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Job growth in January weak for second month in a row

Jobless hit by end to Extended Unemployment Compensation (EUC)
By Masao Suzuki |
February 10, 2014
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San José, CA - For the second month in a row, the Department of Labor employment report was weak, with only 113,000 new jobs created in January. Combined with the revised 75,000 jobs created in December, the two month average was only 94,000 new jobs each month, less than half the average increase in 2013 of more than 190,000. While the recession officially ended in the summer of 2009, there are still 850,000 fewer jobs than when the recession began in December of 2007.

Despite the weak jobs numbers, the official unemployment rate continued to fall to 6.6% in January as compared to 6.7% in December. The largest fall in the numbers of unemployed came among the long-term unemployed, those out of work for six months or more. In January, there were 230,000 fewer long-term unemployed, more than the total drop in the unemployed of 125,000. Much of this drop was probably due to the end of the federal extended unemployment insurance benefits at the end of December. As many of the long-term unemployed gave up their job search, they are no longer counted as officially unemployed, bringing down the official unemployment rate.

However there are still more than 3.5 million long-term unemployed, who make up more than 35% of the total officially unemployed. In addition there are more than an million people who are out of work and have been looking for work, but didn’t look in January either because they were discouraged or other personal reasons and another 2 million who said that they wanted to work but were not looking.

Although millions of people are struggling to survive without a job, the federal government has eliminated Federal Extended Unemployment Compensation (EUC) and Extended Benefits (EB), two programs that used to help out the long-term unemployed. Supplemental Nutrition Assistance Program (SNAP, or food stamps) benefits were cut last year when the 2009 boost which was part of the government stimulus (ARRA or American Recovery and Reinvestment Act) expired. On top of that, President Obama just signed into law a new farm bill that cuts food stamps by almost a billion dollars a year for the next ten years.

While the overall official unemployment rate fell slightly, the unemployment rates for African Americans, Latinos, and Asian Americans all rose in January, making the unemployment gap between oppressed nationalities and whites even larger. The official unemployment rate was 12.1% for African Americans, more than twice as high as for whites, who had an official unemployment rate of 5.7% in January.