Brad deLong’s blog entry yesterday is getting good coverage – with good reason. He writes that the economic news sounds good, if you listen to reporters. But reporters frequently don’t have a clue as to how to interpret news; they tend to simply regurgitate the spin. The news actually isn’t all that good.
That the labor market is finally improving–that it is no longer becoming harder and harder month by month to find jobs–does not mean that the labor market is good. A few months of employment gains are good news: they mean that it is a little less bad out there in the labor market than it used to be. But don’t confuse rates of change with levels: there are still perhaps 4 million people either unemployed or out of the labor force who would have jobs if we had a labor market in equilibrium. (And there are 6 million who would have jobs if we were in a boom like the late 1990s.) It’s still unusually hard for Americans to find work–just not as unusually hard as it was six months ago.
The best little chart in the one of how more of our national income is going to profits than to labor compensation than it has in 40 years.
