Unemployment Raises to 9.8%

December 4, 2010

On Friday, the Bureau of Labor Statistics reported a jump in the unemployment rate to 9.8% signaling a continuation of a weak economy.  Economists were predicting much stronger job growth in November and for the unemployment rate to remain unchanged at 9.6%.

The November unemployment rate of 9.8% represents a seven month high as non-farm payrolls increased a dismal 39,000 while economists were expecting a 140k increase in employment.

As the economy improves, the unemployment rate could be expected to raise as discouraged workers or those who have given up looking for jobs return to the workforce are counted again.  However, the numbers reflect a rise in the unemployment rate due to job losses rather than a return of people who have given up hope for finding employment.

Austan Goolsbee, chairman of the White House Council of Economic Advisers indicated that these numbers indicate just how fragile the recovery is and advocated the immediate extension of tax cuts for the middle class and an extension of unemployment benefits.

Mr. Goolsbee’s comments underscore the lack of understanding that by rasing taxes on “the wealthy”, the government will crush many small businesses that can create jobs and lower the unemployment rate.

The simple fact is that the government does not create jobs.  The sooner that the Administration and Congress understand this, the sooner we can expect the economy to improve.

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