how economists describe the January jobs report out today. The economy added just 36,000 jobs, and that's a lot fewer than expected. But the unemployment rate fell to 9 percent. That's down from 9.4 percent the month before.
Georgia Tech economics professor Thomas "Danny" Boston, he's here to help us break down these numbers.
And I guess the big question is, you know, the unemployment rate, it went down by a lot, but the job numbers really -- very disappointing.
PROF. THOMAS "DANNY" BOSTON, GEORGIA TECH: Right. They didn't go up as much as expected. But there is an explanation for this seeming paradox. All right?
Because on the question of the jobs number, we were expecting more. But if you really sort of peel beneath the numbers and look at where the jobs -- not increasing, where they were lost -- for example, transportation and warehousing, temporary help services and construction -- had we experienced the increase in jobs in January that we had in December, then we would have been up to 150,000 and perhaps even higher.
MALVEAUX: So when somebody takes a look at these numbers, should they be optimistic about the state of the economy?
BOSTON: I think should. Now, you have to be tempered.
MALVEAUX: You're cautious, I think. Cautiously optimistic.
BOSTON: Right, right. Because there are some things that are troubling about the number.
MALVEAUX: For instance?
BOSTON: For instance, the fact that the unemployment rate decreased from 9.4 percent to 9 percent, that occurred because a half million people dropped out of the labor market.
MALVEAUX: Oh, I see.
BOSTON: That's not a good sign. We would actually prefer to see the unemployment number increase and people coming into the labor market as a result.
MALVEAUX: Really?
BOSTON: Yes, because when you drop out of the labor market, the people who would have stayed in that dropped out are likely to be classified as unemployed. So that's why the number went down.
And when the economy is growing, at least for a temporary period, the unemployment rate actually increases because people are coming back in.
MALVEAUX: So if we take a look at this, and people are kind of frustrated, they're getting impatient right now. How long is it going to take us before we get to that point, I guess it's a healthy unemployment number around 5 percent?
BOSTON: Sure, sure. It's going to take a while. If we don't do anything better than we're doing -- and we are doing actually pretty good now by historic standards, we're up about 3.2 percent -- if we just maintain that rate, it's going to take us until 2016 to get that down to 5.5 percent.
So we have to do something different. We really have to talk about what kind of long-term economic and innovative growth policies we can put in place to change that.
MALVEAUX: All right, Professor, thank you so much for joining us.
BOSTON: Thank you. My pleasure.
