The Bureau of Labor Statistics report on U.S. employment in November 2009 was much worse than expected: the unemployment rate went up from 9.6 percent to 9.8 percent as total nonfarm payroll employment increased by only 39,000. The Calculated Risk blog posted ugly graphs here and here. The U.S. economy needs to add about 140,000 jobs per month just to keep up with population growth. The unemployment rate won’t start dropping until the economy is adding close to 200,000 jobs per month, and it’s hard to see how that will happen.

Interest rates are already extremely low, and “quantitative easing” by the Federal Reserve probably won’t stimulate huge new demand.

Spending from the 2009 American Recovery and Reinvestment Act is winding down, and Congress won’t approve any significant new money for infrastructure. Members of Congress can call employer tax breaks “stimulus,” but businesses won’t start hiring until they expect or experience more demands for the goods or services they sell.

The number of long-term unemployed remains at the highest level in decades. Republicans are holding an extension of unemployment benefits hostage to continuing all the Bush tax cuts, which won’t create jobs. Even if benefits are extended for some of the long-term unemployed, it won’t help the “99ers,” who have received the maximum 99 weeks of unemployment benefits.

A payroll tax holiday could permanently weaken the Social Security system.

It all adds up to high unemployment for the forseeable future.  

Share any relevant thoughts in this thread.

P.S.- Some people are way too confident that Barack Obama will be re-elected. Ronald Reagan presided over a higher spike in unemployment in 1982, but by 1984 the economy was booming. That is unlikely to be the case by 2012. A 10 percent unemployment rate nationally means even higher jobless rates in many states Obama would need to win (Nevada, Ohio, Michigan, Pennsylvania, or Florida). Even if Republicans nominate a bad candidate, like Newt Gingrich or Sarah Palin, Obama would not coast.