U.S. jobs report January 2013 unemployment 7.9% 157,000 jobs added:clear need for further fiscal stimulus

The U.S. Bureau of Labour Statistics has released the employment report for January . It shows that unemployment rose slightly to 7.9 %, 157,000 new jobs were added and there were significant upward revisions to employment numbers for last November and December. However, employment gains would have been 166,000 if the government level had not cut 9000 jobs during January. The broad definition of unemployment  U6 was a seasonally adjusted 14.4 %. So the picture is mixed. If one were to calculate the high employment surplus or deficit choosing 4 -5 %  unemployment as our target rate we would likely find that the current stance of the government level as a whole is not stimulative but possibly contractionary. In order to be stimulative as Robert Eisner has shown in his work How Real is the Federal Deficit   it is the high employment surplus or deficit that counts . There is a crucial need for Ben Bernanke’s accomodating monetary policy to be combined with a stimulative fiscal policy. Q.E. on its own cannot do the heavy lifting that is required.

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, business cycles, deficit hysteria, deficits and debt, Federal Reserve, fiscal policy, full employment, monetary policy, quantitative easing, U.S. and tagged , , . Bookmark the permalink.

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